My Aunt Sally,or,‘our’ Keynes and the varieties of Keynesianism

Keynes addressed The General Theory to his ‘fellow economists’, most of whom would ‘fluctuate’, he expected, ‘between a belief that I am quite wrong and a belief that I am saying nothing new’. That he turned out to be right does not mean he was clairvoyant; this is the standard treatment of anyone who says something new in economics. Indeed, his forecast was particularly easy to make, because he aimed his critique at the ideas then dominant in economics, and named names: ‘the followers of Ricardo, those, that is to say, who adopted and perfected the theory of the Ricardian economics, including (for example) J. S. Mill, Marshall, Edgeworth, and Prof. Pigou’ (Keynes, 1971–1990: 7, 3). The last of these – arguably set up as the whipping boy of the book, an entire appendix dedicated to exposing his errors – was Keynes’ senior colleague at Cambridge and among the most influential economists in England.

Keynes lumped these ‘Ricardians’, and a host of others, into the category ‘classical economics’. As he characterized them, classical economists are not far from today’s ‘neoclassicals’: they tend to assume that markets are the most appropriate distributional mechanisms, that labour is a factor of production like any other and that prices, if left to self-adjust, will ensure full and efficient employment of all available resources and hence optimal economic outcomes. One problem with the classical economics label, however, is its lack of specificity; Keynes often played pretty fast and loose with it. The targets of his criticism were quick to point this out. As Dennis Robertson (Ohlin et al., 1937: 436) said in an early review, Keynes tended to ‘clap that label opprobrii causa on to the vacuous countenance of some composite Aunt Sally of uncertain age’.

Among other problems they identify in ‘Keynes Resurrected?’, my four respondents each in their own way aim a similar critique at me, and justifiably so. (Here, literally parenthetically, I would like to thank them for their powerful commentaries, each of which was insightful and challenging but also very generous.) In my account, there is a way in which Keynesian reason is something of a ‘composite Aunt Sally of uncertain age’. There are several things going on here. Partly, this is a result of how embarrassingly long I have been working on this project (the paper is part of a larger investigation begun in late 2009). Like many others who spend years studying a set of ideas, tracking them across time and space, I have developed a tendency to find traces of Keynesianism everywhere I look. This is both curse and gift: if I sometimes find it where it’s not, I have also, I think, found it where we did not know it was, and in forms we did not recognize. This partly explains, if it cannot justify, the unwieldy number of ‘big questions’ Christophers quite fairly enumerates.

Partly, too, the argument I try to make regarding the ubiquity of Keynesian reason is complicated by the fact that I made the terminological choice to link the concept to an actually existing, prolific, and not-exactly-unknown figure. The name ‘Keynes’ and the term ‘Keynesian’ are attached, in many people’s minds, to very specific things – policies, models, concepts, theories, histories, people. As Peck says, the extent to which the ‘k-word’ is adequate to any given time and place depends on how we define it. Since so many already have a definition they trust, and since the history of Keynesianism is at least partially one of a rancorous fight over what the word means (Patinkin, 1990), it is inevitable that my ‘Keynesian reason’ does not look as some others think a properly Keynesian reason should. All of which is to say that uncertain age and composite character are by now permanent features of Keynesianism.

I would venture to add, too, that while my four respondents clearly know their Keyneses, the problem is greatly exacerbated by the fact that many just don’t. This is true not only of dogmatic free marketeers who almost universally have absolutely no idea what they are talking about when they deride Keynes or Keynesians, but also of left or radical critics, for whom Keynes is usually simply an apologist for capital, and the details of Keynesianism merely questions of capitalist technique. I have met very few social scientists, let alone geographers, who have read any of Keynes’ work or that of prominent Keynesians. Consequently, much of what circulates as ‘fact’ about Keynes himself is vague or empty, and Keynesianism is widely misunderstood, even in the familiar realm of economic policy. Few think of tax cuts as Keynesian policy, for example. They are considered a staple of the Reagan–Thatcher anti-Keynesian heydays. Yet the 1964 Kennedy–Johnson tax cut was the high point of US Keynesianism (Temin and Vines, 2014: 91).

