Monday, August 22, 2011

The General Theory as an Anti-Marxist Treatise

LK has a good post clearing up Ralph Raico's perennial confusion (unless it's deliberate?) about Keynes. This is tough work - I can tell you from experience. Addressing insane arguments like Keynes was a Nazi sympathizer or Keynes was a Communist sympathizer is tiring because you're never quite sure if they're being genuine or malicious or if it's even worth your time. If the misinformation spreads, it probably is worth your time. If it stays in the guilty party's head you know it's rare that you're going to convince them so maybe it's not worth the effort.

Anyway, it's a good post if you're interested in the question of whether Keynes sympathized with Communists (spoiler: no, he didn't), but I was particularly intrigued by the extended quotation of Keynes's famous letter to George Bernard Shaw that LK provides. Most people know the one line where Keynes says in 1935 that he expects the General Theory to revolutionize economics. This is the whole passage:

"Thank you for your letter. I will try to take your words to heart. There must be something in what you say, because there generally is. But I’ve made another shot at old K.[arl] M.[arx] last week, reading the Marx-Engels correspondence just published, without making much progress. I prefer Engels of the two. I can see that they invented a certain method of carrying on and a vile manner of writing, both of which their successors have maintained with fidelity. But if you tell me that they discovered a clue to the economic riddle, still I am beaten – I can discover nothing but out-of-date controversialising.

To understand my state of mind, however, you have to know that I believe myself to be writing a book on economic theory which will largely revolutionalise – not, I suppose, at once but in the course of the next ten years – the way the world thinks about economic problems. When my new theory has been duly assimilated and mixed with politics and feelings and passions, I can’t predict what the final upshot will be in its effect on action and affairs. But there will be a great change, and, in particular, the Ricardian foundations of Marxism will be knocked away

There's lots of interesting stuff in here. It accomplishes LK's task of abolishing this idea that Keynes had any respect for Communists. It also has a revealing sentence towards the end that notes Keynes is well aware of potential public choice problems in public finance, but (rightly) recognizes that this is not a good reason to fail to produce good economic science. But the sentence that I've bolded is what really intrigues me. We all know Keynes was gunning for the Ricardians and the Classics. But here he says that "in particular" the Ricardian foundations of Marxism would be finally finished off by the General Theory - in particular. There's a lot wrong with Classical economics - or roughly the economics of the last three quarters of the 19th century and the first quarter of the 20th century, and Keynes criticizes much in this tradition. What seems to have bothered him in particular is the foundation it laid for the real plague of the 20th century: Communism.


  1. I am going to say something outrageous, though.

    What exactly is wrong with being a sympathiser of Nazis and Communists? That's not the same thing as being a Nazi or a Communist.

    If we were all good men, would we not be sympathisers of all of humanity? It doesn't take much effort to have a little sympathy for the Germans, who worked so hard to unite as a nation and rise up in economic power before losing so much after World War I. It doesn't take much effort to have a little sympathy for the Russian people, who faced enemies abroad and at home, from either cruel rulers or greedy foreign conquerors.

    That said, Keynes' quotes show he is not a sympathiser at all. He is, in no uncertain terms, repulsed by new ideological movements.

  2. I don't think you have to say Keynes was a Nazi or Communist sympathizer to be highly critical of his notions regarding human beings, or what the state could do to human beings. He definitely had a "create new men" streak in him, which was so commonplace across the ideological spectrum in the post-WWI era. Much of this is illustrated by his own way off predictions (that only a few old men would fight his nostrums, etc. and that they would eventually forget why they were doing that, that twenty years hence from our time the love of the acquisition of money would old-fashioned and banished apparently by social custom, etc.).

  3. Prateek - in the sense of sympathizing with all of humanity, I'd agree with you. I think the implication is sympathizing with the ideology and with its implementation - that's obviously what people have a problem with.

    Keynes actually offers a great example of someone who had a lot of sympathy for the humiliated German people after WWI without embracing Nazism.

  4. Speaking of Marxism:


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