Thursday, December 8, 2011

"Stuffed Crust Mercantilism"?

I was re-reading chapter 23 of the General Theory last night because I'm writing a final essay for my thought class on Malthus, Marx, and Keynes's refutation of Say's Law. Malthus and Marx are down and I'm just cleaning up the Keynes section today.

Keynes was pretty brave to embrace Malthus alone, but he mounted a solid defense in the General Theory and elsewhere. In chapter 23 he goes all-in and outlines what the mercantilists also had right, as well as what a whole gaggle of underconsumptionists had right. Marx never gets very high praise from Keynes anywhere, but it's noted that he was in that tradition as well.

So I was intrigued to read commenter teqzilla write: "Your attempt to dig Krugman out of his hole by depicting them as claiming elementary economic insights owe to Hayek isnt very fair, and even if it were there is a difference between originality and influence. No-one would deny Keynes' influence even though he himself dedicated a chapter in the general theory to pointing out that his ideas didn't represent much more than a kind of stuffed crust mercantilism."

For the record, I don't think I've adjusted or changed anything that Krugman said. If you think I did that, you're entitled to think that. But that means you have a different read of Krugman than me, which means I think you're doing the exact same thing.

That having been said, did Keynes really point out "that his ideas didn't represent much more than a kind of stuffed crust mercantilism"?? That's not my read of chapter 23 at all. In fact chapter 23 is great at laying out (1.) what they had right, (2.) what they had wrong, (3.) why Keynes is different. Moreover, Keynes repeatedly says things like they were "thinking along the right lines". I'm not sure if there's any place in the whole chapter he says they're actually correct.

Maybe I'll comment more on this later, but for now on to the paper.

What do you all think - is The General Theory transformative, or is it just "stuffed crust mercantilism"? I highly recommend reading the chapter, it's one of the more fascinating ones in the book. It's easier to follow than others to, I think.

1 comment:

  1. I don't think Keynes's magnum opus is "stuffed crust mercantilism". I personally like Chapter 12 the most for Keynes's excellent writing and the fact it informally applies concepts from A Treatise on Probability. That to me, is the thrust of the General Theory - the incorporation of probability and decision-making into economics.

    BTW Daniel, he mentions the TP twice - once in a footnote in Chapter 12, and I think there is another footnote in Chapter 17 that refers back to the Chapter 12 footnote. By bringing the TP into the GT, Keynes proved the non-linearity of decision-making into economics!


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