Finally, the Aunt Sally problem in my account is partly a result of what I am trying to do in the paper. If I am perhaps too generous with myself, I might even say it is unavoidable, or at least really, really hard to avoid – hard enough that for all the paper’s weaknesses, I feel sure I should not throw in the towel if I have failed in this instance. In fact, the most troubling problems my critics identify – the Eurocentrism, the unfinished nature of some of the arguments, the tendency to overgeneralization, the pessimistic lack of alternatives – while certainly my own fault, are nonetheless in large part a product of what I want the paper to do. This might seem like a stupidly obvious thing to say, that is, the flaws in the argument are the parts where I fail to make the argument. Perhaps, but what I also mean is that there is an important way in which what the paper is trying to describe, at least as I understand it, cannot be articulated in ways or words shorn of their own leakiness, imprecision and anxiety. If I could somehow communicate it otherwise – ‘rigorously’, say – it would misrepresent the dynamics of interest.

I say none of this to diminish my critics’ insight or accuracy, nor to excuse myself of the flaws, as if what I am trying to do is so difficult or important that the argument’s problems don’t matter in the grand scheme of things. Quite the contrary. I am especially unsettled by the way in which, as Sheppard emphasizes especially, I can slip so easily into an outdated, Anglo-European mode, a ‘we’ that is hardly an ‘everybody’. I am also sorry to say that even though it is not a major theme in the responses (although Schoenberger certainly suggests the possibility), some of my most politically engaged students find the paper demoralizing, as if I am saying there is no point in their efforts, the bastards have won. I can honestly say I never intended that, which makes the fact they read it in there anyway quite troubling.

Rather, what I did intend was to get at a ‘reason’ continually reconstructed in an effort to simultaneously rationalize and justify what is essentially a sensibility or ‘structure of feeling’. This is the reason it can manifest itself in such disparate realms as German ‘idealist’ philosophy and Anglo (idealist) political economy. That reason, the very constitution of which demands a constant struggle to maintain even partial coherence, is literally defined by its lack of clarity. The ‘vague and brutal command of clarity’, as Adorno (1993: 98, 106) remarked, ‘can be demanded of all knowledge only when it has been determined that the objects under investigation are free of all dynamic qualities that would cause them to elude the gaze that tries to capture and hole them unambiguously’. If I am right that Keynesian reason is a theoretical edifice built and constantly rebuilt in the shadow of perceived existential risks to civilization – and on this point I remain convinced – clarity is unlikely to characterize it.

My point is not (or not only) to defend myself with fancy Frankfurt social theory. It is, rather, that the irreducible ill-definition of the risk Keynesians aim to confront – no less than the trajectory of history itself – mean Keynesianism’s polyvalence and polymorphism are both necessary to address ‘radical uncertainty’, and a result of that uncertainty. For both Hegel and Keynes himself (and for more recent avatars like Joseph Stiglitz and Thomas Piketty), what I call Keynesianism reason is a science constructed post hoc, a desperate attempt to confirm an unshakable but almost inarticulable intuition. That any effort to understand the ideas and sites that matter to such an enterprise produces something of a composite Aunt Sally is not, I would suggest, merely the inevitable outcome of forays into complex generalities. It is, rather, the plain ol’ truth of the matter. My account of that truth is surely well-seasoned with mistakes, blindness and errors of judgement. Some of these I now see and regret, but I refuse to throw in the towel because of them.

