This book sees Keynes as neither villain nor hero and develops a sympathetic ‘left’ critique. Keynes was an avowedly elitist and pro-capitalist economist, whom the left should appropriate with caution. But his analysis provides insights at a level of concreteness which Marx’s analysis largely ignored and which were concerned with issues of the modern world which Marx could not have foreseen. A critical Marxist engagement can simultaneously increase the power of Keynes’s insight and enrich Marxism. To understand Keynes, whose work is liberally invoked but seldom read, the book first puts Keynes in context, explaining his biography and the extraordinary times in which he lived, his philosophy and his politics. The book describes Keynes’s developing critique of ‘the classics’, of mainstream economics as he found it, and summarises the General Theory. It shows how Keynes provides an enduringly valuable critique of orthodoxy but vital insights rather than a genuinely general theory. The book then develops a Marxist appropriation of Keynes’s insights. It argues that Marxist analysis of unemployment, of money and interest, and of the role of the state can be enriched through such a critical engagement. The book addresses Keynesianism after Keynes, critically reviewing the practices that came to be known as ‘Keynesianism’ and different theoretical traditions that have claimed his legacy. It considers the crisis of the 1970s, the subsequent anti-Keynesian turn, the economic and ecological crises of the twenty-first century, and the prospects of returning to Keynes and Keynesianism.
broadly a national rather than international or global, orientation also informs and limits Keynes’spolitical economy.
Burke and conservatism
This chapter begins with Burke, Keynes’s earliest obvious political influence, and it identifies the persistence of at least a ‘small c’ conservatism. As Fitzgibbons argues, ‘[a]lthough Keynes’s policies were liberal, his political theory was drawn from an outlook typically associated with traditional conservatism and the old Right’ ( 1991 : 131). Keynes read Burke while still at school, and bought the Complete Works with
Towards a critical but constructive appraisal of Keynes’s thought
attempt to save a theoretical system that for Marxists would be better broken up for scrap. Keynes’spolitics remained in many respects conservative. All sorts of methodological and political differences therefore caution against combination by the method of mixing-and-stirring. Similarly, there are reasons to be cautious of a congenial division of labour, which cedes production to Marx while taking from Keynes ‘a theory of money, the elements of a theory of employment, and an emphasis on practical economic policy’ (Hodgson 1982 : 233). Simply adding Marx and Keynes
to function primarily in the public interest’ ( 2018 : 88). This points to the fundamental problem with Keynesian assumptions of the need to work with private enterprise and of the perfectibility of governments which are built into much of the reform thinking, and which can misdirect and disarm the movement for change
Keynesianism’s return and Keynes’spolitical philosophy
This finally comes back to the impossible question of the prospects of a return to Keynes. It is impossible both because there are many versions of Keynes and because we live in a changed
Keynes’spolitics and his economics. As above, any idealism becomes qualified. Ideas, social structures, even structures as material as railways, are mutually constitutive. Conversely, this interactionist view means that economics could not be viewed ‘objectively’, like a natural science.
I also want to emphasise strongly the point about economics being a moral science. I mentioned before that it deals with introspection and with values. I might have added that it deals with motives, expectations, psychological uncertainties. One has to be constantly on guard
insensitive in the light of Hitler’s eugenic experiments’ (Skidelsky 2000 : 168)
Keynes’spolitics will be discussed in more detail in Chapter 3 . They are not entirely consistent but, as in most things, Keynes favoured a ‘middle way’. The point here is to emphasise where Keynes was coming from, whence his political philosophy and critical economics. The comfortable world described in the passage cited above, where an Englishman, very explicitly a man, could naturally travel and buy shares without let or hindrance, while equally naturally having a servant to do the
clear that it is unsafe to leave the state out of economic analysis. States act, and states’ actions make an economic difference. As discussed in Chapter 3 , interpretations of Keynes’spolitical philosophy vary and, without recapitulating the controversies, it seems clear that Keynes sought to establish that states both should and could make effective economic interventions, which simple truth challenged important strands of economic orthodoxy.
States have real power over money. In a post-gold-standard world they can, within limits, simply create money. As above
interest between them, they all had a long-term stake.
Yet Keynes’spolitical judgement about the consequences of capital
flows and exchange rates has proved considerably less robust than his
economic judgement. Whatever the trepidation of many in the 1970s,
west European and Japanese governments were able to adjust the expectations of their subjects to what Keynes had called the ‘economic juggernaut’ without damaging the more general presumption that the state
existed for its subjects’ well-being. They were able to justify various economic policies by stressing