You Should Read Keynes

‘‘There are no friends…only interest.’’ Emirati billionaire Khalaf Ahmad Al Habtoor came to this sober realization after the American-Israeli offensive in Iran subjected Gulf states to drone strikes, thereby fracturing the trust which Arab leaders had spent decades nurturing with the American government and its defense industry. 

The role of both private and public interest in shaping global politics has been the focus of intense study in the social sciences. In The Passions and the Interests, economist Albert O. Hirschman saw the triumph of capitalism in early modern Europe and elsewhere as the culmination of a concerted effort by eminent philosophers and politicians to convert the selfish ambitions of human beings into socially beneficial exertions. Rather than suppressing or destroying the dangerous proclivities of the human heart, the leading thinkers of the age of enlightened commerce seized upon the idea of ‘‘harnessing the passions’’ of the most outstanding members of society for the benefit of mankind (The Passions and the Interests, p. 16). 

During the Great Depression, this liberal stratagem received its most timely endorsement from John Maynard Keynes, arguably the most brilliant economist working to build the Atlantic alliance. In his General Theory of Employment, Interest, and Money, published in 1936, Keynes argued that there is good reason to believe that, ‘‘Dangerous human proclivities can be canalized into comparatively harmless channels by the existence of opportunity for money-making and private wealth, which, if they cannot be satisfied in this way, may find their outlet in cruelty, the reckless pursuit of personal power and authority, and other forms of self-aggrandizement.’’ Given the prospect of all-out war, it is ‘‘better that a man should tyrannize over his bank balance than over his fellow-citizens.’’ Whilst ‘‘the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative,’’(The Passions and the Interests, p. 134).

Here, Hirschman observed, was ‘‘the old idea of money-making as an ‘innocent’ pastime,’’ an ‘‘outlet for men’s energies,’’ an ‘‘instruction that diverts men from the antagonistic competition for power’’ and towards ‘‘the somewhat ridiculous and distasteful, but essentially harmless accumulation of wealth’’ (The Passions and the Interests, p. 134). As the late Robert Skidelsky makes clear in his last and final book, Keynes for Our Times, Keynes’s view of the role of money in society was far more interesting than perhaps that assessment would allow. Keynes certainly agreed with the worldly philosophers of old that financial preoccupation could have a pacifying effect on the public, but this soothing concession to the moral power of economics was no endorsement of crude profiteering. 

For one, while Keynes describes ‘‘the opportunity for money-making and private wealth’’ as ‘‘comparatively harmless,’’ he did not regard money-making as such to be free of danger. Though not a theologian by training or confession, Keynes nonetheless shared the characteristically Christian apprehension about money as a conduit of vice. Keynes described ‘‘the love of money’’ and the ‘‘habitual appeal to the money motive’’ as ‘‘the moral problem of our age’’ (quoted in Keynes for Our Times, p. 75). He regarded the tendency to hoard money as a ‘‘somewhat disgusting morbidity…which one hands over with a shudder to specialists in mental disease’’ (ibid., p. 93).

The fact that this social malady was allowed to spread unimpeded throughout the body politic was a powerful testament to the extreme humiliation of religion in post-Victorian society. One can tell that the ‘‘decaying religions around us…have lost their moral significance,’’ Keynes noted, by the fact that modern financial capitalism, an ‘‘absolutely unreligious congeries of possessors and pursuers,’’ without ‘‘much public spirit,’’ was the dominant ideology of the age (ibid., pp. 74–75). Keynes had high hopes that in the long term, as society reached its promise of material superabundance and mass leisure, the public would regain confidence in those ‘‘sure and certain principles of religion and traditional virtue,’’ which dispensed with any need to build unnatural affections for money. Instead of the fetishization of money, and the even more puzzling idolization of economic growth for its own sake, liberated humanity would see no need to ‘‘satisfy the Adam in us.’’ In Keynes’s utopia, citizens of the free world eventually abandon the learned skimpiness which they inherited from their ascetic, scarcity-minded ancestors, and reacquaint themselves with the value of ‘‘today over tomorrow, ends over means, the good over the useful,’’ and the pleasures of living like ‘‘lilies in the field’’ (ibid., p. 93). 

