Saturday, March 12, 2016

Blaug: Keynesian Biographies.


Reviews, whether of fiction or non-fiction, almost by necessity are more boring than the work reviewed. Take a film: whether it was good or not, directors had at their disposal all the resources of a studio. Reviewers have their written words, only.

Based on that, one could expect less from Mark Blaug's 1994 12-page long joint review of Donald E. Moggridge's "Maynard Keynes: An Economist's Biography" and Robert Skidelsky's "John Maynard Keynes" (volumes 1 and 2): the two leading academic biographies of Keynes.

Without being a thriller, Blaug's review is anything but boring.



Blaug, probably 20th century's preeminent historian of economic thought, has a knack for presenting both sides of a debate, seemingly remaining non-commital, while giving readers cues to his own position.

He does just that with the question "is it really true that a knowledge of the lives of the great economists adds anything to our understanding of their economic ideas?" Blaug notes the contending positions: Patricia Jaffe (answer: Yes) vs George Stigler, following Karl Popper (answer: No).

Here one could add to Blaug's text: the No-party sees scientific discovery as a matter of Great Men (usually men) struggling heroically to birth Great Ideas, whatever their environments. It's a rather romantic conception, one Keynes shared with Stigler and Popper.

Blaug, however, sides with Jaffe:
"If we want to explain the Keynesian Revolution, the astonishing speed with which Keynesian economics won professional approval, it would be difficult to deny that Keynes's personal biography [and personality, I'd add] was extremely relevant."
A little later, Blaug wonders about Keynes' conversion from the monetarism-before-Friedman of "A Tract on Monetary Reform" (1923) and "A Treatise on Money" (1930), to the fiscalism of "The General Theory" (1936), which moderns identify with Keynes' name.

Where did all those new ideas going into "the Making of The General Theory" come from?

The prevalent theory is that Keynes got them basically by his lonesome self, taking very little from other, older, authors. Keynes himself contributed mightily to that perception.

Skidelsky and Moggridge, representing that position -- adds Blaug -- wrote that Keynes expressed his views the way he did by reading Malthus. Blaug:
"[W]hat Keynes took from Malthus was a name for a new concept -- effective demand -- in the effort to invent a pedigree for his own ideas."
This may sound like a startling suggestion, which almost beggars belief.

Blaug, nevertheless, notes the other side of the discussion:
"However, Steve Kates (1994) has argued that the influence of Malthus on The General Theory extended beyond language to matters of substance."
More precisely, Kates argued back in 1994 that -- one reads in that reference -- Keynes owed Malthus a lot more than language:
"It therefore seems highly probable that it was because Keynes read Malthus' letters to Ricardo in late 1932 that he eventually focused on effective demand in the General Theory. Because of his reading of Malthus, Keynes attacked Say's Law..."
If one believes Kates, it seems Keynes wasn't particularly generous giving credits (nor excessively thorough in his bibliographical research, as Friedrich Hayek said). (As an aside, Kates has since written extensively on this and we might have further to comment).

Blaug, without siding openly with Kates, adds suggestively:
"Be that as it may, the strongest evidence that reading Malthus indeed left a mark on Keynes's thinking is the fact that Keynes attached so much importance to Say's Law, which he alleged was held by virtually all economists before him. Yet he could find no examples of that belief other than John Stuart Mill's Principles and Marshall's Economics of Industry."
One is left wondering whether Keynes' omnipresent "Say's Law" was indeed so ubiquitous.

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One cannot do justice to Blaug's review in a no-longer so short post. Next time we'll see him dealing with a central problem of Keynesianism: what did Keynes really mean? Along the way, he'll have something to say about Keynesian historiography.


References:

Blaug, Mark. 1994. Recent Biographies of Keynes. Journal of Economic Literature. Vol 32, pp. 1204-1215. (paywalled, unfortunately)

Kates, Steve. 1994. The Malthusian Origins of the General Theory: or How Keynes Came to Write a Book about Say's Law and Effective Demand. History of Economics Review, Vol. 21, pp. 10-20. (freely available)

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