Paul Krugman’s column today on the psychology of Very Important People, their inability to accept a simple answer to the slump (spend more!) and their urge to pin it on a moral failing like too much public debt and too little skill acquisition, has reminded me of a thought that struck me several years ago when I read Skidelsky’s magnificent three-volume biography of Keynes (especially this and this).
Keynes was an innovative thinker in economics, but he was far more than that. His other great passion in life was his love for art, theater, dance, good food, and finely made things of all description. He liked travel. He liked entertaining and a stimulating conversation. He liked sex. In short, he was an aesthete, a man with intense and finely developed tastes who lived for enjoyment. And ever since his student days, his greatest political commitment was to create a world in which as many others could enjoy these things as possible.
You could pigeonhole him in various ways. This was very British, of course, and characteristic of a tendency that marked the social and political radicals of the upper-middle class during the late nineteenth and early twentieth centuries. Without getting all Ferguson about it, this was also representative of a gay cultural milieu that emerged during the same period (and was linked to the larger cultural radicalism).
In crude terms, it was a backlash against the stifling moralism and (ostensible) self-denial of the Victorians, the Very Serious People of their day. For a VSP, progress depends on investment, which depends on saving, which depends on self-denial. This is what we learn from the Robinson Crusoe parable, the sermons on poverty delivered by Nassau Senior, and popular fiction of Samuel Smiles. If people are enjoying themselves too much, it must be a sign that something is wrong.
As I thought about it, the economic dispute between Keynesians and “classicals” was the tip of a much larger cultural iceberg. Keynes thought that the slump could be surmounted by more spending, and more pleasure, and to his opponents this was not only wrong but monstrous. Surely economic breakdown represents moral breakdown at some level, and the remedy of further borrowing and spending can only deepen this descent into moral failure.
Nearly a century later, has it really changed? Do we see a rational debate over different economic policies based on reasoning (and that includes models) and evidence? Or are deep-seated cultural biases—economics as a Victorian morality tale—still what it’s all about?