In the meantime, money-making and its less-than-ideal moral and social symptoms must be managed by politicians and public leaders to avoid the social disturbances which give rise to revolutions. Keynes saw the interwar period, with its terrible suffering, violence, and illiberal politics, as a highly combustible historical moment. Liberal civilization increasingly seemed to him ‘‘a thin and precarious crust erected by the personality and the will of a few, and only maintained by rules and conventions skillfully put across and guilefully preserved.’’ Beneath these liberal norms and conventions were ‘‘insane and irrational springs of wickedness,’’ waiting to burst forth at the earliest sign of political breakdown (ibid., p. 19). It was knowledge of this fragile state of affairs—one where poor management of ‘‘dangerous human proclivities’’ can easily give way to social anarchy and the explosion of illiberal forces—which motivated the claim that it is better on balance that a man ‘‘should tyrannize over his bank balance’’ than over his fellow citizens. That was not an ideal state, nor one which Keynes hoped would remain the status quo forever, but it was the best one could do in this vale of tears. 

Keynes did not deny that a preoccupation with one’s checkbook could, and often did, lead to all sorts of evils and unkindness of one man to another. What he insisted on is that the emergence of an intensely commercial culture can—sometimes, at least—be a welcome alternative to violence, and in the most blessed cases even supplant a culture of constant warring. Critics of this hopeful liberal theory warn that there is scant evidence that such pacification, even if observable in some historical contexts and periods, is sufficiently enduring to warrant a high level of trust in the beneficence of the market. In his Anger, Fear, Domination, William A. Galston faults liberal thinkers for failing to recognize that human nature, especially the attraction to evil and the pleasure of domination, rather than just the social system or environment, is the chief reason why wars keep on happening. Peace should not be assumed. As Galston warns, ‘‘Never again,’’ is a ‘‘commitment, not a guarantee’’ (Anger, Fear, Domination, p. 22).

While Keynes did have a utopian streak, Skidelsky’s book makes clear that Keynes was far from unaware of the viciousness of human nature and the price that must be paid to secure peace. Keynes may have discarded some residues of his family’s ancestral Christian faith (his maternal grandfather was a nonconformist preacher), but he never lost a religious outlook on life. A moral severity comes through in his criticism of the corrupting power of money and avarice. Even when putting forward his vision of the ideal society, Keynes recognized that no amount of money could solve the perennial question of value and meaning in life. Human beings may overcome the economic problem(s) of the human species, but the question of meaning and existential satisfaction will remain ‘‘the permanent problem of the human race.’’ Large sections of humanity may attain hitherto unfathomable wealth and prosperity, but that in itself will not teach them how ‘‘to live wisely and agreeably and well,’’ (Keynes for Our Times, p. 138). 

The economic situation today is much improved, but not without danger. There remains no realistic alternative to the system of financial capitalism and its commitment to economic growth. The permanent problem of how to live well is also still very much in play, inviting a growing constellation of illiberal forces to venture a fix. Liberals, on the other hand, remain the guardians of civilization: tweaking this or that aspect of the economic and political system in hopes of keeping the forces of reaction at bay. The trajectory of politics following the Great Depression is a good reminder to stay attuned to the changes in our political economy, and to examine the character of the proposals being put forward to solve the existing troubles of our age. Keynes was a liberal for our age: morally serious, hopeful for a better future, and yet reconciled to the expertly-executed compromises that must be struck to preserve a liberal order that is far more fragile than some would like to believe. 

Keynes would likely have looked disapprovingly at the recklessness which now characterizes modern politics. Keynes viewed ‘‘claims of peace’’ as paramount to the thinking of any good statesman. Given the limits of our knowledge and the complexity of the world before us, it is the duty of every responsible politician to approach the topic of war ‘‘with much prudence, reverence, and calculation’’ (Keynes for Our Times, p. 18). Those are qualities deeply lacking in American foreign policy circles today. The chief executive, in particular, has shown himself to be thoughtlessly bellicose in his pursuit of a war in Iran. Hal Brands notes that at his core, ‘‘Trump is an anti-strategic actor. He shuns deliberate planning and decision-making. He doesn’t consider tradeoffs systematically or plot out complicated maneuvers several steps in advance.’’ Rather, ‘‘Trump follows his instincts.’’ This foreign policy by microbiome simply won’t do in a dangerous world such as ours. As Keynes wrote in the New Statesman a few years before the outbreak of the Second World War, ‘‘It is our duty to prolong peace, hour by hour, day by day, for as long as we can,’’ not to introduce needless disorder in an age of uncertainties. 

Featured image is "Portrait of John Maynard Keynes sitting down while holding a book," author unknown, 1929.