Friday, May 7, 2010

Interesting Keynes Quotes

I had a few interesting Keynes thoughts that I figured I'd just post all together. First, I came across this Ayn Rand quote from Atlas Shrugged:

"Until and unless you discover that money is the root of all good, you ask for your own destruction. When money ceases to be the tool by which men deal with one another, then men become the tools of men. Blood, whips and guns--or dollars. Take your choice--there is no other--and your time is running out."

I'm not a huge fan of Ayn Rand. I usually take the Christopher Hitchens critique, that Ayn Rand isn't entirely off-base but that she puts way more emphasis than necessary on the points where she's correct, and neglects a lot of other important points (she's also a hyper-rationalist with a lot of faith in human reason, which as readers know is always suspicious to me). Anyway, what struck me was how reminiscent this line was of a line from Keynes (a line he published 21 years earlier, I might add). In the conclusion of the General Theory he wrote:

"For my own part, I believe that there is social and psychological justification for significant inequalities of incomes and wealth, but not for such large disparities as exist today. There are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition. Moreover, dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandisement. It is better that a man should tyrannise over his bank balance than over his fellow-citizens; and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative."

Before moving off of Ayn Rand, I just want to say that if they ever make a movie about her life, she should be played by Helena Bonham Carter.

The second Keynes statement is one shared by Andrew Sullivan. Keynes is speaking to the Liberal Party in Britain in the 1920s, which is a very interesting read right now, given the hung parliament that Britain is dealing with. The Liberal Party has been marginalized for a while now in Britain, but in the early part of the century it was in a very strategic position vis-a-vis the Conservatives and Labour, just as it is today. Keynes says:

"In the realm of practical politics, two things must happen - both of which are likely. There must be one more General Election to disillusion Labour optimists as to the measure of their political strength, standing by themselves. But equally on our side there must be a certain change.

The Liberal Party is divided between those who, if the choice be forced upon them, would vote Conservative, and those who, in the same circumstances, would vote Labour. Historically, and on grounds of past service, each section has an equal claim to call itself Liberal. Nevertheless, I think that it would be for the health of the party if all those who believe, with Mr. Winston Churchill and Sir Alfred Mond, that the coming political struggle is best described as Capitalism versus Socialism, and, thinking in these terms, mean to die in the last ditch for Capitalism, were to leave us.

The brains and character of the Conservative Party have always been recruited from the Liberals, and we must not grudge them the excellent material with which, in accordance with our historic mission, we are now preserving them from intellectual starvation. It is much better that the Conservative Party should be run by honest and intelligent ex-Liberals, who have grown too old and tough for us, than by Die-Hards. Possibly the Liberal Party cannot serve the State in any better way than by supplying Conservative Governments with Cabinets, and Labour Governments with ideas

I'm still trying to parse exactly what he means in the second paragraph, with respect to capitalism and socialism. Keynes had very harsh words for both capitalism and socialism at different points in his life, so I think it's important to be careful about what we read into any given statement. Often, what seems like support for one is motivated more by a frustration with the other than by genuine sympathy. I think it's quite fair to say that Keynes wasn't especially sympathetic to either laissez-faire capitalism or socialism. Regardless, what really interests me is the third paragraph.

I want to be careful about cutting and pasting European political dynamics onto American political dynamics (particularly when I don't know much about European political dynamics), but I think there is something of an analogue to the Liberal Party in American politics - the only difference is that it is not organized into a party of its own. It is tempting to call this group "moderates" or "centrists", but I don't think that's exactly right. First, there are a lot of moderates who simply want to be all things to all people - it's calculated political opportunism (or, more charitably, good representation of an ideologically diverse district). Moreover, not all of this reasonable broker of good ideas and good leaders isn't always in the center of the ideological spectrum. I personally look to the very senior researchers and former public servants at my work as examples: the late Ned Gramlich was very liberal, Robert Reischauer is liberal, but probably more "left of center" than Gramlich was, Rudy Penner is conservative, and Eugene Steuerle I suppose you might call "right of center". They all have moderate and realistic dispositions, but not necessarily moderate politics or ideologies. We could add to this list Bruce Bartlett, and probably David Frum. In the political sphere I'd point to John Warner, Richard Lugar, Ron Wyden, and among new Congressmen perhaps Scott Brown and Mark Warner. At the state level we have Mike Bloomberg and Arnold Schwarzenegger. All these guys are pro-market without being squeemish about the reality of governance. And most importantly, they primarily act on the basis of ideas and not emotions or party platforms. President Obama is a mixed bag on this one. He is an ideas-man, but he plays an awful lot of politics too, and he panders to ideological causes - certainly more so than Bill Clinton I think. He's not the raving liberal that people make him out to be. I think he's best thought of as left-of-center with a few social-justice-y issues that are important to him, rather than a full-blown liberal.

Anyway, reading Keynes it makes me wonder how things would be different if a lot of these guys came together in their own party rather than scattering across the Democratic and Republican parties. I imagine, like the Liberal Party, it would still be a relatively fluid group, and that would probably be a good thing.


  1. Keynes on Money,

    "When the accumulation of wealth is no longer of high social importance, there will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession — as distinguished from the love of money as a means to the enjoyments and realities of life — will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialists in mental disease ... But beware! The time for all this is not yet. For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still. For only they can lead us out of the tunnel of economic necessity into daylight."

    Wow, psychobabble and everything; this the height of hackery.

  2. It's incredibly speculative to the point that one isn't quite sure what to say about it. Perhaps it's even "psychobabble". I'm not sure why it's hackery, though. These points aren't that crazy, are they? The impulse to acquire and hoard - to "have" simply for the sake of having - isn't exactly the most admirable of human proclivities.

  3. It is easy to say something about it; it is the sheerest form of utopian non-sense. What it reminds one of is the this the sort of moronic, wholly unrealistic "economy" found in the Star Trek universe (and as long as I am drawing this parallel, an economy and society - including its court - enforced and regulated by Star Fleet - a military organization - you know, a centralized military junta).

    Actually, I would say that any successful human society needs a certain number of such people to function properly. So even from a purely utilitarian perspective it is quite admirable.

    It is pure hackery. And his points are nuts. Let's just come out and say what anyone who reads this considers from the start - that Keynes was some sort of millenarian. Historically speaking millenarianism has been anti-thetical to classical liberalism.

  4. Anonymous you are very easy to scandalize, aren't you?

  5. I just call them as I see them. Keynes was clearly bitten by the utopian planning bug of the inter-war period; which is partly why he was so uncritical of the Soviet Union during the 1930s.

    Another gem from Keynes (the section in bold was done by myself):

    "I criticize doctrinaire State Socialism, not because it seeks to engage men's altruistic impulses in the service of society, or because it departs from laissez-faire, or because it takes away from man's natural liberty to make a million, or because it has courage for bold experiments. All these things I applaud."

    One take away from all of this could be, hey, if the Soviets didn't commit all these vile atrocities, it would be awesome. But consider that for a moment - could a "good society" ever exist where the sort of bold state experimentation that Keynes loved was commonplace? Where state sponsored (enforced?) "altruism" was the so-called "altruism" of the day? If we have learned anything in the past one hundred years is that some states are not worth living in, states where the bulk of one's day to day dealings depend on encounters with the state, etc., and the state that Keynes envisioned would fall into that category.

  6. That should read "sort of uncritical" not "so uncritical."


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