Jim Devine wrote:
I am not surprised that MF endorsed it, since Keynes was pre-Keynesian at the time.
The social ontological and psychological ideas to which I just pointed are present throughout the Tract.
At the beginning, for instance, Keynes provides a psychological elaboration of what he calls "the investment system" characteristic of mature capitalism. This has the psychology of both the "business man" - "a creature of instinct and of nature, primitive in his self- expression, unsophisticated in self-knowledge" - and the "rentier" as expressing significant psychopathology, the latter more so than the former.
The expression of psychopathology that Keynes here takes as what he later calls an "essential characteristic of capitalism" is a psychopathological "love of money" rooted in "deep instincts."
It's this psychological fact that makes the "capital levy" - the "rational method" of preventing the claims of the "inactive" class (the "rentiers") on the "active and working elements" from becoming an "intolerable burden" - impracticable.
"It [the 'capital levy'] is the rational, the deliberate method. But it is difficult to explain, and it provokes violent prejudice by coming into conflict with the deep instincts by which the love of money protects itself." (IV p. 55)
The same psychopathology does, however, make inflation an alternative practicable method.
Even earlier, in The Economic Consequences of the Peace, he had, like Marx, begun treating capitalist irrationality (what Marx, sublating Hegel, treats as the "passions" of capitalism) as an unconsciously rooted progressive force working unintentionally to create the material basis of a truly good society - "an ideal social republic of the future." (It's this idea that he identifies in his final posthumously published Economic Journal article as "the wisdom of Adam Smith.")
He says there of the "purposiveness" dominant in 19th century capitalism:
"the capitalist classes were allowed to call the best part of the cake theirs and were theoretically free to consume it, on the tacit underlying condition that they consumed very little of it in practice. The duty of 'saving' became nine-tenths of virtue and the growth of the cake the object of true religion. There grew round the non- consumption of the cake all those instincts of puritanism which in other ages has withdrawn itself from the world and has neglected the arts of production as well as those of enjoyment."
This had a positive consequence not consciously intended by those so motivated.
“In the unconscious recesses of its being [the 19th century] society knew what it was about. The cake was really very small in proportion to the appetites of consumption, and no one, if it were shared all round, would be much the better off by the cutting of it. Society was working not for the small pleasures of today but for the future security and improvement of the race -- in fact for 'progress'. If only the cake were not cut but was allowed to grow in the geometrical proportion predicted by Malthus of population, but not less true of compound interest, perhaps a day might come when there would at last be enough to go round, and when posterity could enter into the enjoyment of our labours. In that day overwork, overcrowding, and underfeeding would come to an end, and men, secure of the comforts and necessities of the body, could proceed to the nobler exercises of their faculties. One geometrical ratio might cancel another, and the nineteenth century was able to forget the fertility of the species in a contemplation of the dizzy virtues of compound interest.” (II 12-3)
These ideas were invisible to Friedman. They also disappeared from what subsequently came to be called "Keynesian," including from what's called "Post Keynesian." So, in this sense, Keynes was never a Keynesian.
Ted _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
