Saturday, January 23, 2016

Coyle on Minsky, Where's Keynes?


Diane Coyle (part-time professor of Economics at the University of Manchester, plus a long CV) is a high-profile British Keynesian economist. She posted recently a favourable review of L. Randall Wray's latest book "Why Minsky Matters". Wray, as readers know, is a leading MMT proponent and an expert on Minsky.



I have nothing to object to Coyle's review (the theme of her post).

Beyond her review, Coyle manifests her admiration for Keynes (ritual among Keynesian economists, it seems) and laments that some "Keynesians" (her quote marks) bowdlerised the Master. But I will not comment on that, either.

Reading her post, however, this paragraph caught my attention:
"Debates about what Keynes 'really' meant in The General Theory are not all that interesting - and by the by a good reason for emphasising the importance of maths as well as words in economics. The mathematical notation is a way of enforcing logical consistency and expressing arguments with precision; the words can then explain more clearly, and introduce reality while keeping it rooted in logic and clarity."
Personally, I find nothing unacceptable there; and -- for what it might be worth -- I agree with Coyle: mathematics is a way of enforcing logical consistency.

To put things differently: mathematics is a servant to logic. One can, if one must, be logical without being mathematical, but one can't be mathematical without being logical. By demanding mathematics one demands logic. And it's a lot easier being logical using maths, than being logical using only words.

Mind you, maths alone won't make any theory "scientific": a theory can be logically consistent and useless. A theory, however, cannot be useful and inconsistent.

To sum up: Coyle is pleading for logical consistency, not maths for maths' sake. Isn't that both reasonable to ask and evident in Coyle's writing?

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My interest in that paragraph was justified by the facts.

Enter Geoff Tily (Honorary Research Fellow, City Political Economy Research Centre). In a polite and civil reply to Coyle, Tily nevertheless is unhappy with the treatment Coyle gave Keynes ("my plea is that Coyle reconsiders her attitude to Keynes himself").

I won't comment on that, either. Interested readers may judge whether Coyle demonstrated sufficient deference, appreciation, or whatever to Keynes (hint: follow the link and read her text before judging).

What I want to highlight in Tily's response is this:
"It is inconsistent to recognise Wray's argument, but then reject Keynes on the grounds that he cannot be expressed in mathematical terms. I haven't read Wray's book, but the post-Keynesian position is that Keynes cannot be interpreted in mathematical terms (or more precisely as a set of simultaneous equations)."
Having read and re-read Coyle's post, I don't think she rejected "Keynes on the grounds that he cannot be expressed in mathematical terms" as Tily writes, or on any other grounds, for that matter. For good or for ill, Coyle is no apostate.

Perhaps Tily misunderstood Coyle, the reader may say.

Probably. That kind of thing happens. But this apparent misunderstanding only demonstrates the risks in literary communication, which Tily -- however -- demands as the only way to read the words of the Master.

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There is, however, something more important in that passage and I'll repeat it here for emphasis: "the post-Keynesian position is that Keynes cannot be interpreted in mathematical terms".

Perhaps that was just an off-the-cuff remark, expressed without proper consideration. Maybe the statement is too general and some post-Keynesians will not share it. But if that is true (and the stubborn maths-phobia among some post-Keynesians seems to confirm it), the problem post-Keynesians often have with mathematical economics is not due to microfoundations, as they like to claim. Microfoundations is just a target of opportunity, an obviously bad idea which they then conflate with maths in economics.

Microfoundations, however, are not the only use of maths in economics.

If that statement is true to post-Keynesian methodology, the beef post-Keynesians have is with maths, tout court.

Or, to put it this way: it's not that Coyle wants maths for maths' sake, it's that Tily rejects any maths.

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Faced with post-Keynesian criticism, Paul Krugman -- probably the world's highest-profile Keynesian, with or without quote marks -- eventually admitted in public that "Keynes said a lot of things, not all consistent with each other". An admission like that may be a bridge too far for most post-Keynesians (as suggested by their fondness to quote from Keynes).

You see, maths is a servant to logic.

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Coyle replied to Tily.

3 comments:

  1. Post Keynesians put greater stock in the word of a gentleman - a Cambridge gentleman - than logic. A gentleman who believes himself to be idealistic, disinterested and, above all, perfectly sensible.

    As you can probably guess, I've just been reading your link to Keynes on national self-sufficiency. Funny stuff. :-)

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    1. "Post Keynesians put greater stock in the word of a gentleman - a Cambridge gentleman - than logic. A gentleman who believes himself to be idealistic, disinterested and, above all, perfectly sensible.

      I'm sorry, Pete, but that falls short of reality.

      Let's compare your description of Keynes' self portrait, with the Master, through the eyes of his followers.

      Believe it or not, the two following passages are real and were written by educated adults. One of them is a scholar. I shall not reveal their identities.

      "I am spellbound. This is the most beautiful creature I have ever listened to. Does he belong to our species? Or is he from some other order? There is something mythic and fabulous about him. I sense in him something massive and sphinx like, and yet also a hint of wings."

      "Keynes, who besides being one of the most intelligent people of the 20th century was also so ferociously logical (and these two qualities do not necessarily overlap) that he was almost certainly incapable of making a logical mistake or of forgetting accounting identities."

      Personally, I refuse to qualify that. Suffice it to say, if I were Keynes, I would be embarrassed. Hell, I am not, and still I feel embarrassed.

      The thing is these may be extreme cases, but this phenomenon is not uncommon.

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    2. Magpie, your treasure trove of awesome quotes is seemingly bottomless. :-)

      And yet Marxists are supposedly the idolaters?

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