Keynes was making hay out of a disaster. The banks enabled a speculative boom, resulting in a massive mis-allocation of capital for many years. Then when the

Keynes was making hay out of a disaster. The banks enabled a speculative boom, resulting in a massive mis-allocation of capital for many years. Then when the boom ended, they had mass unemployment. No surprise there. Keynes was wrong to think that (3) is better than (1). All that does it take capital forcibly out of one individual's hands and put it into the pocket of someone doing something useless. You might as well save him the trouble of digging the ditch.