Monday, May 24, 2010

bastardized keynes or keynes the ******? (continued)

I failed to mention in my previous post that "Economic Possibilities For Our Grandchildren" is included in Stephen Marglin's Social Analysis 72, Economics: A Critical Approach syllabus. It's not an important part of what I'm talking about, but I thought I'd mention it since I'll be drawing on many of the sources in that syllabus for my writings this summer.

I continue my response to this short article by stressing the conclusion made in the previous post: Keynes' work doesn't stray very far from the mainstream view of economic theory. Keynes' grand view of the economy is still very divorced from the tough political issues that need to be addressed if some of the conclusions which Keynes arrives at are to be implemented.

There is another subtle assumption in Keynes' writing here which I turn to now, an assumption which drives at one of the fundamental principles of mainstream theory: people face tradeoffs. Specifically, people face tradeoffs between work and leisure.
I feel sure that with a little more experience we shall use the new-found bounty of nature [once we are at the stage of technology at which we can solve the 'economic problem'] quite differently from the way in which the rich use it to-day, and will map out for ourselves a plan of life quite otherwise than theirs. For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. (368-369)
But this is not a "given," it is a product (as is everything else) of history and culture. First of all, the very use of a Judaeo-Christian biblical concept should set off some bells and whistles. Other religions have different understandings of the role of work in life. The Islamic religion, for example, has a more positive view of work. Buddhism no doubt also has a different view of work (though I don't know enough about it to comment). Second, Marx himself had a very different view of work, and argues that it is only the social system of capitalism which fosters the neoclassical understanding of the modern individual as facing a dilemma of tradeoffs between work and leisure. As David Spencer notes in a recent paper in Labor History:
People were required to work in order to meet their basic material needs but they also benefited from the challenge and difficulty of work itself. Marx suggested that human beings were drawn to work as a means to realise their 'species being' and he considered the participation in work as the basis for a contented and fulfilled life. ("The 'work as bad' thesis in economics: origins, evolution, and challenges," Labor History Vol. 50, No.1 [Feb. 2009]: pg. 48)
Keynes revolutionized the field of economics in methodology, theory, and policy conclusions. But Keynes' understanding of the economy is not radically different from those in the profession he aimed to overthrow. In a sense, it was a trading of places between one set of elites and another. Basic bourgeois understandings of the economy did not change.

That concludes my comments on this article. Within a week or so, I will tie this argument up with an examination of Linder's own analysis of the "Rise and Fall of Keynesianism," from Anti-Samuelson.


  1. Veblen has also a very strong argument against 'work as a burden' approach. 'The instinct of workmanship' and 'idle curiosity' are two important inherent tendencies of human beings for him. Especially 'the instinct of workmanship' creates new ways of doing things, improves efficiency, leads to creative work. Indeed, it is the most important causes of technological improvement. And the motivation for work is not an individual response to incentives or pure material gain. First it is something collectively done, habituation of the sense of workmanship forms the culture and work has a value of itself, it is not only a mean; an end in itself. This is an extremely positive view of work and I think it has some similarities with Marxian analysis, idle curiosity for example can be easily thought as a way of self- fulfillment.

  2. Yasemin --

    I think you should definitely check out the paper I mention in this post. It mentions Veblen as well. What are the implications for micro theory of altering this assumption?

  3. It's always interesting to me how academic economists in particular so easily sign on to the labor-leisure trade off. Couldn't they (or many of them) be making more money outside of academia? Doesn't that give them pause for even a single moment when they teach about the labor-leisure trade off?

    A slight digression: readers of this blog will no doubt be aware that the labor theory of value (commonly ascribed to Marx) goes back, at least, to Smith.

    But it is also the case that Smith actually relies on the labor/leisure trade off to justify (his version of) the labor theory of value. (The argument essentially is that commodities trade in proportions the labor time required for their production because such time is actually the cost of production -- it's a cost in terms of opportunity cost, here, the cost of leisure. So the labor theory of value becomes of cost of production theory, where the cost is leisure)

    Now, it is well-known (again, among readers of this blog) that Marx borrowed the LTV as articulated by Smith and Ricardo -- but that he, in some sense, also built on it and refined it. He did seem (in certain passages of the Grundrisse) to reject the labor leisure trade off as articulated by Smith. But, in doing so, he is rejecting Smith's argument for the labor theory of value. And the question I still don't have answered for myself is: What argument does he replace it with? (Especially considering that the LTV is still considered, even in Marxist circles, to be a kind of cost of production theory)
    Obviously I will have to ask this question elsewhere (like on the Marx blog) but it has been troubling me for a long time.