Back to what worked
By Justin Fox |
November 1, 2009, Sunday
|
Print Edition
Print Edition
WE have just lived through an age in which economists were our most influential moral philosophers. The results aren't great. "The main moral compass we now have is a thin and degraded notion of economic welfare, measured in terms of quantity of goods," Robert Skidelsky writes.
Lately we've been failing even by that impoverished measure. The time certainly seems ripe for an overthrow of the economists. Or perhaps it's simply time for a return to an approach to economics that had largely faded from sight in the past quarter-century, that of John Maynard Keynes.
Bringing about such a comeback is Skidelsky's stated intent in "Keynes: The Return of the Master." And while Peter Clarke is less explicit in "Keynes: The Rise, Fall, and Return of the 20th Century's Most Influential Economist," the basic message is the same: Keynes is back, and deservedly so.
Deficit spending
This Keynes revival has already been widely discussed, of course. It is usually linked to arguments that the economy can be stimulated through government deficit spending. In reality, such arguments had never disappeared from practical economic discourse -- they had just been banished from some academic quarters. And if that were all the return of Keynes was about, it wouldn't be very interesting.
Neither should the Keynes comeback be seen as an attempt to establish his "General Theory of Employment, Interest and Money," first published in 1936, as an economic bible to be consulted at every turn by students and policy makers. Keynes would have found such an effort silly.
He was dismissive of those who leaned too heavily on rules derived from a sacred text, be it the Koran or "Das Kapital." Clarke quotes his saying in 1944, after a meeting with several of his American disciples, "I was the only non-Keynesian there."
What's vital about Keynes today is not so much a well-defined economic doctrine as the attitude and the tools with which he attacked economic problems. This is where the historians Clarke and Skidelsky come in. Clarke has written two volumes on the "Keynesian revolution;" Skidelsky is the author of the definitive biography of Keynes, a three-volume epic. Their new books are useful and important introductions to what a modern Keynesianism might look like.
Too interesting
Clarke's book is an attempt to give readers the full Keynes, in brief. In its early chapters it founders on the reality that Keynes' life was just too interesting, and too closely intertwined with that of other major figures of his age, to submit to a mere sketch. Unless you already know a good deal about Keynes and early-20th-century Britain, it's just plain hard to get through. Skidelsky's new book doesn't attempt much in the way of biography, but it struggles for several chapters through a clunky, sloppy account of the current financial crisis and of the development of economics since Keynes.
It is only when they get to Keynes' ideas that the books take off. Clarke lays out the development of Keynes' economics from the mid-1920s to his "General Theory," and it's a gripping journey.
Skidelsky takes a more systematic approach, dividing Keynes' thinking into its political, economic and moral elements. In this telling, Keynes' political views were dominated by a pragmatism similar to what Clarke describes, where the best is the enemy of the good. Keynes was no socialist, but also no free-market ideologue. He was interested in what worked.
Lately we've been failing even by that impoverished measure. The time certainly seems ripe for an overthrow of the economists. Or perhaps it's simply time for a return to an approach to economics that had largely faded from sight in the past quarter-century, that of John Maynard Keynes.
Bringing about such a comeback is Skidelsky's stated intent in "Keynes: The Return of the Master." And while Peter Clarke is less explicit in "Keynes: The Rise, Fall, and Return of the 20th Century's Most Influential Economist," the basic message is the same: Keynes is back, and deservedly so.
Deficit spending
This Keynes revival has already been widely discussed, of course. It is usually linked to arguments that the economy can be stimulated through government deficit spending. In reality, such arguments had never disappeared from practical economic discourse -- they had just been banished from some academic quarters. And if that were all the return of Keynes was about, it wouldn't be very interesting.
Neither should the Keynes comeback be seen as an attempt to establish his "General Theory of Employment, Interest and Money," first published in 1936, as an economic bible to be consulted at every turn by students and policy makers. Keynes would have found such an effort silly.
He was dismissive of those who leaned too heavily on rules derived from a sacred text, be it the Koran or "Das Kapital." Clarke quotes his saying in 1944, after a meeting with several of his American disciples, "I was the only non-Keynesian there."
What's vital about Keynes today is not so much a well-defined economic doctrine as the attitude and the tools with which he attacked economic problems. This is where the historians Clarke and Skidelsky come in. Clarke has written two volumes on the "Keynesian revolution;" Skidelsky is the author of the definitive biography of Keynes, a three-volume epic. Their new books are useful and important introductions to what a modern Keynesianism might look like.
Too interesting
Clarke's book is an attempt to give readers the full Keynes, in brief. In its early chapters it founders on the reality that Keynes' life was just too interesting, and too closely intertwined with that of other major figures of his age, to submit to a mere sketch. Unless you already know a good deal about Keynes and early-20th-century Britain, it's just plain hard to get through. Skidelsky's new book doesn't attempt much in the way of biography, but it struggles for several chapters through a clunky, sloppy account of the current financial crisis and of the development of economics since Keynes.
It is only when they get to Keynes' ideas that the books take off. Clarke lays out the development of Keynes' economics from the mid-1920s to his "General Theory," and it's a gripping journey.
Skidelsky takes a more systematic approach, dividing Keynes' thinking into its political, economic and moral elements. In this telling, Keynes' political views were dominated by a pragmatism similar to what Clarke describes, where the best is the enemy of the good. Keynes was no socialist, but also no free-market ideologue. He was interested in what worked.
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