Speaking of Keynesians

I'm reading Robert Skidelsky's The Return of the Master, and boy, does he get up to some awesome chicanery in chapter five. Arguing that the "golden age" of Keynesianism produced better results than Chicago School "Washington Consensus," Skidelsky musters a fairly impressive set of graphs and data that completely fail to prove his point.

Why? You know how back in the 1970s the whole Keynesian edifice came crashing down, with double-digit inflation, high unemployment and sluggish economic growth? For reasons he doesn't make entirely clear, Skidelsky completely leaves those years out of his account of the performance of Golden Age Keynesianism. The closest he comes is arguing that right before the wheels came off, Keynesian planners in Washington had abandoned the true religion, although he doesn't say exactly how.

What's worse, he doesn't address at all- not glancingly, not evasively- the stupidly obvious possibility that maybe all that terrific growth from 1945 to 1973 was a result of the fact that the world had spent 1914 to 1945 tearing itself apart, with a brief intermission to have an economic collapse. Skidelsky proudly points to tremendous growth in France, Germany and Japan as evidence of his thesis, completely ignoring the possibility that it's easy to have "growth" when you are starting from charred rubble.

I'm not a trained economist. I'm a trained nurse. But I fancy myself a fairly literate fellow, and I try to keep an open mind. Reading economics, I'm not repelled by the vaunted 'difficulty,' because it's not that hard, nor do I find the subject boring- I actually find it fascinating. What does drive me nuts is every economic school's determination to ignore all data that doesn't fit their model. Did your economic plan blow up the world back in the 1970s? Just leave those years out of your analysis. Does your model only work if everyone has a job? Just pretend everyone has a job. This sort of foolishness wouldn't last ten seconds in any other discipline with which I am familiar, and I was a liberal arts major- I know about academic foolishness.

In chapter six, Skidelsky starts talking about Keynes's moral vision, and how he saw capitalism as flawed because it was based on greed. People get this wrong all the time. A free market isn't based on greed. It's based on the observable reality that people are greedy, that is to say, that they generally want more than they have. There's nothing in the ideal of the free market that mandates that anyone live only for money. In Libertopia you can have whatever values you want, aspire to whatever goals warm your little heart, so long as you follow the Buddha's admonition not to take that which is not given.

I'm being critical here but it is a good book, and a slender one, so pick it up if you have an interest in reading a well-written account of what Keynes actually thought.