I should immediately say that none of the four commentaries, as I understand them, tell me to pack it in and go home. In fact, I feel like all the respondents are essentially supportive of the endeavour, if critical or unconvinced of significant components of my argument. That argument is that Keynesian reason is essentially a product of liberal capitalism, an anxious analysis of the poorly kept secret that in what Keynes 1971–1990: 7, 97–121) calls a ‘modern community’, poverty exists not despite but because of liberal capitalism. Keynesianism is a ‘variegated’, immanent critical theory of the political economy of those ‘modern communities’, a search for a means to escape this seemingly inescapable dynamic by means other than radical or revolutionary transformation.

As such, despite its enormous ambition, Keynesianism is a fundamentally pragmatic theoretical and political posture. I use the term ‘pragmatic’ in its colloquial sense of ‘practical’ or ‘useful given existing conditions’ (e.g. Temin and Vines, 2014), but also in the somewhat more specific meaning it has in the American philosophical tradition, for example, in the work of William James, John Dewey or Richard Rorty. Although an imprecise category, philosophical pragmatism is distinguished by an emphasis both on the social operation of concepts and ideas and on their historical contingency. Pragmatists do not reject the centrality of concepts like truth and justice, but deny such concepts any a priori universality. In other words, truth or justice must be constantly (re)constructed by ‘our’ communities in ways that ‘work’ for ‘us’. As Rorty (1979: 176) famously puts it, truth is ultimately ‘what it is good for us to believe’. Principle is of no value for its own sake; it is valuable solely as a social construct that can help solve practical problems. As Dewey (1963), for example, emphasized in his Liberalism and Social Action lectures – published one year before The General Theory, and with which Keynes would have whole-heartedly agreed – on these grounds, a ‘pure’ liberalism cannot meet our needs. The only approximation to the principle of liberal freedom we might realize inevitably depends upon a range of fundamentally illiberal social action. Whatever their ideological appeal, commitments to supposed truths like ‘free markets’ or ‘individual autonomy’ – or, unfortunately, ‘deep democracy’ – are useful only to the extent that their operation can ‘better’ the ‘world in which we actually live’.

Although one might draw connections between it and the thought of G. E. Moore, whose attack on any formal or universal concept of the good in Principia Ethica (1903) greatly influenced his ideas as a student, Keynes did not associate himself with pragmatism. But his thought, it seems to me, is undeniably pragmatic in the above sense, as is virtually all of Keynesian reason. Keynesians in this sense have little interest in the Platonic truths of freedom, efficiency and the Darwinian ‘nature’ that obsess classical economists old and new. Their concern is with what works for us in the immediacy of the actually existing world.

The big question, of course, is who that collective pronoun describes. What or who is us? I will not pretend to have an answer. Indeed, there is no answer, only an infinite series of more or less defensible historically and geographically specific responses, explicit or not, intentional or not. Indeed, it is worth pointing out that there is no more reason the answers must be ‘non-radical’ than there is that ‘what it is good for us to believe’ is non-revolutionary. The infinite range of us contains the full spectrum of political possibility. What I would like to consider, however, is the related challenge to my claim that Keynes is our Hegel. Indeed, Peck suspects he is not even our Keynes.

Acknowledging the (not insubstantial) problems with my own use of the first-person plural, noted by all four respondents, I would nonetheless suggest Peck’s and Sheppard’s scepticism is misplaced, or at least that it risks vastly underplaying the importance of a crucial thread in the history of Keynesian reason and Keynes’ and Keynesian political economy. (Again, I must acknowledge I am referring to the argument I understand myself to be making; concerning my success or failure to do so, I am probably not the best judge.) That thread is the essentially pragmatic sense in which Keynesianism and Keynesian reason emerge as ‘good for us to believe’ in particular (crisis-determined) moments in liberal capitalism, that is, moments in which Keynesianism is resurrected in a form we recognize as ‘ours’. As I understand it, that form is conceived as both ‘transhistorical’ – whoever we are, our Keynes is always at least partly a resurrection of an earlier Keynes – and contingent or particular – Keynesianism not only arrives to meet our needs but, in doing so, in many ways recruits or produces a “we” that we understand to include ourselves. Which is to say that there is no Keynes or Keynesian reason that is not ours. In any given situation, they are always somebody’s ours. Keynesianism’s fundamental pragmatism means there is no Keynesianism that does not at the very least attempt to produce a “we” to which it then belongs.

