These heroes of mine are so unlike the the DSA dreck in New York City today. We also find in Keynes’s argument faint echoes of an element of Karl Marx’s falling-rate-of-profit hypothesis. He rightly notes, however, that profit-seeking is not the sole motive of human action, and that many of the dysfunctions of the modern age are the results of a policy framework that not only presumes it to be so, but presumes also that profit-seeking behavior can reliably produce socially beneficial outcomes. Crotty reports, and appears to embrace, Keynes’s case for economic self-sufficiency, a strategy that would entail a serious curtailment of international trade. I know that it is historically important and I know that many people, not all of whom are idiots, find it a sort of Rock of Ages and containing inspiration. By resurrecting that vision, James Crotty has performed a valuable service. Sorry, your blog cannot share posts by email. Like the rest of the Fabians, he saw socialism as a project to be carried out by a modern version of Plato’s philosopher-kings who would administer a mixed-economy state. Crotty devotes a good deal of attention to the idea that fundamental uncertainty about the future weakens the motive of private-sector managers to incur the risks associated with expanding their enterprises and with venturing into new spheres of activity. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life.” — John Maynard Keynes2, An engraving of St George slaying a dragon graces the cover of James Crotty’s monumental new book Keynes Against Capitalism.3 The dragon is meant to symbolize capitalism, and the dragon slayer represents the great twentieth-century economist John Maynard Keynes. I am prepared to entertain an affirmative answer to the question “Was Keynes a socialist?” But the significance of Crotty’s book lies not so much in his affirmative conclusion as in the arguments that he marshals in support of it. If the State is able to determine the aggregate amount of resources devoted to augmenting the instruments and the basic reward of those who own them, it will have accomplished all that is necessary.23, But a program that proposes to regulate the level of investment on a large scale cannot help but also influence the direction of investment. At the risk of sounding like an anarchist, isn’t it time to stop dwelling on how the state can be expanded into a beneficent agent of economic and ecological change? The state is more entwined with capital than ever before, with its agencies and even its parliaments and congresses filled with rich people. President Bush's deficit spending in 2006 and 2007 increased the debt. It powerfully captures two basic truths, which are at the core of his plan: (1) the United States urgently needs to embrace greater ambition on an epic scale to meet the scope of this challenge, and (2) our environment and our economy are completely and totally connected. Keynes desired a return to the “good old days”, in which the capitalist class were “responsible” industrialists who invested for the good of their communities and society as a whole. ), and had his salary frozen for years. He saw also that the pursuit of economic gain could fuel financial speculation that has no beneficial effect on employment, socially useful innovation, or real economic growth. Socialism comprises those tendencies, forces, and institutions that blunt, mitigate or adapt market relations to social goals. By implicitly endorsing Keynes’s doctrines that Mongiovi describes in the subheading of his article as “indeed more radical than commonly thought” and of “considerable relevance for the Left today”, they are repositioning themselves as Brooklyn hipster versions of Dissent magazine. Keynes had no great affection for the working class either. The decision of OPEC (the Organization of the Petroleum Exporting Countries) to raise oil prices triggered both a deep recession and an inflationary spiral; the extended episode of stagflation put mainstream Keynesianism on the defensive. An old URPEer, he was in grad school with a very good friend of mine, with whom I taught for a long time. Based on a very close reading of Keynes’ work, Crotty argues that core Keynesian economic ideas should … Its dreary, out-of-date, academic controversialising seems so extraordinarily unsuitable as material for the purpose.”. In a 1939 interview in the New Statesman and Nation, Keynes described the economic order he envisioned as “liberal socialism, by which [he meant] a system where we can act as an organised community for common purposes and to promote social and economic justice, whilst respecting and protecting the individual — his freedom of choice, his faith, his mind and its expression, his enterprise and his property.”5 What Keynes had in mind, Crotty contends, was a gradual transition, through a process of trial and error, to a planned economy. Britain’s nineteenth-century economy drew its vigor from new inventions and their adaptation to profitable purposes, from population growth, and from the opening of global markets. Crotty might have subjected Keynes’s arguments to some critical scrutiny. That being said, Keynes never believed in the power of ordinary working people to control their own fate. It was reprinted in Keynes's 1931 Essays in Persuasion (Ch. All this salivating over government boards has little to do with the socialism I’ve defended since 1967. From 1996 to 2013, he coedited the Review of Political Economy. But investment spending depends on business expectations of future consumption demand; if the share of consumption spending in aggregate income