>
> It's from his Tract on Monetary Reform: "But this long run is a
> misleading guide to current affairs. In the long run we are all dead.
> Economists set themselves too easy, too useless a task if in
> tempestuous seasons they can only tell us that when the storm is long
> past the ocean is flat again."
>
> Doug
This is also the basis of Keynes's objection to arguments (e.g. sadomonetarism) defending short term pain on the ground that it will be more than fully compensated by long term gain. He argued that in many if not most instances the latter was unknowable and therefore could not reasonably be set against the certainty of short term pain.
The fact that "in the long run we are all dead" connects to this in the following way.
Constantly postponing benefits into the future would mean that no individual could ever enjoy them since all individuals must eventually die. So even if long run consequences could be predicted it would not make sense always to prefer jam tomorrow to jam today. Keynes, however, makes this preference an essential feature of the psychopathology dominant in capitalism.
He claims an important aspect of the preference's psychological basis is avoidance of the fear of death through denial.
In "Economic Possibilities for Our Grandchildren" he looks forward to a time when, though "there will still be many people with intense, unsatisfied purposiveness who will blindly pursue wealth",
"the rest of us will no longer under any obligation to applaud and encourage them. For we shall enquire more curiously than is safe today into the true character of this 'purposiveness' with which in varying degrees Nature has endowed almost all of us. For purposiveness means that we are more concerned with the remote future results of our actions than with their own quality or their immediate effects on our own environment. The 'purposive' man is always trying to secure a spurious and delusive immortality for his acts by pushing his interest in them forward into time. He does not love his cat, but his cat's kittens; nor, in truth, the kittens, but only the kittens' kittens, and so on forward for ever to the end of catdom. For him jam is not jam unless it is a case of jam tomorrow and never jam today. Thus by pushing his jam always forward into the future, he strives to secure for his act of boiling it an immortality." (vol. IX, pp. 329-30)
The General Theory passage tying "enterprise which depends on hopes stretching into the future" to "animal spirits" connects this tie to the need to "put aside" "the thought of ultimate loss", "the expectation of death".
"individual initiative will only be adequate when reasonable calculation is supplemented and supported by animal spirits, so that the thought of ultimate loss which often overtakes pioneers, as experience undoubtedly tells us and them, is put aside as a healthy man puts aside the expectation of death." (vol. VII, p. 162)
Keynes provided a related psychological explanation for the argument that the short term pain of the depression following a boom would produce more than fully compensating future increases in real wealth.
In A Treatise on Money he describes those who believe "that the real wealth of the community increases faster, in spite of appearances to the contrary, during a depression than during a boom" as "puritans of finance sometimes extreme individualists, who are able, perhaps, to placate in this way their suppressed reactions against the distastefulness of capitalism - who draw a gloomy satisfaction from the speculative and business losses, the low prices, and high real wages, accompanied, however, by unemployment, which characterise the typical depression." (vol. V, p. 246)
In the original galleys of a reply to Dennis Robertson's Economic Journal review of the Treatise, Keynes explicitly associates this psychological explanation with psychoanalysis. In the last paragraph of his review, Robertson had expressed some sympathy with the puritans of finance and suggested their policy of increasing interest rates to end a boom was not "a relic of sadistic barbarism". Keynes replies:
"Mr Robertson's last paragraph of all yes! a mere relic of Sadistic well, not so much barbarism as puritanism. But at this point psycho-analysis must take charge and economic analysis withdraw discreetly." (vol. XIII, p. 238)
In The Economic Consequences of the Peace he had claimed that in the 19th century
"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. And so the cake increased; but to what end was not clearly contemplated. Individuals would be exhorted not so much to abstain as to defer, and to cultivate the pleasures of security and anticipation. Saving was for old age or for your children; but this was only in theory - the virtue of the cake was that it was never to be consumed, neither by you nor by your children after you." (vol. II, pp. 11-2)
Ted -- Ted Winslow E-MAIL: WINSLOW at YORKU.CA Division of Social Science VOICE: (416) 736-5054 York University FAX: (416) 736-5615 4700 Keele St. Toronto, Ontario CANADA M3J 1P3