Dead Men Left

Sunday, June 18, 2006

"Cargo Cult Keynesianism"

Really good post over at Aaronovitch Watch on Aaro's bubble-headed attempts to whip up enthusiasm about neoliberalism in India. I'm not too sure about "Cargo Cult Keynesianism", though: partly it's a slight twitchiness about taking Keynes' name in vain (reinforced by the bloody awful posthumous treatment dished out to J.K.Galbraith), partly it's the strong suspicion that Keynes is better read (as Galbraith, arguably, read him) as an economist of institutions, rather than of behaviour - if that distinction makes sense (Toni Negri wrote a brilliant earlyish essay on just this, turning Keynes into a theoretician of "supply side" production relations, rather than effective demand - doesn't seem to be online, but these notes give a flavour).

It's difficult to square, for example, the neoliberal enthusiasm for privatisation and mobile finance capital with Keynes' explicit calls for the "socialisation of investment" and the "euthanasia of rentier": "Keynesianism", in the sense Aaronovitch Watch intend, seems to refer to what Joan Robinson called "bastard Keynesianism": the postwar blending of some of Keynes' less radical insights with existing neoclassical theory. What we have now is still more watery substance, the so-called "new consensus": the reduction of Keynes to little more than a vague idea that interest rates matter, washed up with a framework that looks remarkably like the bankrupt free-market nonsense he spent the latter half of his life attacking.