Keynes 1933.
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Duluth, Minnesota (OpEdNews) April 11, 2021: The young American journalist Zachary D. Carter completed the manuscript of his 650-page 2020 book The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes (New York: Random House) before the Covid-19 worldwide pandemic emerged in 2020. Whatever else may be said about Carter, he loves storytelling and explaining economic thought.
Now, the economic impact of the pandemic in the United States prompted large-scale government money dispersals, driving up the deficit. Under the Republican President Donald J. Trump and more recently under the Democratic President Joseph R. Biden, Jr., the American government has engaged in remarkable government deficit spending - the kind of deficit spending that the Democratic President Franklin D. Roosevelt (1882-1945) pioneered during the darkness of the Great Depression, after the Wall Street crash of 1929 - on the advice of the English economist John Maynard Keynes (1883-1946). For better or worse, FDR put Keynesian economics on the political map.
But FDR's famous Four Freedoms that he articulated in his 1941 State of the Union Address were far more visionary than Keynes' vision of the good life for people in a democracy. Carter says, "The first is freedom of speech and expression - everywhere in the world. The second is freedom of every person to worship God in his [or her] own way - everywhere in the world. The third is freedom from want - which, translated into world terms, means economic understandings which will secure to every nation a healthy peacetime life for its inhabitants - everywhere in the world. The fourth is freedom from fear - which, translated into world terms, means a worldwide reduction in armaments to such a point and in such a thorough fashion that ne nation will be in a position to commit an act of physical aggression against any neighbor - anywhere in the world" (page 312).
As Carter mildly says, "Keynes lacked FDR's Christian sense of principle" (page 313).
What Carter here refers to as "FDR's Christian sense of principle" was expressed in FDR's first inaugural address, which Carter quotes as follows: "'Plenty is at our doorstep, but a generous use of it languishes in the very sight of the supply,' Roosevelt said. 'Primarily this is because the rulers of the exchange of mankind's [sic] goods have failed, through their own stubbornness and their own incompetence, have admitted their failure, and abdicated. Practices of the unscrupulous money changers stand indicted in the court of public opinion, rejected by the hearts and minds of men [and women]. . . . They know only the rules of a generation of self-seekers. They have no vision, and when there is no vision, the people perish [see Proverbs 19:18]'" (page 230; ellipsis in Carter's text).
Carter also says, "Lest there be any doubt about who was responsible for the mess, the president continued: 'The money changers have fled from their high seats in the temple of our civilization. We may now restore that temple to the ancient truths. The measure of restoration lies in the extent to which we apply social values more noble than mere monetary profit.' It remains a radical idea today: the private profit motive cannot serve as the foundation of a prosperous economic order, whatever role it might play within such a system" (page 230).
The Democratic populist President Roosevelt was invoking the gospel passages in which Jesus is portrayed (in pantomime?) as cleansing the Temple of money changers (see John 2:13-16; Matthew 21:12-13). Because Keynes was an atheist, he could not readily invoke biblical passages to help sharpen his rhetorical arguments in his sharp political commentaries.
But FDR also explicitly invoked supposedly "ancient truths" and "social values" to restore "the temple of our [American] civilization." Keynes could relate to this aspect of FDR's manifesto.
According to Carter, "Keynes had fallen under the sway of the Irish philosopher [Edmund Burke (1729-1797)] during his undergraduate days [at Cambridge University], when he had won an essay contest for an eighty-page thesis on Burke's political theory. He agreed with Burke that governments were justified not by inalienable individual rights but by their results - their ability to achieve social stability and public happiness - and he shared with his predecessor a profound fear of social upheaval" (page 99).
Carter says, "In his [Burke's] 1790 masterpiece Reflections on the Revolution in France, the Irish philosopher had castigated the revolutionaries for attacking the foundations of the existing French social order. Whatever the philosophical merit their paeans to human rights and democracy might hold, Burke had predicted, their overthrow of the French monarchy would destroy the social bonds of custom and tradition that enable peaceful rule, empowering a 'popular general' who would make order out of chaos through violent repression. That militarism would do far more damage to the ideals the revolutionaries cherished than the old monarchy had. The subsequent Reign of Terror and Napoleon's early nineteenth-century rampages gave Burke's psychological analysis a certain historical sting. Keynes made his radical propositions in an effort to preserve what could be saved of the status quo, which he believed to be facing an existential threat" (pages 98-99).
According to Carter, in "[John Kenneth] Galbraith's first publishing hit, 1953's American Capitalism [page 180]," he accurately characterizes the 'enlightened [Burkean] conservatism' of Keynesian thinking" (page 409). Now, whatever else may be said about FDR's New Deal, which was radical for its time, it can also be aptly characterized as "enlightened [Burkean] conservatism" - it did not resemble the French Revolution.
Now, whatever else may be said ab out President Biden and Treasury Secretary Janet Yellen, they strike me as Democrats in the Democratic tradition of FDR, not as revolutionaries in the tradition of the French Revolution.
In conclusion, Carter has written an accessible book about economics that is in my estimate now more timely today in the Biden administration than it was when he completed it.
