Saturday, December 13, 2008

Appreciation: Martin Wolf and John Maynard Keynes

I've spent some profitable hours with Martin Wolf, Fixing Global Finance, but it is Martin's good fortune that I was struggling with him while trying also to cope with Tyler Cowen's book-club reading of Keynes' General Theory. It's an irony that Keynes, who won so much recognition as an essayist and pamphleteer, produced a "big book" that makes the finals in the all-time impenetrability sweepstakes: by comparison, Wolf is merely abstruse.

At the end of the day, I don't suppose Keynes' General Theory is quite as impossible as Hegel's Phenomenology (and, in the end, I suspect not as important). But it's fit to appear in the same company, and perhaps in part for the same reasons. Here are two: one, both Keynes and Hegel are taking part in conversations that are pretty well lost to us know--hard to guess (or to believe) that so much of that seeming jargon in Hegel was part of the parlance of his time, at least in some circles. So also with Keynes, and with Keynes there is a more insidious problem. That is: he seems to be talking the language of an economics that we recognize, but he's not, really. A lot has happened since 1937 and so much of what we think we ought to understand turns out to be obscured by subtle shifts of meaning. So we are almost as lost as we are in the swamp of German idealism.

The other is that Keynes and Hegel have a maddening habit of arguing with learned predecessors while (a) not telling you who those predecessors are; nor (b) exactly what the argument is about; nor (c) indeed, that there is an argument at all. Here's one huge reason why, with either of them, you really can't expect to do it on your own. For guidance with Hegel, there are a number of good choices (here's a favorite). For Keynes there are, surprisingly, fewer. There is some useful stuff in the Robert Skidelsky biography, particularly volume two. There stuff from his acolytes in the literature of economics itself but nothing that I know of by way of patient chapter-by-chaptere exposition. Which would be why the efforts of Tyler and his commentators are so much to be appreciated.

The Wolf book is a more puzzling item. No one claims that Martin Wolf is John Maynard Keynes, but Wolf is certainly a splendid journalist-on-economics: on big-picture macro, maybe his only current competitor is Greg Ip. Fixing Global Finance exhibits his technical skill and also his knack for explaining, but in an odd way: page by page, Wolf makes his points clearly, without jargon and with precision. But it's still a take-no-prisoners book. Wolf may do a good job of explaining the dimensions of global trade imbalances, and of assessing their possible implications. But he isn't going to lift a finger to remind you why it matters, or exactly how they happen. For a serioius economist (not me) I suspect this is pretty easy going. For a patient and attentive observer (I think that would be me), it all takes, well, patience.

Also: when all is said and done it is actually pretty anodyne. Yes, the evidence is equivocal, but yes, there are trade imbalances and no, nobody quite understands why, an[d yes, it's probably best to do something about them, and by the way, do something drastic with the International Monetary Fund. That is useful, but it's hardly enough to make you toss your hat in the air.

And there is a final problem, certianly not of Wolf's own making--the fact that he has been swamped, drowned, rendered almost voiceless by events. This isn't an old book at all--Wolf was writing after Northern Rock--but so much has swept over is since that his comp copies might as well have been swept off by the flood

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