Keynes — A Start (1)

Image credit

This is my note to Nick in which I thank him for offering on his blog the below video introducing Keynes.

Thank you, Nick, for this nice introduction. It is always a good idea to sketch the virgin basics before burdening them with our prejudices. I may well be wrong, as I have hardly read Keynes in the original, except the Consequences of the Peace, and his essays and a few impenetrable chapters of the General Theory, relying instead mainly on secondary sources like Minsky, Davidson and Mitchell, but I seem to remember, especially from the essays, that Keynes was exceedingly critical of politics and in that sense not exactly naively optimistic of its benign potential (as the clip appears to be insinuating). But this did not leave him with cynicism alone, of which he was quite capable, and disdain and apathy. He saw chances of the promising kind as well, and he went after them. And it could be quite possible that my living in a prosperous and peaceful era was in no small measure thanks to him. But, of course, random factors that may happily conspire to shape a livable epoch are always at work as well. In Germany, for instance, we were lucky to attenuate Marxism and radical socialism on the one hand and naive liberalism and stubborn conservatism on the other to end up with the type of social democracy that understands that capital and labour have different interests and that these can only be reconciled if a balance of power is established between the two parties. My reading of Keynes and his attitude, again it may be wrong, is that in the face of possible failure he realised that if we try (Keynesian policies) we may still succeed for a while, and if we do not, another effort may yield the desired success a little later; while “in the long run we are all dead”, in the short run we may lead better or worse lives and be able to achieve the former if only we make a constructive effort. This is what I like about “my” Keynes: he recognises what economics does not recognise that capitalism is a mixed economy, not an ideal type, it is necessarily political in nature and judicious political intervention may ensure outcomes far superior to ideologically blinded approaches such as envisioned by Marxism or neoliberalism. As I argue with adepts of MMT: I am prepared to accept that their economic policies are the ones we must pursue to achieve the best results, but there is also the possibility that we apply them and still fail, even miserably, as Keynesian demand management can equally be the instrument of the most desirable and the most despicable ends, as Keynes himself reminds us in his preface to, I believe, the Japanese translation of his General Theory.

Continued at Keynes — A Start (2).