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.
Some other interpretations
In the last chapter, I suggested that the roots of the world’s economic disorder are monetary and financial; that the disorder has not come about
by accident, but has in fact been nurtured and encouraged by a series
of government decisions. This view is shared by a few, but not by all,
whether they write for the press, the academic journals or in books. If we
look beyond the literature that deals specifically with moneyandfinance,
we find a much wider range of interpretations of the causes of our
present troubles. To
the 1987 election with the tacit support
of Fine Gael fell on its own sword in April 1989. On losing a vote in the Dáil
on the issue of providing additional funding to haemophiliacs suffering from
the Aids virus, Haughey, recently returned from Japan, decided that his government could not be held to ransom on issues of moneyandfinance and so
requested a dissolution of the Dáil from the President a month later on 25
May. Although the government had lost six other Dáil votes during its two
years in office and the opposition was of the view that a defeat on this
In a similar vein to the previous chapter on unemployment, this chapter and the next argue that there are problems and lacunae in Marx’s understanding of moneyandfinance which a critical engagement with Keynes can help to address.
This chapter again begins with Marx and assumes a degree of familiarity and sympathy with Marxist political economy in general and Marx’s views on money in particular. Marx said profound things about money, some of which anticipate Keynes. But as de Brunhoff’s ( 1976 ) sympathetic and honest account acknowledges
dimensions of moneyandfinance underline the social and conditional construction of nation-states and national boundaries and the inadequacies of nation-centric epistemologies.
States, money and the changing dynamics of capitalism
Some important historical examples illustrate how states and other institutions matter, in terms of monetary arrangements but also in terms of how these monetary arrangements influence the overall trajectory of capitalism. As above, Capital substantially abstracts from the state and Marx never wrote the promised further volumes. This
Karl Polanyi (1886–1964) returned to public discourse in the 1990s, when the Soviet Union imploded and globalization erupted. Best known for The Great Transformation, Polanyi’s wide-ranging thought anticipated twenty-first-century civilizational challenges of ecological collapse, social disintegration and international conflict, and warned that the unbridled domination of market capitalism would engender nationalist protective counter-movements. In Karl Polanyi and Twenty-First-Century Capitalism, Radhika Desai and Kari Polanyi Levitt bring together prominent and new thinkers in the field to extend the boundaries of our understanding of Polanyi's life and work. Kari Polanyi Levitt's opening essay situates Polanyi in the past century shaped by Keynes and Hayek, and explores how and why his ideas may shape the twenty-first century. Her analysis of his Bennington Lectures, which pre-dated and anticipated The Great Transformation, demonstrates how Central European his thought and chief concerns were. The next several contributions clarify, for the first time in Polanyi scholarship, the meaning of money as a fictitious commodity. Other contributions resolve difficulties in understanding the building blocks of Polanyi's thought: fictitious commodities, the double movement, the United States' exceptional development, the reality of society and socialism as freedom in a complex society. The volume culminates in explorations of how Polanyi has influenced, and can be used to develop, ideas in a number of fields, whether income inequality, world-systems theory or comparative political economy. Contributors: Fred Block, Michael Brie, Radhika Desai, Michael Hudson, Hannes Lacher, Kari Polanyi Levitt, Chikako Nakayama, Jamie Peck, Abraham Rotstein, Margaret Somers, Claus Thomasberger, Oscar Ugarteche Galarza.
minority Fianna Fáil
government fell in April 1989 when it lost a vote in the Dáil (the lower house
of the Irish parliament) on the issue of providing additional funding to haemophiliacs suffering from the Aids virus. Although that government had lost
six other Dáil votes, the Taoiseach, Charles J. Haughey, decided that his
government could not be held to ransom on issues of moneyandfinance and
so requested from the President a dissolution of the Dáil, which was granted.
The election of June 1989 had far-reaching consequences for the Irish party
system and Irish
scheme 40 years ago.
In short, international organizations are not free agents. They are created by, and are forever dependent on national governments. And of all
the national governments the United States has the biggest veto in organizations dealing with moneyandfinance. Nor is the United States peculiar
in opposing any extension of the power of international bureaucracies.
The whole history of international relations tells us that governments
have always been extremely careful not to take even the smallest step
which would let an international organization usurp
began, at the Dublin European Council in 1996, with the (cosmetic) insertion of the word growth. Under the Jospin Government, the reorientations
would take on a much more concrete, politically and economically significant form. French macroeconomic policy thinking was always more
equivocal about the ‘sound moneyandfinance’ agenda which inspired the
Pact’s rules. Attempts to rebalance the relative importance of acceptance
of the German model in the pursuit of ‘sound money’ with more familiar,
French dirigiste elements have been most consistently and
equitably to provide welfare and public goods in general
becomes less geographically controllable.
At another level, whereas at the beginning of the 1960s
private international capital markets were highly restricted
and the great majority of international capital flows were
public flows, by the mid-1970s, following the breakdown of
Bretton Woods, such private capital markets mushroomed.
They overwhelmed both public reserves and publiclysanctioned international capital flows. In the moneyandfinance issue-area, for example, for governments to have