A Man for All Seasons

When the economy goes south, one name invariably surfaces on the lips of pundits and economists: John Maynard Keynes. That is because the twentieth century’s greatest economist is generally associated with the idea that markets require government intervention in order to function properly. During boom times, when the market seems to be working, no one has any use for Keynes’s skepticism toward unrestrained capitalism. But, during recessions–when the economy grinds to a halt and Washington suddenly looks like the only thing that can save it–Keynes invariably enjoys a revival. The current economic crisis, our country’s worst since the Great Depression, is no exception. Everyone, it seems, has spent the past months rediscovering Keynes.

But the tendency only to turn to Keynes for technical advice in bad times doesn’t really do justice to his worldview. Keynes’s ideas were not just a prescription for an ailing economy; they were a complete theory of capitalism, one meant to be relevant in both good times and bad. They were also more than just an economic program; his ideas about capitalism–spelled out most thoroughly in his 1936 work, The General Theory of Employment, Interest, and Money–were developed in tandem with his political philosophy. Keynes saw each as bound up with the other. “The most pressing reforms which are economically sound do not, as perhaps they did in earlier days, point away from the ideal,” Keynes wrote in 1932. “On the contrary, they point toward it.” Keynes, in other words, was interested in more than manipulating the levers of policy to keep economies thriving. He was interested in how economics intersects with political questions of equality and fairness and justice.

This fall, the Bush administration and the incoming Obama administration have had to confront not just narrow technical questions about budget deficits, interest rates, tax cuts, and savings, but also broader political questions about the proper relationship between government and the economy. Without our realizing or anticipating it, the entire panoply of concerns that Keynes faced in the 1930s has come back to us. Turning to him for answers is therefore an understandable, and wise, move–but only if we treat his ideas as what they are: not quick-fix steps for a battered market but long-term principles for creating a functional and just economy.

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