is shrinking, private-sector enterprises are unlikely to anticipate levels of future demand adequate to stimulate a sufficiently high level of investment. with Steven Pressman. Crotty marshals all of the available evidence and sets it out in an exceedingly clear way. Keynes is kind of a perfect example of this. This inte… This is evident in his first important book, The Economic Consequences of the Peace (1919); there Keynes draws a striking contrast between British nineteenth-century capitalism, which witnessed astonishing improvements in living standards, largely through the adoption of transformative technologies such as steam power and rail transport, and the dispiriting mix of industrial distress and financial turbulence that marked the British economy in the aftermath of the Great War. Slumps that inflict severe distress on the working-class population are normal occurrences. It is not the ownership of the instruments of means of production which it is important for the State to assume. As aggregate income increases, society tends to save a larger proportion of its income. According to the prevailing interpretation, Keynes, an enlightened but loyal member of the British establishment, foresaw that capitalism and the bourgeois values and institutions it underpinned would not be able to withstand another episode of economic turbulence on the scale of the Great Depression. David Houston was treated like a pariah at the University of Pittsburgh, was spat upon for his opposition to the War in Vietnam (unlike any returning veterans! Keynes was highly antipathetic toward Marx. His purpose in writing his 1936 masterwork The General Theory of Employment, Interest and Money was to understand why slumps occur, and to identify remedies to contain their destructive force. This, of course, will sound familiar to anyone paying attention to political and economic affairs in the Western Hemisphere in 2020. Keynes, the conventional story goes, sought not to dismantle capitalism but to reform it; he recognized that, contrary to the precepts of orthodox neoclassical economics, market forces are not reliable guarantors of full employment and robust growth. According to Keynes’ biographer, Robert Skidelsky, it would be “an interconnected elite of business managers, bankers, civil servants, economists and scientists, all trained at Oxford and Cambridge and imbued with a public service ethic, would come to run these organs of state, whether private or public, and make them hum to the same tune.”. This definitely was not a short-term government stimulus program designed to ‘kick-start’ a temporarily sluggish economy and then let free enterprise take over.”22 One significant achievement of Crotty’s book is its demonstration beyond a doubt that Keynes’s overarching objective was to make a case for a program of national economic planning. In his special introduction to the German edition, Keynes recognized how “thirsty” the Germans must be for his “general theory,” which would also apply to “national socialism.”, (From “Bastard Keynesianism: The Evolution of Economic Thinking and Policymaking Since WWII”). Yes, Keynes did not favor socialism, but was worried that an extreme case of capitalism could actually lead to a socialist takeover. He understood, sensibly, that muddling through is an unavoidable aspect of all human activity. Change ), You are commenting using your Facebook account. Like many of us, he sometimes told people things that were closer to what he thought they wanted to hear than to what he really believed; and what he did believe could change from one day to the next according to the particular light in which he happened to be viewing a problem. Instead, Keynes “Keynes was building a case to replace it [capitalism] with a form of democratic socialism in which most large-scale capital investment spending would be undertaken by the state or by quasi-public entities.” All this would unfold in a “gradual transition, through a process of trial and error, to a planned economy.” This sounds pretty much like how Jacobin described a Sanders presidency, doesn’t it? Its dreary, out-of-date, academic controversialising seems so extraordinarily unsuitable as material for the purpose.”20 In a 1933 draft of The General Theory, he acknowledged that Marx usefully called attention to the fact that if firms are unable to realize their profits by selling what they have produced, the circuit of production will be interrupted. Keynes advocated deficit spending during the contractionary phase of the business cycle. It is true that Keynesian economics is a theory of state capitalism. We shall discover it as we move along and we shall have to mould our material in accordance with our experience.” Openness to criticism is indispensable, he continues: “for this process bold, free and remorseless criticism is a sine qua non of ultimate success. was first given as an address given by J.M. For in developing his case, Crotty shows us how a penetrating, vigorous, and humane intellect tackled questions that have a crucial bearing on debates we are still having about what our socioeconomic institutions ought to do for us and what they ought to look like. He wrote, “ and her economic problems are serious throughout the,! Made exchange-rate uncertainty and balance-of-payments crises once again potent sources of economic instability blog and notifications... To expand public control over investment from itself ’ but to replace it with ‘ socialism. Rope around their necks this trap through the 1990s, wages stagnated, but he was,! 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