Keynes’ 1929 pamphlet “Can Lloyd George Do It?” ends with a clear statement:
Negation, restriction, inactivity — these are the government’s watchwords. Under their leadership we have been forced to button up our waistcoats and compress our lungs…[but] the future holds in store for us far more wealth and economic freedom and possibilities of personal life than the past has ever offered. There is no reason why we should not feel ourselves free to be bold, to be open, to experiment, to take action, to try the possibilities of things. And over against us, standing in the path, there is nothing but a few old gentlemen tightly buttoned-up in their frock coats, who only need to be treated with a little friendly disrespect and bowled over like ninepins.1
To point out the hypocrisy in Keynes’ attitude here is, more or less, beside the point (though he did famously say in the class war he would be found on the side of the “educated bourgeoisie”. Nevertheless, Keynes, as Skidelsky points out at length, styled himself the people’s economist, so to speak, making a point of writing for popular publications (like Redbook) and overall dispensing with the mystical aura of the economist in general: “[i]f economists could manage to get themselves thought of as humble, competent people, on a level with dentists, that would be splendid!”2 This, undoubtedly, stemmed from the fact that Keynes himself was barely an economist. He had no degree, only took a ‘few’ courses in the subject, and most of his experience was practically gained from civil service postings. Keynes primarily seeks to separate himself from the over-learned peculiarities of other economists who have “been biased by the traditions of the subject…assuming a state of affairs where the ideal distribution of productive resources can be brought about through individuals acting independently”. While this attacks the principle of self-interest inherent to neo-classical/marginalist moral theory, it also slips in a more pointed dig at Ricardo, who along with the marginalists concerned themselves with distribution over the Malthusian ‘velocity’ of money, or what for Keynes was an antecedent of the “quantity theory of money” which he held throughout his life, albeit modified heavily from its banal origin.
In this light, 1930’s “Economic Possibilities for Our Grandchildren” essay’s treatment of the economic ‘moral science’ comes into view. In the space of a few hundred words, Keynes reduces “the economic problem” (non-specific, possibly ‘technological unemployment’) to “the struggle for subsistence…the primary, most pressing problem of the human race — not only of the human race, but of the whole of the biological kingdom from the beginnings of life in its most primitive forms”, 3 thereby making of contemporary economic issues a hilariously transcendental ‘evolutionary’ issue. But then Keynes tells us how someday the economic problem will be superseded by “his real, his permanent problem”: how to live once free of “pressing economic cares”, in a world of leisure won by “science and compound interest”. Elsewhere, Keynes attacks not unemployment but the “love of money” (formulated after a trip to the USSR) as crass, inequitable, and openly longs for a world like the past in which usury was a high crime, its desiring a “disgusting morbidity” and money, if it existed at all, a mere expedient for exchange. He is arguing from a psychological and moral standpoint against economics as he understands it, lacking a tether to the real world. However! And very carefully! He cautions the reader that this time of freedom is to be found at an undisclosed point in the future — guided by Burke, one must be sure not to have a Revolution for revolution’s sake, and be sure that the cost of transition is more dear than the benefits of the change.
He outright admits his project is to carry the full employment of “war socialism” into peacetime; his issue and major finding is “under-employment”, or the identification of a possibility of the status quo coming to an unfavorable rest at a position of neither crisis or optimum functioning; his fear is volatility and a lack of trust in the future; his obsession is stability in the relation between debtors and creditors; his method is to monitor interest rates so in order to throttle liquidity and smooth prices to the expense of the rate of exchange. Simply put, Keynes is for involution, for the intensive build-up of the country, of “national self-sufficiency”. He blasts those who find this frivolous (humorously enough, given his agreement with Burke above): “We have to remain poor because it does not ‘pay’ to be rich. We have to live in hovels, not because we cannot build palaces, but because we cannot ‘afford’ them… We are capable of shutting off the sun and the stars because they do not pay a dividend”4. Sneeringly, he later characterizes his critics as saying “Abra would rise, cadabra would fall… The more work we do now the less there will be left to do hereafter.” He claims, again, that these objections are not those of “experience or of practical men” (such as himself) but “highly abstract theories…half misunderstood by those who are applying them today, and based on assumptions which are contrary to the facts”.5
Keynes does in “The End of Laissez-Faire” (1926) further elaborate his own view of economic policy, free of the dreamy moral philosophy of the above, but nevertheless so optimistic as to be naive. Here, the economy is an economic organism produced by the aforementioned love of money, just as the human species in toto is produced for Darwin by sexual love as an “adjutant to natural selection”.6 Laissez-faire is a bastard offshoot of Hume and Bentham, with no place in the economic sphere, as it assumes a perfect market born of individualism and idealism in the Benthamesque mode (that is, viewing any government as a brake on freedom). However, here we see most acutely Keynes’ limitation; his “ideal size for the unit of control and organization lies somewhere between the individual and the modern State”. He proposes a “return…towards medieval conceptions of separate autonomies” which may be universities, the Bank of England, and even “joint stock institutions” of “certain age and size” which somehow, miraculously, begin to consider public interest instead of private property. While, again, a sort of nice wistful fantasy (the ethical capitalist or “master-individual”!) it hilariously assumes the presence of a moral impulse which may override that of profit. Keynes shares much with ‘Marxist’ reformers, in ways both would probably be loathe to admit — however Keynes, unwilling to even commit to such a milquetoast position as reformism, maintains capitalism will eventually mutate into its total opposite. Not dialectically either!
In one of the last essays here Keynes offers a hagiographic look at economist Thomas Robert Malthus, from whom he formulated his own theory of “effective demand”, yet another name for his overall obsession with stability to promise adequate returns on investment outcomes (due to multiplication effects). But this section, and his lionization of Malthus, is far more instructive. In contrasting Malthus with Ricardo, Keynes vastly prefers the former and laments Ricardo’s influence which has constrained economic science “for a full hundred years in an economic groove”.7 But even moreso, Malthus’ obsession with population oversight so as to enable the predictable functioning of the capitalist system and stave off crisis perfectly corresponds to Keynes’ own vision in which free trade of capital is limited and an industrial localism is promoted. Keynes quotes at length Malthus’ Investigation, in which he provides a lengthy allegory for how admitting a penniless alms-seeker to a dining table for free would ultimately corrupt and collapse a feast among guests. It is this which Keynes has taken from Malthus; on a deeper level, the rejection of both of a labor theory of value in favor of a model in which labor can, and more importantly, must remain constant to ensure the proper functioning of capitalism, is fundamentally an attempt, as Henryk Grossman would doubtlessly characterize it, to assume a permanent legibility and “hydraulic” stability to a system which always tends towards unknowability and crisis.
Basically — Keynes offers the dream that Keynesian technocracy recognized as an impossibility, and spent the next several decades modifying and rationalizing itself as a way of dealing with this inferiority.
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