Saturday, 8 November 2008
Some years ago, I was present when Bill Clinton visited Warwick University, during the dying days of his presidency. The faculty were awkwardly lined up, each of them holding a book as a gift. I noticed that Big Bill wasn't excessively interested in geology, and he didn't do much better with Germaine Greer and her volume of women's poetry. Things were different when he encountered Robert Skidelsky, author of the definitive Maynard Keynes biography. "Keynes!" the President exclaimed, as if recalling a long-lost crony. He told us all how he had always loved the boldness of the man.
"Keynes had the idea of using government money to spend your way out of a depression," the President explained. "That was a major discovery." I realised that Clinton, like myself certainly, had come to comprehend capitalism through the work of Maynard Keynes. And Keynes, like FDR, whom he met and admired, had been right. There really was nothing to fear, least of all fear. Humans need not think of themselves as victims of impersonal economic laws, suffering stoically. With luck, and the due exercise of brilliance, we could learn to save ourselves. Who knows, we might even come to fathom the "dismal science" of economics.
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This article, or extract from an aricle, is from a piece in Saturday's "Independent" newspaper in the UK.
This article is, unfortunately, full of errors. I will make a list of the ones I've spotted at the end of this post. The article seems heavily reliant on Skidelsky's biography of Keynes (which is wrongly referred to as "the definitive Maynard Keynes biography" - it is no more "definitive" than, say, Moggridge's), but Skidelsky's very fine volumes are not to blame for all the mistakes in this article.
If you want to understand Keynes, you really should read either Skidelsky's biography, or Donald Moggridge's, or maybe even those by Charles Hessions or Roy Harrods, or an analytical work like Donald Markwell's "John Maynard Keynes and International Relations", or one of several other works on Keynes.
Some of the mistakes I spotted were:
- "The Economic Consequences of the Peace" (1919) was not Keynes' first book; "Indian Currency and Finance" (1913) was
- Keynes did not read (or study) philosophy at Cambridge; he read/studied mathematics
- Keynes did not say "in the long run we are all dead" in the 1930s; he wrote this in "A Tract on Monetary Reform" in 1923
- Although he may have used the phrase, he did not generally refer to "bandit states" in Europe in the 1930s, but to "brigand powers"
- It is not true that "no one agreed with" his argument that some of the British debt to the US should have been forgiven at the end of WW2 (see, for starters, Markwell, 2006, pp 230-3
- it is not true that "many" institutions were created at Bretton Woods in 1944 - the IMF and World Bank were
- Keynes's "Economic Possibilities for our Grandchildren" was not published in 1927; it was published in 1930
There are also several judgements that are open to serious debate.
On some points this article is right. It's good to point out that Keynes rejected Marxism - he did so very strong (see Skidelsky and Markwell on this). This is important today when some misguided people seem to be turning again to Marx.
It is also the case that Keynes' approach is really important for the world today - above all, international cooperation on economic issues to get us out of this mess and to keep us out.
But what a travesty that "The Independent" should publish an article full of so many mistakes! This does no good for encouraging sensible discussion of how to apply Keynes's insights today, when we so desperately need them, and when we must encourage the new US administration - as Keynes worked to encourage FDR - to provide the economic leadership the world needs.
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