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’.

Focus group fluff and public policy

Glenn Milne heaps praise on a speech by Michael Chaney of the Business Council of Australia to the National Press Club (official text here). Milne's report has Chaney quoting from focus-group research on popular attitudes (although this is not quoted in the text, presumably it has been shared with Milne). This seems to be focus-group fluff but what strikes me is not a single anti-union statement is quoted, it is full of profundities such as:
Keep the money cogs turning: "Money circulating through the system - through various taxations - so that then you can have the benefits, e.g. infrastructure keeps being improved."
Forward thinking: "If you don't look forward, you'll never get there."
There is solid social-science research on aspirationals (a forthcoming paper by Murray Goot of which an early version was delivered at the APSA 2006 conference), but of course this is ignored. David Peetz in Brave New Workplace describes how BCA research has become flimsier and flimsier in its attempt to link individual contracts to productivity gains, but relying on focus-groups to justify policy is truly bizarre.

Anthony Downs and Victorian politics

The American elections were a crash and burn for the strategy of polarisation and 'mobilizing the base', but maybe the Victorian elections will show that the opposite strategy of tacking to the centre may have problems also. Victorian Liberals are making progress in the polls. So far a good opposition performance, reminiscent of Bob Carr in 1991 and 1995 and likely to be as problematic in government as promises prove impossible to deliver. If you tack to the centre will the opposition eventually work out how to do the same and win? David Cameron's good poll performance in UK is an example. My thinking influenced by a very interesting book Redeeming the Communist Past on the political adaptation of former Communist parties in Eastern Europe. On one hand a bit depressing, mostly the road to political success for these parties has been through a Downsian pursuit of the middle ground and a mass party membership just gets in the way of this. Czech voters frightened off when door-knocked by elderly Communists who thought life had been great before 1989. But the author does argue that it can be rational for a party to develop on some aspects a distinctive position, even a minority one, both as a means of mobilising its core support and of differentiation in the political marketplace. For the post-Communist Polish left this was secularism and resistance to the Catholic nationalism of the right.