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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.
Chapter 3 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 money and finance, 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 money and finance 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
Introduction 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 money and finance 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 money and finance 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
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 money and finance 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 money and finance. 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
reorienting process 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 money and finance’ 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
governments 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 money and finance issue-area, for example, for governments to have both monetary
differences between core and peripheral states, effectively creating a two-tier Europe with Germany at the core. This argument has been well articulated by Costas Lapavitsas and his collaborators in the Research on Money and Finance group: Financialisation in the periphery has proceeded within the framework of the monetary union and under the dominant shadow of Germany. Peripheral economies have acquired entrenched current account deficits. Growth has come from expansion of consumption financed by expanding household debt, or from investment bubbles characterised by real