Monday, December 12, 2011

That Keynes quote

An emailer brought to my attention that Greg Ransom apparently did a google book search on Keynes's "if the facts change I change my mind, what do you do sir?" quote, and sorted on date. He dates the printing of the uncited quote to 1940, which is earlier than I've ever heard it (I always heard it was first printed in the Harrod biography).

For some reason people get really worked up about the uncited nature of this quote (even Brad DeLong at one point, if I remember). Others take it to be a sign of "fickleness" or unsteadiness on Keynes's part. I find that view especially bizarre because the whole point of the quote is to say that what appears fickle to a critic isn't fickle at all if you realize that the ground has moved beneath you!

Anyway - I've always liked it, and see no reason to doubt it. It certainly sounds like something Keynes would say. We know he allegedly said it when discussing the import tariff at the Treasury in the early 1930s. Clarke calls it a "Cambridge oral tradition", which is probably where Harrod picked it up - he had been at Cambridge briefly, certainly was in contact with the department, and certainly talked with all sorts of people for the book. Since Harrod is dead, Robinson is dead, Pigou is dead, and everyone in the room at the Treasury that day is dead, I'm not sure what the point of fussing over it more than that is. Note that it's attributed (citing Harrod or whoever you want), and keep your eyes peeled if you're going through papers and correspondences at the time to see if anyone mentions it. Even then it will still be attributed.

Perhaps I would make an atrocious historian but I personally don't see much more to it than that.


  1. "When the facts change I change my mind.
    What do you do, sir?
    - John Maynard Keynes

    If I'm not wrong, Skidelsky has stated that quote is apocryphal.

    In any case, sometimes, I wonder the truthfulness of Keynes's colleagues. For example, Richard F. Kahn telling Lord Skidelsky that "Keynes was a poor mathematician by 1927", when Keynes had been praised by Russell and Whitehead with regard to his mathematical aptitude, it looks awfully suspicious and doesn't quite add up...

  2. Quotes and idea's get attributed in all sorts of weird ways. I remember reading a story somewhere about a Federal Reserve Lecture sometime in the early forties attended by both Keynes and Abba Lerner. When Lerner suggested that deficits could be used to finance the 'necessary' increase in total spending Keynes thought it was a shocking suggestion.

  3. I need to do a post on fiscalism and Keynesianism sometime...

    ...I don't think it's as simple as "Keynes was by no means a modern fiscalist", nor, of course, is it "Keynes loves deficit spending". Some of the people who are right to recognize the differences between Lerner and Keynes (and almost all modern Keynesians are with Lerner on this) take it too far. Keynes does advocate loan expenditures, quite explicitly (I know Brady's view on this Blue Aurora).

  4. Do you think Dr. Brady is among the people who take it too far? I don't think he does, but I do disagree with him on the political feasibility of a balanced budget multiplier based on the capital budget.

  5. Well to be honest I don't entirely understand his view on it, although I've read it. He certainly doesn't think loan expenditures amount to deficit spending, but then he goes on to describe loan expenditures in a way that sounds exactly like deficit spending to me. If the distinction is only between a deficit financed capital budget and a regular budget, I can't say it makes all that much sense to me to say he's against deficit spending.

  6. Right, I figured you guys were with Lerner on this one, but I thought it was an interesting story about Keynes not pushing the General Theory to its full conclusion when giving out advice. Of course saying "Keynes was no fiscalist!" or "Keynes loved deficit spending" is at odds with the facts and takes a partial truth a bit too far.

    It does, however, demonstrate a hesitance and prudence in applying his theory as a blanket to actual practice that is admirable. Its always possible he was just trying to one up Lerner, but was in the wrong place and time for being strictly anti-deficit to be a good way to go about that.

  7. I don't fully agree with everything Brady does or says, but I'm sure you could ask him. I have however, read parts of Volume XXVII of the CWJMK, and it seems that Brady was correct that Keynes was opposed to deficit finance. Keynes politely disagrees with James E. Meade in several exchanges of correspondence.

  8. With modern welfare budgets I'm not 100% sure that the current account can always be balanced as Brady suggests, and I don't think it's necessary. Keynes appeared to have a 'cautiously supportive' view on stimulus:

    In none of my quotes does he mention the difference between the current and capital accounts - I think Brady may be overstating his case somewhat.

  9. Have you checked Volume XXVII of the CWJMK, Unlearningecon? While Brady may be overstating his case somewhat, it does seem to have a factual basis, judging from the correspondence in Volume XXVII.

  10. I have not read the CW as I can barely afford one volume!

    I will, eventually...


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