Anonymous Flattery: Keynes

Commenting on my Bruce Bartlett post, Anonymous asks:

Can you recommend a book on Keynesian economics suitable for an adult with a financial services background and an MBA? I want something more detailed than a "Dummy's Guide to" but not something that will cause me to research lots of things to understand each chapter (It's been 20+ years since MBA school and I barely remember the Black & Sholes option pricing model....)

Ha! That's one of those questions usually asked of people far above my pay grade, but let me give it a thought. I suppose a simple answer is that the Bartlett book itself, on Keynes (unlike supply side) is actually quite wonderful--deft and accessible without great sacrifice of technical content.

The next point would be to stress that Keynes himself never intended to be that-all technical. It was his "friends" (from which heaven save me) who dressed it up iin the full regalia of academic geometry. Beyond that--if you are ready for a bit more technicality, I suspect you might be pleasantly surprised at how accessible the average textbook has become since your time in school (a triumph of the free market?). And needless to say, no reason at all the plunk down the big bux for a new edition--on this topic as with so many others, a used second hand, available for pocket change at Amazon, etc., will suit you just fine. Example: I don't have a macro text at hand at the moment but I find a perfectly readable presentation in my copy of Frederic S. Mishkin, The Economics of Money, Banking and Financial Markets (8th ed.)--which as it happens, I picked up used on Amazon myself.

Beyond that, there re few academic biographies more filled with the sinew of life than Robert Skidelsky's three-volume product on Keynes--true not least because Keynes himself was so full of the sinew of life (there is also an abridgment available). Skidelsky has a new single volume work out with the title Keynes: The Return of the Master, which sounds suspicioiusly like a quicky designed to capitalize on the current resurgence (haven't read it; sounds promising, but note the negative Amazon reviews).

What Marx Said, Or Did Not Say, or Maybe He Did

My friend Ignoto shipped me the quote that follows, reporting with a chortle that he intended to send it on to a moonbat conservative of our mutual acquaintance:

Owners of capital will stimulate the working class to buy more and more expensive goods, houses and technology, pushing them to take more and more expensive credits, until their debt becomes unbearable. The unpaid debt will lead to bankruptcy of banks, which will have to be saved by the government and nationalized; the State will have to take the road which will eventually lead to communism.

--Karl Marx, 1867

Hm, doesn't sound right. Working class buy goods? In 1867? Houses? Technology. Criminentlies.

A moment's Googling made it clear that this one has gone viral, usually with uncritical acceptance. There are a few skeptics, and in particular this pretty good take-down from Megan McAradle, whose integrity is put in doubt only by her claim to have read all three volumes of the master's masterwork.

But scroll down to the comment of one James Heartfield, hitherto unknown to me, who offers up this totally non-bogus bit of Marx:

"A larger part of their own surplus product, always increasing and continually transformed into additional capital, comes back to them in the shape of means of payment, so that they can extend the circle of their enjoyments; can make some additions to their consumption funds of clothes, furniture, &c., and can lay by a small reserve-funds of money. But just as little as better clothing, food, and treatment, and a larger peculium, do away with the exploitation of the slave, so little do they set aside that of the worker. A rise in the price of labour, as a consequence of accumulation of capital, only means in fact, that the length and weight of the golden chain the wage-worker has already forged for himself, allow of a relaxation of the tension of it." [Das Kapital] Chapter 25, p 579-580, Lawrence and Wishart edition.

So I'd say he--the anonymous mischief-maker--had it just about right. Just a free translation.

Afterthought: Puts me in mind of an insight I picked up from--I'm not sure, could be Hyman Minsky--about Keynes in the great depression. Minsky (?) points out that the standard conservative mantra about the great depression was that there was nothing you could do about it except suck it up, cross your legs and think of England. And the Marxists believed essentially the same thing: they believed that capitalism was unstable, not just by accident, but inherently and inevitably. Hence the Marxists believed, like their conservative brethren, that you might as well just tough it out.

Keynes (at least via Minsky) does seem to have shared the Marxist belief that instability in capitalism was substance, not acciddent. But he believed is was worthy trying to do something about it. In this he differed from conservatives and Marxists alike.

Update: Don't miss Tom's (Doug Henwood's) (Marx's) contribution in the comments.

Deep Thought: Keynes

Everybody is adding John Maynard Keynes these days as a Facebook friend.

[See,e.g., link, link, link, and of course link, etc.]

Update: I thought I was joking (link).