Keynes and His Battles

Published by EH.NET (August 2008)

Gilles Dostaler, Keynes and His Battles. Cheltenham, UK: Edward Elgar, 2007. vi + 374 pp. $160 (cloth), ISBN: 978-1-85898-266-3.

Reviewed for EH.NET by M. G. Hayes, Homerton College, University of Cambridge.

This book sets out to be a study of Keynes militant, neither a full biography nor a study of his thought alone, let alone merely his economics. Gilles Dostaler (Professor of Economics at Universit? du Qu?bec ? Montreal) argues that the ?common thread throughout Keynes?s kaleidoscopic activities? is a permanent struggle to convince others of the need for radical transformation to preserve a fragile and threatened civilization. He is in no doubt that the study of this extraordinary man has continuing relevance, not only to the historian, but for our own times.

The book addresses Keynes?s war of words along four dimensions: philosophical, political, economic and aesthetic. Keynes?s struggles are identified as respectively against Victorian morality, the imposition of unpayable reparations on Germany, unemployment and the Gold Standard, and to establish the arts as an essential pursuit of a civilized society.

Ethics is the theme of Chapter 2, which includes by way of ?interlude? a detailed account of Bloomsbury. The ?Bloomsberries? are said to have seen themselves as ?architects of a new civilized, rational society, one liberated from moral constraints and devoted to the quest for beauty and truth.? Dostaler sees Keynes in revolt against the Victorian morality of his childhood, under the influence of the liberal moralists Bentham, J. S. Mill and Sidgwick who sought to establish a morality without religion, seizing upon the philosophy of G. E. Moore as a religion without morality, and finally in his mature years coming to recognize the power of tradition and convention in the maintenance of civilization against the forces of unreason.

Continuing the philosophical theme, Chapter 3 reviews Keynes?s struggle in the field of epistemology, tracing his revolt against his father?s positivism, through A Treatise on Probability and his response to Ramsey and Wittgenstein, to his critique of the inappropriate use of statistics and insistence that economics is necessarily a moral, not a natural, science.

Chapter 4 moves from ethics to Keynes?s political vision, emphasizing the significance of an undergraduate prize-winning essay on Burke. Keynes?s complex political position, which defies pigeon-holing but lies somewhere between radical liberalism and moderate socialism, avoids both reaction and revolution in favor of non-violent reform by judicious expedients, towards an ultimate ideal that engages the big questions, what is the economy for and how should we exercise the freedom that results from prosperity? The chapter closes with a second historical interlude to provide the context for Keynes?s own government and political activities. Chapter 5 considers Keynes?s early views on imperialism and pacifism, before reviewing his practical role at the heart of the British government?s external financial negotiations, especially with the United States during World War I and at the reparations conference. The chapter ends by recording the extent to which history bore out Keynes?s analysis in The Economic Consequences of the Peace, the book that made his name.

Chapters 6 through 8 turn to Keynes?s economics and his long campaign to transform both theory and policy. Chapter 6 identifies the central importance of money in Keynes?s thought, including his struggle against the Quantity Theory and to convince Classical economists of the significance of the differences between a real-exchange and a monetary economy, between saving and finance, and between real wages and money-wages. The progression of Keynes?s thought from The Tract to The General Theory reflects a sustained attempt to give expression to the insights of Aristotle, Aquinas and (perhaps) Freud, ultimately in the formal language of liquidity-preference. Chapter 7 considers his related efforts to articulate a theory of employment based on effective demand rather than the cost of labor. The genesis of The General Theory is depicted as a rationalization of long-held intuitions and of policies that were not by any means uniquely Keynes?s, such as public works. Chapter 8 links money and employment by recounting Keynes?s life-long battle, once again in great part with the United States, to civilize the international monetary system.

Chapter 9 reviews some of Keynes?s early philosophical reflections about the nature of beauty before turning to his role as consumer and patron of the arts. Dostaler conveys well Keynes?s Periclean vision of a civilization where art is valued for its own sake, and not as a means. Chapter 10 draws together this portrait of Keynes as a figure of immense stature, greatly respected but only partly understood by friend and foe alike, often wrongly given both credit and blame for the course of subsequent economic history, passionately committed to bringing about a better world by ?judicious expedients,? if sometimes overly sanguine about the relative power of ideas and vested interests.

There are some textual slips (e.g. the eighteenth century doctrine of Aquinas, p. 177; and the reference to GT Book V as Book IV, p. 197). The translation by Niall B. Mann is of high quality and I was seldom conscious that the original (2005) was written in French, despite one or two awkward phrases, although some chapters are more fluent than others. A particular feature is the interweaving of historical events and theoretical development. The bibliography and notes are comprehensive and erudite, and the timetable useful.

It is not clear to me that Bloomsbury entirely fits Dostaler?s thesis, at least in the field of ethics as opposed to aesthetics: he was its patron, to some extent its publisher, and it was part of his private life. To say as much does not detract from its influence on Keynes?s motivation and interests, particularly as an experiment in the Good Life. Yet as a field of public campaign for sexual liberation, etc? ? I am not convinced.

The General Theory is my particular field of interest and I question one or two of Dostaler?s claims. Nevertheless, he wisely sets out to avoid detailed theoretical controversy (p. 5) and on the whole he succeeds. It is unfortunate that he seems to support the idea that The General Theory is (merely) a literary work, as opposed to a scholarly treatise (pp. 196-97); by these criteria, Marshall?s Principles falls into the same category. In my opinion, Dostaler underestimates the continuity between the thought of Marshall and Keynes, both in style and substance.

Compared with Skidelsky?s chronological biography (2003), Dostaler achieves both reasonable depth and concision by following a particular thread, Keynes?s struggle against conventional wisdom, across the various fields of interest (or battle). The result is a satisfying and highly readable book, especially for non-economists and non-British readers approaching Keynes from a wider perspective, and compares favorably with Hession (1984), whose less successful unifying thesis was the relationship between Keynes?s creativity and sexuality. Dostaler?s book is also quite accessible and should be of interest to undergraduates as well as the more specialized reader. I do not detect much new primary material ? not surprising in this well-ploughed field ? but the interpretative exposition is meticulously researched, original and lucid.

References:

Gilles Dostaler, 2005. Keynes et ses combats, Paris: Albin Michel.

Charles H. Hession, 1984. John Maynard Keynes. New York and London: Macmillan.

Robert Skidelsky, 2003. John Maynard Keynes 1883-1946: Economist, Philosopher, Statesman. London: Pan Macmillan.

M. G. (Mark) Hayes is Senior Research Fellow in Economics at Homerton College in the University of Cambridge. His major work on Keynes is The Economics of Keynes: A New Guide to The General Theory, Edward Elgar, 2006. http://www.homerton.cam.ac.uk/teaching/fellows/mark_hayes