Economics and the Indeterminacy of Freedom (3) - Joan Robinson on Keynes and the Problem of Political Choice

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Following up on Economics and the Indeterminacy of Freedom (2) - The Invisible Hands of Smith and Keynes

Of late, I have been looking - more carefully than I used to - into Keynes, Post-Keynesianism, and the MMT school. So, I was particularly intrigued by the chapter on The Keynesian Revolution in Joan Robinson's 1962 booklet Economic Philosophy, a free copy of which I happened to chance upon yesterday in the internet.

Robinson offers this funny reminiscence of Keynes, who, she claims,

was interested only in very short-period questions. (He used to say: 'The long period is a subject for undergraduates.') ...

p. 72

Nudged by wisdom, the mature scholar may be more reluctant to take a view on the future than the gung-ho youth. And when Keynes did ventured into prognostications he promptly got them wrong, at least regarding

... the falsity of his optimistic view that, when the theory was understood, reason would prevail.

Robinson adds at once, on pages 92 and 93:

He was himself partly to blame for the perversion of his ideas, for he failed to see that, once the principle has been established that maintaining employment is a public concern, the question of what employment shall be for becomes a political issue.

This is exactly what I am driving at in Economics and the Indeterminacy of Freedom (1), and (2).

In the last chapter of the General Theory ... he falls into the fallacy of supposing that there is some kind of neutral policy that the Government can pursue, to maintain effective demand in general, without having any influence upon any particular  demand for anything.

The government has to undertake ' the task of adjusting to one another the propensity to consume and the inducement to invest' but everything else is best left to 'the free play of economic forces'. [in a footnote she refers us to pp. 379 and 380 in the General Theory]

 Robinson continues with unrelenting austerity:

This is a metaphysical conception as unseizable as abstract labour or total utility. What is a policy that merely adjusts the demand for investable resources to the supply?

[...]

What is a neutral policy? What mixture of these means is it that leaves private enterprise unaffected in content and acts only on the quantity?

[...]

[T]here is no such thing as a purely quantitative, overall financial policy.

[...]

There is no simple right policy; it is all a matter of judgement.

The Keynesian revolution has destroyed the old soporific doctrines, and its own metaphysics is thin and easy to see through. We are left in the uncomfortable situation of having to think for ourselves.

Consider the Energiewende.- the German attempt to give prominence to so called renewable energy sources, making up for their economic non-viability by massive state subsidies. Some would argue, state resources are being used to destroy the German energy industry with disastrous consequences for the economy at large. Be this as it may, it surely is quite possible for the state to invest its substantial means in the downfall on the nation, the Third Reich being a case par excellence.