|Author(s):||Tily, Geoff |
|Reviewer(s):||Tily, Geoff |
Published by EH.Net (March 2020)
Response to Bradley Bateman’s Review of Robert W. Dimand and Harald Hagemann, editors, The Elgar Companion to John Maynard Keynes — by Geoff Tily.
I am grateful to Bradley Bateman for his remarks on my essay in the Elgar Companion to John Maynard Keynes. My aim was to emphasize the over-riding importance of Keynes’s monetary initiatives, necessarily including the international as well as British perspectives. I did not address the details of subsequent academic and policy debate, and, as Bateman points out, I did not address the contributions of those who have departed from the conventional view of “Keynesianism.” However, elsewhere I have devoted a good deal of attention to the contemporary literature. Of most relevance are a review of The Return to Keynes (2010) and a review essay on the Cambridge Companion to John Maynard Keynes (2006), both edited by Bateman with others and published on each side of the “great recession” (Tily, 2013, 2011).
These reviews tackle contributions by a number of the scholars cited by Bateman. For example in the latter I devoted a good deal of attention to G. C. Peden, recognizing his important contributions on British policy and especially as one of the few who have addressed substantially Keynes’s monetary policy. I stand by my criticism that Peden portrays “… these matters as ad hoc, rather than as a permanent backdrop or preoccupation.”
Keynes’s theory and policy amounted to a great deal more than Bateman’s suggested “preference for low interest rates over fiscal deficits.” Keynes warned that permanently low interest rates (across the spectrum) were essential to the prosperity and stability of the economic system. For me, the ongoing economic (and political) crises of the twenty-first century are rooted in the loss of this practical conclusion and the dismantling of the associated policy and institutional infrastructure. A fuller and freely accessible take on these matters is in my “As If Keynes Had Never Lived,” which was originally given as a lecture at King’s College Cambridge at a conference celebrating the eightieth anniversary of The General Theory (Tily, 2016).
As an aside: this perspective gives me a very different take on outcomes, not least that Keynes should be judged against the successes of the golden age rather than the failures of chasing growth the 1970s. But I would not want the reader to have the impression that my essay is an empirical argument: the figures were intended simply to supplement and illustrate the story.
My fundamental concern with the approach of Bateman and those he champions is that Keynes is either contained in the past or deployed merely in support of the contemporary policy consensus (though any consensus has somewhat unraveled compared to the view in Bateman et al. 2010). In my book (Tily, 2006) I argue Keynesianism was a different and rival theory to Keynes’s own. A similar argument is made in the Cambridge Companion, where Keynesianism is found to originate in various “proto-Keynesian” contributions (a term attributed to Peter Hall). While I trace the origins of IS-LM to contributions by Dennis Robertson, the Cambridge Companion emphasizes widespread policy preferences for demand management and “deficit spending” (“in the interwar period in Sweden, Japan, the United States, France, Italy and Germany,” p. 284) and emerging preferences for formal mathematical models (e.g. p. 36). My review of the Companion betrays a serious frustration that having identified (or acknowledged) this intellectual sleight of hand — and moreover (partially) recognizing Keynes’s monetary policy initiatives — the opportunity for a material re-assessment of Keynes is immediately closed down. (Doubtless any frustration was exacerbated by my efforts to do the opposite almost in exact parallel.) Instead Keynes is renewed as an “activist,” willing creatively to deploy monetary and/or fiscal policy according to circumstance. And this approach is common to many of the scholars praised in Bateman’s review, not least D. E. Moggridge, Susan Howson and Peter Clarke. In his (2009) biography of Keynes, Clarke also finds the textbook interpretation incorrect. He harshly condemns any rethinking as “anachronistic ventriloquism.” Acceptable only is a “pragmatic Keynesianism,” which licenses “fresh approaches to the novel economic difficulties of our own era — to tackle them actively rather than take refuge in inert doctrinal purity” (180).
For me this is an absurd reaction to the realization that the textbooks got Keynes wrong. As global policymakers fall short in their efforts to resolve a global crisis of private debt akin to that which motivated The General Theory, the position appears reckless in the extreme. Though of course there is a certain convenience in Clark’s interpretation: with Keynes relevant only to the past, the crisis cannot be the fault of the economics profession getting it wrong. This is not to say that Keynes’s word is final, but I very much doubt we can make much progress without a proper understanding of the substance of his theory that has been denied by the Keynesian interpretation.
I hope these comments and the associated contributions convince Professor Bateman that my work is less “incomplete” than he judged from the essay in the Elgar Companion. But even more I hope to convince him to distance himself from attempts to close down any debate about “what Keynes really meant.”
Clark, Peter (2009) Keynes: The Twentieth Century’s Most Influential Economist, London: Bloomsbury.
Tily, Geoff (2006) The General Theory, The Rate of Interest and ‘Keynesian’ Economics, Basingstoke: Palgrave Macmillan.
Tily, Geoff (2011) “Another ‘Useful Fiction’?” review essay on Roger E. Backhouse and Bradley W. Bateman, Eds. (2006) The Cambridge Companion to Keynes, Critique of Political Economy, 1, Autumn, 121-52. Online at http://copejournal.com/wp-content/uploads/2015/12/geoff-tily-another-e2809cuseful-fictione2809d.pdf.
Tily, Geoff (2013) Review of Bradley Bateman, Toshiaki Hirai and Maria Cristina Marcuzzo, Eds. (2010) The Return to Keynes, Cambridge, MA: Harvard University Press, Economica, 80, 190-4.
Tily, Geoff (2016) “As If Keynes Had Never Lived: The Second UK (and World) Crisis of Financial Globalization,” Paper for Conference at King’s College Cambridge: “Maynard Keynes in King’s College and The General Theory of Employment, Interest and Money (1936), October 2016. Online at https://static1.squarespace.com/static/541ff5f5e4b02b7c37f31ed6/t/57fbce3e197aead299c495c9/1476120128630/Tily+As+if+Keynes+had+never+lived+v2+%28003%29.pdf
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|Subject(s):||History of Economic Thought; Methodology|
|Geographic Area(s):||General, International, or Comparative|
|Time Period(s):||20th Century: Pre WWII|
20th Century: WWII and post-WWII