[lbo-talk] Great piece by Doug on What Would Keynes Do

Ted Winslow egwinslow at rogers.com
Thu Oct 6 10:55:25 PDT 2011


Doug Henwood wrote:


>> Joan Robinson said that it was a pity that Keynes talked so much about
>> investment without talking about what investment should be for.
>
> Does anyone know where she said that, and the exact quote? It's been 15 years, and I don't trust my memory for quotes.

I don't know where she said it, but, if she did, she was mistaken.

The long run future to which he looked forward, was, as you point out , to substitute rational value criteria (not accurately represented as "civilized epicureanism") for the irrational ones - those deriving from "the money-making and money-lloving instincts" - whose dominance in economic motivation he treated as "the essential characteristic of capitalism."

What the dominance of the irrational money motives over private investment was "for" was, first, to create, as they were assumed to do by Marx, the material abundance actualization of rational values would require and, second, to canalize deeper and more dangerous proclivities that would, in the absence of this outlet, find expression in such things as fascism, Nazism and war.

In the interim, however, when it would still be necessary to pretend that "fair is foul, and foul is fair," rational criteria were to be given a much greater role in the determination of public investment and public expenditure generally. As he put it in 1942:

"Where we are using up resources, do not let us submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income, with no other denominator of values but this. I should like to see the war memorials of this tragic struggle take the shape of an enrichment of the civic life of every great centre of population. Why should we not set aside, let us say, £50 millions a year for the next twenty years to add in every substantial city of the realm the dignity of an ancient university or a European capital to our local schools and their surroundings, to our local government and its offices, and above all perhaps, to provide a local centre of refreshment and entertainment with an ample theatre, a concert hall, a dance hall, a gallery, a British restaurant, canteens, cafés and so forth. Assuredly we can afford this and much more. Anything we can actually do we can afford. Once done, it is there. Nothing can take it from us."

The main obstacle in the way of this was the dominance of public policy by the same irrationality. This dominance is what is being pointed to in the "burying bottles only to dig them up" example in the General Theory.

Ted



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