But the hour cometh and now is
A review of Peter Clarke's, Keynes: The Twentieth Century's Most Influential Economist (Bloomsbury, London, 2009).
Erik EmpsonIt is no surprise that in an era of cuts to public spending on services, calls for deregulation and an increasing acceptance of the importance of reducing government debt there should be a resurgence of interest in John Maynard Keynes, a man whom one might describe as the last great political economist. But maybe it isn't Keynes' ideas as much as his intellectual attitude that we might embrace.
This is a competent and erudite, fair if a little fawning, biography that can be read in one or two sittings. It begins by explaining Keynes' family background and social milleu. Clarke shows Keynes' deep connections to a privileged Cambridge elite and the literary Bloomsbury group, he was son to a Cambridge professor of economics and logic, and a politically active mother who was at some point mayor of Cambridge. Access to the best schooling was never an issue for Keynes and this extended into his adult life with the famous economist Alfred Marshall as his mentor.
Clarke doesn't use the term precocious but seemingly it wouldn't be inappropriate to describe the young Eton man's skills in mathematics and logic which he was later to apply to economics. Keynes' intellectual abilities are played up heavily in this book, but it is obvious that Keynes had an exceptional aptitude for mathematics and a hungry intellect. He goes from working in his twenties in the India Office of the British Government to a period teaching and researching at Cambridge where he continues to work as a conscientious cashier for Imperial Britain its coffers of sacked gold needing a good pedigree of management.
In his early years Keynes was living the Edwardian life of the privileged fin de siècle bourgeois yet in a form that no longer really exists today. We see in this young gilded man, there, as well as in his contemporaneous intellectual pursuits, the formation of his character as a willing, obedient but independently minded servant of the nation. Here we have someone who enters the civil service at the cusp of Empire, the age of great statesmen, financiers and institutions but equally an increasingly rapidly changing world that was seeing the waning of the power of the aristocracy and modern movements for political rights and social freedoms. It is when the First World War breaks out that Keynes enters the Treasury and begins his enduring influence in matters of crisis management.
Oddly if this period was a time of acute national austerity, where rather than trim the fat of the British Empire, its international rivals cut up its muscles, Keynes, though clearly not unaffected by the desolation of the war, ramped up his socialising. Quite bloody right. When not perfecting his early works on probability or pursuing passionate liaisons with other young gentlemen (or stable hands and lift boys it seems), he was cavorting with the Woolfs and the Bells. There seems to be something to Keynes' character that informs his economics: he abjures passivity, meets crisis with risk, and to some extent embraces systemic change, a point not mentioned by Clarke is that Keynes met news of the February revolution in Russia with optimism and cheer.
As any fool knows, Keynes first stood out as an intellectual figure in his own right with his publication of The Economic Consequences of the Peace in 1919, a castigation of the unworkable Treaty of Versailles. Met with criticism and celebration alike, Keynes's notoriety began to soar. What is distinctive about this however, is his ability to go against the grain of established opinion, whilst giving voice to strong undercurrents of common sense. And this theme is to reoccur time and time again as Keynes battles with orthodoxy in respect to classical economic theory, in the 1930s with Robinson, Meade and Piero Sraffa, and fallen financial giants in the aftermath of the 1929 crash.
The readiness of Keynes to meet crisis with action, reflects the extent to which he bring the political back into the world of economics. At the most fundamental level this entails the incorporation of what would otherwise be Marxist considerations into capitalist economics. If a nation is serious about balancing the books, it must treat the working class as an active, relatively autonomous subject. Much of this legacy we still see today in the commonplaces about how public confidence is a contributing or determining factor of economic stability. What Keynes was to do was show say to capitalists that they could no longer treat labourers as a commodity like any other. Business needed a form of political management of the system to prevent it from cannibalism. A mixed economy was exactly this, a middle ground between an exhaustive centralised political distribution of resources and an annihilatory mantra of thrift. The politics of the twentieth century would be defined by the lion of labour led by the lumbering donkeys of the new political classes. Amongst them, Keynes stood out like a thoroughbred.
Keynes of course championed entrepreneurship, spending and investment and railed against the passivity of saving, of seizing the tail but not the dog. But he did so in the context of a world that was looking for answers to questions that were open for debate. Men of his era argued the issues out and formed intellectual allegiances on the basis of that. Our climate is different, we lack intellectual leadership, publically minded individuals and maybe we lack the skills. But our problems are not going to be solved by any one genius, welcome as they are, but by people taking the plunge and making a political stand for measures that will address our economic problems at their cause. Keynes' stopped half way, but why would he go any further? In the West we've lived off the fat of the artificially engineered Keynesian bubble but now we no longer have the luxury of remedies that fail to address the fundamental inequalities at the heart of capitalist societies.
The transition to a modern democratic state (if we ignore the continued embarrassing presence of the monarchy in Britain) did not happen by default, but by an upset of the Victorian patriarchal relationship between land and labour, the latter forcing a change in the composition of the political establishment. Our current crisis is equally artificial but so far we have met it with fear and cowardice rather than risk and adventure.