Thursday, June 2, 2011

Anything We Can Do, We Can Afford

John Maynard Keynes, in a 1942 BBC address:
Let us not submit to the vile doctrine of the nineteenth century that every enterprise must justify itself in pounds, shillings and pence of cash income ... Why should we not add in every substantial city the dignity of an ancient university or a European capital ... an ample theater, a concert hall, a dance hall, a gallery, cafes, and so forth. Assuredly we can afford this and so much more. Anything we can actually do, we can afford. ... We are immeasurably richer than our predecessors. Is it not evident that some sophistry, some fallacy, governs our collective action if we are forced to be so much meaner than they in the embellishments of life? ...

Yet these must be only the trimmings on the more solid, urgent and necessary outgoings on housing the people, on reconstructing industry and transport and on replanning the environment of our daily life. Not only shall we come to possess these excellent things. With a big programme carried out at a regulated pace we can hope to keep employment good for many years to come. We shall, in fact, have built our New Jerusalem out of the labour which in our former vain folly we were keeping unused and unhappy in enforced idleness.
 (Collected Works XXVII)

Relevant today, obviously: Thirteen million people unemployed, 25 percent of industrial capacity idle, and capital, if the interest rate is any guide, more abundant than it's been in decades. If our masters were only interested in what's best for everyone, as they always claim, now would be the moment for new bridges, hospitals, subways, colleges, and public housing, and for parks, theaters, museums, and cafes. Not to mention wind farms. A recession isn't the time to trim sails and take short views, it's the time to go long. So let's build that New Jerusalem.


  1. I'm all for stimulus spending, but wind farms are a misguided waste of money. You get more than three times as much clean energy out of a dollar spent on nuclear power as you do out of a dollar spent on wind. Wind also uses ten times as much steel and concrete per kilowatt-hour generated as does nuclear. It has a much larger land footprint per kilowatt-hour, and requires much more land-gobbling infrastructure like service roads and long-distance transmission lines; all that means a lot of habitat destruction for very little usable energy generated. And wind needs natural gas plants to balance its chaotic output, so it can't eradicate fossil-fuel burning the way nuclear can.

    When you really study the issues, nuclear is clearly superior to any other energy source except hydro (which has scaling limitations and a larger eco-footprint).

  2. ...Oops! The punchline: a stimulus program should be structured around building lots of nukes, something Keynes would surely advocate if he were alive today, smart man that he was.

  3. I forget, doesn't fear have a carbon footprint???

    Alternatively, where Keynesianism and militarism find one another (once more)....

  4. I think you are right about the practical advantages of nuclear power -- altho I continue to think it's very important to support continued development of wind and other renewables as a Plan B, given the potential obstacles to a major expansion of nuclear power and the potential for technical breakthroughs with other sources.

    Of course this isn't really a post about energy; it's just calling attention to Keynes' view that there are no economic reasons why we can't assure everyone of a beautiful and fulfilling existence. So rhetorically wind farms fit better, since they are (IMO at least) rather lovely, while nuclear power plants ... aren't.

  5. Does a brutalist nuclear cooling tower spoil the view more than a phalanx of flailing windmills? I don't know; frankly, I think both are ugly. So do most people, to judge by the mounting Nimby lawsuits against wind farms. And it's not hard to see why. Modern wind turbines are not the picturesque, beautifully small adornments we remember from Dutch landscapes. Now 20 stories tall and counting, each one is a domineering industrial installation in its own right. But because they yield so little usable energy, we need hundreds of times as many windmills as we do reactors. That makes the burden wind power imposes on the land objectively much greater, regardless of the aesthetics.

  6. Hi Josh,

    Here I have to disagree with you in an important sense.

    I feel uncomfortable with your statement that "it's just calling attention to Keynes' view that there are no economic reasons why we can't assure everyone of a beautiful and fulfilling existence."

    I just base myself in tying a "beautiful and fulfilling existence" with the availability of time and how capitalism has freed huge amounts of time (productivity gains) and the issue of who appropriates it.

    In other words, I can't see capitalism compatible with such an outcome that we all wish on the basis of the productivity paradox. Productivity doubles, which means it takes have the time to produce the same amount of stuff or in the same amount of stuff one can produce twice as much, yet the majority of people in this planet are expected to produce twice as much or else...

