Monday, February 19, 2007

Wisdom from Keynes and Menzies

Just finished reading Robert Skidelsky's Keynes biography. Even I found the last volume heavy going and it gives the impression of running out of steam towards the end. Still it is a very impressive piece of work. It does show that Keynes was not as left-wing as many claimed in particular explaining the 'socialisation of investment phrase'. His interpretation reminds me of Martin Sklar's depiction of the modern American corporation as a form of socialism, perhaps in the sense that Marx might have intended it. The Australian left has been much too prone to yoke Keynes to their banner of populist underconsumptionism. Could we again see an intellectual’s intellectual such as Keynes playing such a role today I doubt it very much? One aspect that the last volume touches on is the controversy among the allies towards the end of World War II about the plan of US Treasury secretary Henry Morgenthau to de-industrialise Germany after defeat, the prospect of the German people being reduced to starving peasants and the possible deportation of the 'surplus' population was seen as a justifiable punishment and protection against another war. More on the plan here. The absurdity and inhumanity of it was protested by Keynes and others and it did not come to pass. I was reminded of a speech by Menzies in 1944 in which with the boldness of an opposition backbencher he said that post-war:
we should work not only for our own prosperity and that of allies of our allies, but for a prosperous Germany and a prosperous Japan. This - which would appear the very ecstasy of sentimental folly to the unthinking - is, of course, no more than another illustration of enlightened self-interest.
Difficult to imagine our current know-nothing conservatives adopting a similar approach. Unfortunately wars are usually the occasional for grim and joyless intellectual holidays as W. K. Hancock noted in one of the greatest books ever written by an Australian; Survey of British Commonwealth Affairs.
Skidelsky an interesting figure who followed the road of some of his generation from left to right, although never as far from one side to the other and is now a Lords crossbencher. I admire his attempt to cross disciplinary boundaries. Some interesting reflections in his retirement speech:
history does, in a different way, just what economics does: it offers a standard by which to judge contemporary arrangements, only this standard is set in the past, not the future, and consists of facts not models. I came to believe that not only did they do things differently in the past, but often better. But this liberating touch is also a trap. Historians are inevitably disposed to view the present as a repetition of the past, and thus to the view that the past can never be overcome.. It was Gibbon who said that history is nothing but a record of the ‘crimes, follies, and misfortunes of mankind’. This was admittedly written before our civilisation had acquired a strong sense of Progress. No historian today would say that we are condemned to repeat the past, certainly not in any simple sense. They would acknowledge that we have areas of freedom to make our own history. But the historian’s tendency is still to believe that this freedom exists within the confines of what has already happened...History is the most deficient of all social studies in the art of invention, because its ideas are all backward-looking. And though history is very important as a brake on folly in rulers-Communism wrecked the societies it ruled by its claim to be able to transcend history –it does not, as I thought at the age of eight, ‘explain the whole thing’.



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