an odd shift of perspective

Who would have thought. A random mentioning here of the DeLong-Harvey scuffle a couple years back led me to a discussion of that event by Econospeak, which led me, in turn, to a perspective on Keynes that I hadn't completely understood, but which is shared fervently by my colleague Josh Mason, and which I now appreciate much more.

My beef with Keynes, from day 1, has been with an overemphasis on the technocratic issues, ignoring the political issues that would, it seems to me, arise when the state tried to take over investment. The idea that we could solve the problem of capital scarcity by going this route is certainly powerful, and I would argue that with the appropriate institutional alterations it could be implemented. (For example, if you found some way of democratizing the workplace through a revolution then maybe it would work. Although even in this scenario, I suspect that if you do not abolish markets you will not be able to prevent market power.)

But it turns out that Keynes had a few other ideas up his sleeve, though they aren't discussed in the General Theory and they don't seem present or even implicit in Keynes' model of the economy. What is, then, the source of these ideas? To echo what JW's been screaming at me for ages, Keynes was inspired by philosopher G. E. Moore's discussions of what goes into the "good life". In fact, in a letter he wrote to T.S. Eliot in 1945 Keynes gets quite specific about it (now, why he was corresponding with old Tommy Stearns in the first place is a question that I would like answered, but I don't have easy access to the Collected Works at the moment to find out):

The full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well by consuming more or working less.

Read the rest of the letter here, it's quite interesting. The policy is a kind of civil disobedience that has been proclaimed by radicals throughout history: in a situation of all-encompassing power, resist by not resisting. If you truly want to "abolish the rentier class", take away its fuel. As you slowly starve the beast, the concept of capital scarcity will slowly but surely evaporate and you have Keynes' utopian vision. In short, this is a fully developed, step-by-step prescription for bringing about massive change in society in a very radical way. Not in a Marxist way, mind you, but an important contribution to a utopia nonetheless.

Now, I've always known that Keynes didn't simply advocate for public control of investment. I knew that he favored strong unions, too. But I've always believed that Keynes was limited because his underlying model of market processes was very conservative. That is: keep the unions, keep the technocratic investment board, but don't forget to also include the bourgeois in power, too. Defend capitalism; just make it a more stable one where the rentiers don't play such a large role in government policy ("yeah right!" I used to exclaim to myself). But I think the policy ideas elucidated above demonstrate quite clearly that Keynes had a different understanding of humanity's goals in mind.

Well, now, it seems that I agree a bit more with my friend Josh on the issue...