KEYNESIAN ETHICS AS A WATCHDOG OVER ECONOMICS. I OF 3.

The following Keynes entry, which I am posting in three installments, was originally withheld for its insufficient originality on my part. However, the subject is terribly interesting, especially in our era of present and future economic crises and other such woes. So, let it serve its most evident purpose, that of its reader’s edification.

Today’s installment is Part I of 3.

The most interesting aspect of the so-called Keynesian economics is Keynes’s rejection of the fundamental principle of laissez-faire capitalism that it could function well on its own without state intervention. In his General Theory Of Employment, Interest And Money published in 1936 he argues that the best remedy for economic recessions is a government-sponsored program of full employment. Although he allegedly made most of his money from stock speculations, the mainstay of in-your-face capitalism, his argument, initially aimed at the Great Depression, but immediately generalized in theoretical terms, that depressions were not to end without what he called “a somewhat comprehensive socialization of investment” sounds more like an indictment of essential capitalist ideology than an effort to perform a cosmetic surgery upon it.

Furthermore, he is ready to enter some deep ethical waters in declaring that it was wicked to put the blame on the unemployed for their social plight. In fact, the ethical component is so pervasive in Keynes’s writings that it makes him especially interesting in the context of my approach to capitalism as-such.

[The following is a summary of Keynes’s ethical views, as permeating his economic theory. Its main source is Robert Skidelsky’s most helpful work Keynes and the Ethics of Capitalism.]

His ethical beliefs were admittedly profoundly influenced by Moore’s Principia Ethica, published in 1902. Two points about Moore’s doctrine deserve special notice. The first was the sharp distinction Moore made between ethics and morals, and the subordination of the latter to the former. The primary ethical question is What is good? or What things should exist for their own sake? The moral question, What ought I to do? can be answered only by reference to the question What is good?

The second point is Moore’s philosophical idea that good is an objective, indefinable property, intuitively known to be present or absent in any object or state of affairs. We perceive a state of affairs to be good in exactly the same way as we perceive grass to be green. Goodness can no more be defined than greenness. The important consequence of this belief was that rationality attaches to ends, not just to means. Hence the importance of his remark about economics being a moral, not a natural science, employing “introspection and judgments of value.” What is to be maximized in this system is not happiness, but goodness. Moore is concerned about any attempt to define goodness in terms of happiness, which he views as the naturalistic fallacy, that is, deducing what ought to be from what is. Keynes later counted as one of the most important advantages enjoyed by his generation having escaped from the Benthamite tradition, which he regarded as “the worm gnawing at the insides of modern civilization, responsible for its present moral decay,” because it led to the “over-valuation of the economic criterion” or as one might now say because it led to setting up the growth of GDP as the main measure of social progress.

End of Part I. To be continued tomorrow.