That was certainly Keynes-the-person’s objective with his public and academic work throughout the 1930s and 1940s. It is the sense in which we should understand pronouncements like this:

For the resources of Nature and men’s devices are just as fertile and productive as they were. The rate of our progress towards solving the material problems of life is not less rapid. We are as capable as before of affording for every one a high standard of life – high, I mean, compared with, say, twenty years ago—and will soon learn to afford a standard higher still. We have not been deceived. But to-day we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. (Keynes, 1971–1990: 9, 126)

And on this front, the successes of the post-war varieties of Keynesianism were often remarkable, however different they sometimes were from Keynes’ own variety. Indeed, as I have argued, one of Keynesianisms’ signal ideological achievements was the construction of a set of national “wes” that partially bridged the ideological gap between labour and capital, and between state and civil society, thus paving the political path of neo-liberalizations whose devastating distributional implications would have been unacceptable prior to “our” Keynes of the 1950s and 1960s. Christophers, Sheppard and Peck are certainly right that I have not made that argument as fully as required, or even that it is ultimately untenable. As for the rise of finance – a development that was in many ways fuelled by the relative plurality of voices in domestic political economic governance – it seems to me entirely compatible with my account.

To the extent that Keynesian reason is, as I have said, an historically consistent if differentiated response to the contradictions inherent in liberal capitalism, it is always an effort to reconstruct an us. It is, I suppose, one of the main forms the ‘counter-market’ half of Polanyi’s double-movement takes. To go on to say Keynes is our Hegel, however, might appear (as Sheppard says) a somewhat more ‘provincial’ proposition, insofar as it implies a particularly limited spatial and theoretical–political imaginary. This is undeniable.

What Sheppard does not emphasize, however, is that it also is an attempt to enlist the analysis and the reader in a broadly Marxian project. That project might be Eurocentric in origin, and certainly has significant problems and limits, but it is not nearly so narrowly confined to a ‘European territorial imaginary’ as Marx or Keynes themselves were. Indeed, the Marxist project has arguably been most brilliantly developed in and by precisely those accounts Sheppard rightly celebrates for disrupting that historical and geographical imaginary (e.g. C. L. R. James or Aimé Césaire). While I probably should not assume this specifically Marxian common ground as readily as I have (this is admittedly what I had in mind), Marxian politics and political economy are not essential to the proposition. To the extent that one sees part of the task of social science as to carry on Marx’s critical work, if not necessarily in a Marxian manner, then a Hegel can give us a means through which to understand the truths of contemporary political economy, a figure through which to understand a very important way in which we make sense of the world.

The “we” implied by ‘our Hegel’ thus includes those who, by reading the piece, are (more or less unwillingly) enrolled in the critical task the paper attempts to initiate. That task is to understand a world in which Keynes often makes so much sense to so many, both in the North Atlantic and beyond (e.g. Bello, 2009; Heydarian, 2014). Listen to Prebisch (1947: 7):

To what should we attribute the influence of Keynes’ ideas, their capacity to unsettle? Neither solely to the brilliance of form nor to the dialectical force of their content. There is something more in his work. The system in which we live has, among others, one fundamental flaw: persistent unemployment which, exacerbated in periodic economic depressions, entails a perilous loss of forces of production, dragging down the masses’ standard of living. Keynes gives a very simple key with which to interpret this phenomenon. And he offer us, in addition, a solution which at this moment has the singular merit of compatibility with private initiative and personal liberty.

