Michael Perelman wrote:
I was thinking about the role of subjectivity in economic theory. does this make sense: With Keynes and Marx, subjective considerations (expectations) drive real investment. With Hayek, subjective considerations determine values in the product market, while objective factors determine real investment.
This seems to me to overlook differences in their foundational ideas about human "subjectivity".
Keynes and Marx adopt a view of "rationality" very different from Hayek's, one based on very different ontological and anthropological (in the philosophical sense) assumptions. In their view, the fully "rational" individual is the "universally developed ndividual" characterized by a "will proper" and a "universal will" and willing and actualizing a life creating and appropriating beauty and truth within relations of mutual recognition.
This, however, is only the human "potential". Its realization by both the species and the individual requires a process of "education". In the case of the species, human history is understood as such a process.
During this process willing and acting are not fully "rational". In Marx's case, this is expressed in the role assigned to the "passions", a concept Marx has taken from Hegel. The same concept appears in Keynes explicitly treated as "irrationality" in the sense of psychoanalysis. Keynes makes such irrationality a defining feature of "the three fundamental psychological factors" of the General Theory: "the psychological propensity to consume, the psychological attitude to liquidity and the psychological expectation of future yield from capital-assets". The first two of these have close counterparts in Marx's treatment of the capitalist "passions".
Finally, both Marx and Keynes treat human subjectivity as the product of "internal relations". This is a form of "individualism" in the sense of treating individuals as the only locus for agency and the realization of value. The "essence" of the individual, however, is treated as the outcome of her relations. This "essence" includes both the potential for "rationality" and the degree to which this potential is realized (in Keynes's case, the latter is identified with the degree to which individual thinking and feeling is characterized by "irrationality" understood psychoanalytically). Hayek, in contrast, implicitly adopts an "atomic" individualism for which the "essence" of the individual is independent of her relations, i.e. he impliicitly treats relations as "external relations".
These differences appear in Keynes's reply to Hayek about "planning". Keynes allows for "planning" to take different forms depending on the extent to which it takes place in a community where social relations develop in individuals a capacity "to think and feel" "rightly".
“I should therefore conclude your theme [Hayek’s in The Road to Serfdom] rather differently. I should say that what we want is not no planning, or even less planning. I should say that we almost certainly want more. But the planning should take place in a community in which, as many people as possible, both leaders and followers, share your own moral position. Moderate planning will be safe if those carrying it out are rightly orientated in their own minds and hearts to your own moral position. … Dangerous acts can be done rightly which would be the way to hell if they were executed by those who think and feel wrongly.” (Letter to F.A. Hayek, 28 June 1944 in XXVII 385-8) [The endorsement here of Hayek's "own moral position" shouldn't be taken at face value since Keynes elsewhere makes clear that he believes both this position and much else in Hayek's thought and feeling express significant psychopathology.]
Ted
