To Lisa R.: (quack)
From the great bourgeois apologist/reformist himself:
Keynes, _General Theory_, p. 161:
"Even apart from the instability due to speculation, there
is the instability due to the characteristic of human nature
that a large proportion of our positive activities depend on a
spontaneous optimism rather than on a mathematical expectation,
whether moral or hedonistic or economic. Most, probably, of our
decisions to do something positive, the full consequences of which
will be drawn out over many days to come, can only be taken as a
result of [*] animal spirits [*]---of a spontaneous urge to action
rather than inaction, and not as the outcome of a weighted average
of quantitative benefits multiplied by quantitative probabilities."
The above is not unrelated to his views of risk and uncertainty
which are not too far different, although somewhat so, from those of
Frank Knight who distinguished them by saying that risk is measurable
and uncertainty is not. Keynes's clearest statement comes in his 1937
article in the _Quarterly Journal of Economics_ on "The General Theory
of Employment" in which identified risk as "insurable risk" and linked
it with natural phenomena such as the weather for which presumably an
objective and discoverable probability distribution may exist. His
examples of uncertainty all arise from human action, with war, changes
in interest rates, and the future status of wealthy persons being the
examples given. In the _GT_ he famously spoke of the price of copper
20 years in the future as "fundamentally uncertain."
I think Doug H. is partly right about what Keynes was driving at,
certainly a revolutionary overthrow of capitalism would be a source of
fundamental uncertainty. But I think that he overdoes this. Thus,
there is no discoverable or knowable probability distribution on what
the Dow-Jones Average will be ten years from now. It is fundamentally
uncertain and for a lot of reasons.
Barkley Rosser