    For me this is an example why we need to get rid of capitalist relations of production, so that the other side of the coin in the productivity paradox can be enjoyed by the masses around the world, not merely this or that country or this or that class. In conclusion, lets get rid of the masters and the system that gives them their privileged position to contemplate reality, as with what Keynes is doing in those comments that you quote of him. That's why I like Harry Cleaver and his analysis of the horrible ways Marxian crises theories have gone. They loose the important point of the issue of freed up time and the struggle for it, which reminds me of Paul Lafargues fantastic essay on Marx and the issue of leissure, free time, laziness and work.

  7. Ian J. Seda

    There is an economic and a political question here. Keynes only deals with the economic (see related ideas to the one above in "Economic Possibilities..."). To me, the more important is as you say, the political question over the control of time. You want to cite famous essays here; there is one no more famous on the issue of time in the workplace in capitalism than E. P. Thompson's classic "Time and Industrial Capitalism".

  8. Well, but even the strictly economical is simply wrong because it abstracts from the economic mechanisms of how capitalism works. Again, that's why I think the productivity paradox is a great example, it brings to light the specificity of capitalist production.

  9. Ian,

    Of course we need to get rid of capitalism! Do you really think we disagree on that? You know me better than that, my friend.

    I think, though, that you may underestimate how close Keynes' vision was to Marx's. Obviously Marx understood the social antagonism of capitalism much better than Keynes. Keynesianism always starts from the idea of the state standing outside and above society. But at its best, (Post) Keynsianism can be like Wittgenstein's "showing the fly the way out of the fly-bottle," demonstrating that economic constraints as we experience them don't originate in the material world, but in the social relations of capitalism. (This is the ultimate lesson of a focus on aggregate demand and financial constraints, I think.) And at the end of the day, Marx and Keynes were, I would argue, motivated by very similar ideas of human flourishing.

    That's sort of what was in the back of my mind with this quote, tho I admit it doesn't come through at all in the post.

  10. This post reminds me of a strong disagreement Josh and I had last summer on my blog about the labor-leisure tradeoff and the conservatism of Keynes' implicit model of the macroeconomy.

    Josh first made the point that Keynes' insights re: unemployment do not depend on labor market dynamics, and thus, we can accept a neoclassical model of the labor market (read: accept one of the two classical postulates) and still get disequilibrium, because of problems in the financial market. I accept that point.

    But the leap from that point to then saying that Keynes actually /does/ have a radical model of the labor market which hinges on G.E. Moore's philosophy of "the good life" is something of which I am still not convinced. While Keynes might have argued that material interests are finite, and are thus only one stage in the course of human development, I don't think that neoclassical economics would argue any differently. Once we get to a point where capital scarcity is no longer an issue so that the rental rate on capital approaches zero, there is no tradeoff to worry about. The NC model of growth explodes because the transversality condition is violated and we get Keynes' utopia.

    As a result, the Keynesian story is conservative at its core because of its implicitly conservative, religion (judaeo-christian tradition)-influenced theory of labor markets. Yeah, it's a really radical methodological break from NC econ and a substantial contribution to the theory of finance, but let's not take things too far...

  11. I should just briefly note that the above point was made specifically in reference to Josh's comment (which I think is inaccurate) that "And at the end of the day, Marx and Keynes were, I would argue, motivated by very similar ideas of human flourishing."

  12. While Keynes might have argued that material interests are finite, and are thus only one stage in the course of human development, I don't think that neoclassical economics would argue any differently.

    Oh yes they would! The non-satiability of consumption demand is very important to neoclassical economists, both formally and for their larger vision of the world.

  13. ... actually, now that I think about it, it probably is wrong to say that Marx and Keynes had the same visions of human flourishing. For Keynes, the good life was defined by the contemplation of beautiful objects and the cultivation of beautiful experiences, while for Marx it was defined by active creation and struggle. (When his daughters asked him for his idea of happiness, he said, "To fight.") But they are both anti-capitalist visions, and I don't think it's correct to label either conservative or judeo-christian.

  14. dictateursanguinaireJune 6, 2011 at 10:10 PM

    just to add in, i would venture that NC econ does very much rely on that idea. literally there is a nine paragraph editorial/sub-Freud hack psychology piece on "the insatiability of human wants" in my (obv. neoclassical) econ 101 text