
The Keynesian Revolution: A new biography of John Maynard Keynes - newest
http://bostonreview.net/class-inequality/jonathan-kirshner-keynesian-revolution
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yyyk
The treatment of Keynes' post-WWI comments is an apologia that misses the
deeper point. Keynes was not merely wrong about the German ability to pay, he
misread the strategic situation. The French position was not merely motivated
by vengeance.

The Post-WWI situation was simple in a way yet strage. Germany was defeated,
yet it remained the strongest country in continental Europe. Britain and
France were bled dry, Russia was in chaos and the Western Front was mostly
fought on French soil. This left the question of how to settle things so that
Germany does not refight the war for the same old objectives.

The French position was a Realist position - make Germany too weak to make
trouble. The Keynes position was Idealist, but it needed one condition to be
viable in any form: a defence alliance to prevent Germany from making trouble.
Which was something that was probably politically impossible in the US, and I
don't recall Keynes advocating for it.

So his contribution was to help weaken one option that was politically
workable without giving a good alternative; Eventually (years later) helping
to lead to an arrangement that merely goaded Germany in the wrong direction.
There was a need to ask how to reintegrate Germany, but this was not served
well by ignoring the strategic situation.

~~~
chrispeel
> Keynes was not merely wrong about the German ability to pay

So the Germans were able to pay? I don't pretend to be a historian, yet I've
never heard the idea that Germany could pay.

BTW, the Odd Lots had a show [1] about the book recently

[1] [https://www.bloomberg.com/news/audio/2020-07-12/studying-
key...](https://www.bloomberg.com/news/audio/2020-07-12/studying-keynes-is-
more-important-than-ever-podcast)

~~~
QuesnayJr
Keynes' contention about the German ability to pay was and remains
controversial:
[https://en.wikipedia.org/wiki/The_Economic_Consequences_of_t...](https://en.wikipedia.org/wiki/The_Economic_Consequences_of_the_Peace#Reception)

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baybal2
I think Keynes was misunderstood massively like Karl Marx.

Marx said "I am not a Marxist" when he saw his ideas being put into a
something bordering a religious teaching.

And later, I think, Keynes was rather unsettled with how his works been used
to legitimise a new maxim "government can print money out of thin air," from
an inverse of what dominated US economic thinking before him. It was not his
idea at all.

Beyond simply affirming that aggregate demand thing exists, and that a lot
things in economy spin around it, he did not produce a religious edict on how
to run a government monetary policy.

If he saw Keynesianists today, he would feel rather disappointed.

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QuesnayJr
It is literally true that the government can print money out of thin air. This
is a genuine fact about the world today, so I don't see how Keynes would draw
a different conclusion.

Keynes did say

    
    
      If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again… the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing.
    

which is a more eloquent argument for an expansionary monetary policy than
most current economists could produce.

~~~
injb
I've never understood this. If everyone is doing unproductive "busy work"
(digging up money) instead of making useful goods and services, then how could
the money be worth anything?

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ori_b
Someone has to make shovels, houses, clothing, etc. The people who find the
cash also end up spending it on other things. It doesn't matter that the money
isn't initially earned for useful work, as long as it gets spent on useful
work.

Since it's digging through a mine using drill bits to break up the rocks, you
can call the idea "minecoin bitting"

~~~
ultrarunner
I wouldn’t much like to trade the things that fill my house for shovels and
other money-digging items. How many people can the economy afford to allocate
to money-digging before the production of other things that support our
current quality of life begins to suffer?

~~~
TheOtherHobbes
"Unproductive money digging" is _exactly_ how this financialised economy
operates.

The only difference is that process of production and mining is a little less
obvious - to outsiders - than stuffing cash into bottles and burying it.

And of course it's privatised, which is better by definition, supposedly.

Some useful work is a byproduct. But the total of useful work isn't
necessarily higher than in Keynes' example - see also Graeber's _Bullshit
Jobs_ , etc.

~~~
ultrarunner
I agree that many aspects of the (U.S.) economy are wholly unproductive, and
even that such behavior is made possible (if not outright incentivized) by
institutions like the Federal Reserve and many aspects of the U.S. military.
I'm not sure I'd hold that up as a shining beacon of privatization. You'll
have to extrapolate on why you think that's "better by definition,
supposedly."

If you're trying to speak solely to the financial sector divorced from the
rest of industry, I'd be curious to hear your thoughts on whether money-
digging would be a suitable replacement.