This is what I mean by saying Keynes is our Hegel. The point is to learn from Marx’s effort to capture an influential and enormously influential approach to history and the world via Hegel. His engagement with Hegel was not an effort to assess the merits of Hegel’s conception of the world. It was not even an attempt to explain Hegel’s ‘idealism’ as a kind of twisted refraction of the ‘true’ material world. Rather, his goal was to explain the dynamics of the ‘upside-down’ world of the consolidating bourgeoisie, a world in which Hegel’s ideas were neither symptom nor disease but were actually true (Colletti, 1973: 278). If so, Keynes is, it seems to me, our best Hegel, or one of the best. Partly because he unwittingly recapitulates much of Hegel’s political and economic analysis in a structurally similar immanent critique of liberal capitalism (Mann, 2015), and partly because Keynes, like Hegel, offers a frank, anti-nostalgic, but ultimately hopeful critique that, for all its sophistication, was and continues to be enormously influential, in the Euro-American context especially (but not only). But more than anything because Keynesian reason’s pragmatic conflation of empirical and performative truth – Keynes put expectations at the heart of modern political economy – captures the essence of liberal capitalism’s constitutive deferral.

Wolfgang Streeck (2014) has taken a comprehensive look at this deferral – he calls it ‘buying time’ – but he identifies the process specifically with the neo-liberal era, post-Bretton Woods. I would suggest that instead, buying time is to a significant extent all liberal capitalism has ever done, at least since the French Revolution. I refuse the common tendency to use the word ‘reform’ or ‘reformism’ to describe this stance, because while it certainly describes a common dynamic in liberalism, in itself the concept is substantively empty. It is neutral as to political aims, ideology or institutional organization. All it assumes is that they are reasonably fixed; whatever the politics, so long as one remains within its own self-determined limits, any adjustment is reformist. Its ideological ‘mass’, as it were, is nil. This is why the standard International Monetary Fund term for its required capital-friendly policy conditions is ‘reforms’, while some on the left still accuse insufficiently radical others of “reformism”. The term can do all these work precisely because it says so little. If reaction and revolution are indeed moments in a dialectic, reform can tell us very little about its development. I think this is partly what Schoenberger is getting at when she notes her simultaneous faith and suspicion of deep democracy.

The political path obscured or oversimplified by this oppositional framing – the Hegelian or Keynesian path – is definitively not ‘reformist’. It is an immanent critique of both liberalism and radicalism at the same time. This path, a dialectical, or quasi-dialectical development, drops out of view when we parse history into reaction, revolution and their mediation via reform. If a dialectical sensibility is any help here, it is not via an analysis of some supposedly ‘synthetic’ reformism. Instead, it is via its capacity to at least remind us of a political path that, however, successfully or unsuccessfully, attempts to overcome the opposition with which the revolution leaves us (‘sublation’, as Hegel’s aufgehoben is often translated): bourgeois Stability versus radical Terror and Truth, roll back the revolution or follow it through to the bloody end. If both these paths are genetically infra-revolutionary, that is, arise immanent to the revolutionary dynamic, the critique that embodies their dialectical outcome is necessarily post-revolutionary. It is only conceivable retrospectively, once the revolutionary terrain has been mapped by history.

This is the Keynesian vista, and from it both original paths appear doomed. On the radical side, the legacy of the Terror seems to delegitimize every way forward. Who in their right minds would put ‘trust in the people’’ after that? On the reactionary side, inequality and endless accumulation constantly threaten the social fabric and lead to nothing but the chaos and disorder in which radicalism thrives. From within the revolution, it seems the way forward leads to Stalin, the way back to feudalism.

The alternative that Keynesianism posits to escape this trap becomes visible to those for whom this vista enables what they take to be an understanding of the world as it ‘actually’ is. Their eyes are not clouded by radicalism, liberalism or conservatism. They see through the flimsy historical foundations of a meritocracy of the victors. They recognize the modern community’s ‘arbitrary and inequitable distribution of wealth and incomes’ (Keynes, 1971–1990: 7, 372). They accept the historical and political legitimacy of both reaction and revolution and suggest that in a bourgeois order, their supersession – to repeat, not a compromise – lights the only possible route to what Robespierre (1952: 7, 164–165) called ‘honourable poverty’. Honourable poverty is the peak of a development that liberalism and radicalism together make possible, and Keynesianism is the political project to isolate that instant, to defy the gravity of uncertainty, fear and ideology in a political economy that does not have to fall to earth. It is an effort to shorten the temporal units of history and thus deny the effective force of the long run. It refuses the radical belief that civilization is compatible with equality – and thus rejects the idea that one can rid a civilized world of poverty – but unlike liberalism, it holds out the promise of a poverty by which the poor are not dishonoured.

This prospect hinges on the categorical rejection of a fundamental tenet of liberal cosmology – the principle of scarcity. The legitimacy of revolution is founded, as Robespierre and Keynes said, in the fact that scarcity is neither ‘inevitable’ nor ‘natural’. It is socially produced, and, as such, it is both morally indefensible and politically disastrous. For the Keynesian, of course, this is not an endorsement of radical redistribution. Far from it. But it is a refusal of the liberal proposition that a necessary corollary of meritocracy is the threat of starvation. Keynes would have agreed wholeheartedly with Robespierre (1958: Ch. 9: 111) that if free trade requires ‘bayonets to calm fears or appease hunger’, then something is terribly wrong:

If capitalist society rejects a more equal distribution of incomes and the forces of banking and finance succeed in maintaining the rate of interest somewhere near the figure which ruled on the average during the nineteenth century (which was, by the way, a little lower than the rate of interest which rules today), then a chronic tendency towards the underemployment of resources must in the end sap and destroy that form of society. (Keynes 1971–1990: 14, 132)

The possibility of honourable poverty – one in which having less, perhaps even nothing, still carries the dignity of citizenship – thus demands an attack on scarcity, in the interests of a social stability in which all have an interest. But it is not merely that ‘we’ have a selfish interest in ‘their’ subsistence. Rather, the concept of an honourable poverty assumes what Robespierre also knew: that it is not true that ‘the people’ have ‘nothing to lose’:

‘The people of whom you speak are apparently men who somehow live, who survive in society without the means to live and survive. Yet if they are provided with those means they have, it seems to me, something to lose or preserve. (1952: 7, 164)

If the liberalism of the classical era – epitomized by Keynes’ theoretical nemesis Ricardo – dismisses this possibility, it dismisses honourable poverty as well. Keynesianism, in contrast, is constituted in part in an effort to carve out a space for it, a space liberalism denies it. In this sense, at least, it is genuinely more hopeful and utopian than the radical left understands.

However, if Keynesianism is an immanent critique of liberalism’s understanding of scarcity, it is also of course a critique of the revolutionary imperative to trust in the people. No Keynesian, Keynes included, trusts in the people on principle. The people themselves, in their ignorance, bitterness and despair – however justifiable – are their own (and everyone’s) worst enemy. Keynesianism adopts without question the liberal perspective that civilization is an elite bourgeois project. This is why an illiberal honourable poverty is so essential to the Keynesian program. It is also why Keynesianism is a pragmatic, and distinctively post-revolutionary, politics and political economy. It is only possible after the revolution, since it is a product of neither one ‘side’ or the other but of an analysis of the failures of both. It aims to sit on the knife edge at which Thermidor rolled one way and Robespierre the other. Faith in Keynesian reason thus seems to me proportional to one’s belief that this balancing act is possible, or the belief that there is nothing else to hope for. In those moments when Keynesianism makes sense to me, it appeals to my pessimism of the intellect. I continue to refuse it in the expectation that an optimism of the will can and will ground a different intellect, admitting (with Marx) that I may not know it when we get there, but trusting others, braver and wiser and probably younger than I, to help me understand it when we do.