R. Skidelsky The Return of the Master Penguin 2010 (Revised and updated.)
Skidelsky, as Keynes’ biographer, kept many of his ideas alive for decades. He now sets them in the context of the crisis of 2007/8 and the subsequent ‘stagnation and under-employment’, contrasting them with the once mainstream conventional ‘conservative’ (small c) views.
Skidelsky sees the problem as one of ideas, and particularly (as in his previous works) a lack of appreciation of uncertainty and its significance. (I agree. I became interested in Keynes through this link.)
Analysis versus Syntheses
Skidelsky finishes with a quote from a letter from Falk to Keynes:
I wonder…whether analysis is your fundamental process, whether it doesn’t follow, with a somewhat grudging struggle at rational justification, rather than precede synthetic ideas, which are your true delight, and with which from time to time you startle and shock the majority. Didn’t Newton once say that his ideas reached him by some mysterious route which he could not explain? …‟
Skidelsky does not quote Keynes’ reply:
The extent to which one sees one’s destination before one discovers the route is the most obscure problem of all in the psychology of original work. In a sense it is certainly the destination which one sees first. But then a good many of the destinations so seen turn out to be mirages. Only a small proportion of one’s initial intuitions survive the struggle of trying to find a route to them.
Or this comment on Keynes:
Falk, in reminiscing about Keynes’s way of thinking, recalled how he and Keynes would dabble in considering the consequences of assuming to be true the exact opposite of the usually accepted truth. “Scepticism”, he told Robinson, “is a fruitful source of new ideas”.
This view of Keynes mirrors the ‘modern scientific’ approach of Keynes’ one-time Minister and on-going interlocutor, Smuts. In brief, if one sticks to conventional methods, such as conventional logic, analysis and rationality, one is trapped within a box of conventions, and can hardly escape the status quo group-think. In this sense, Keynes was a modern thinker. But today, while we have moved beyond the old conventions, we are constrained by new conventions. Skidelsky has repeatedly emphasised the role of uncertainty as against the established convention of using numeric probabilities. But maybe we need to be more broadly unconventional, as Keynes was, if we are to escape the conventionality of probability. We need to be more scientific (in the sense of Smuts) and less conventionally scientistic.
As a mathematician, Skidelsky’s view of mathematics seems unfortunate. Under ‘reconstructing economics’ he says:
The chief argument of this book has been that underlying the escalating succession of financial crises we have recently experienced is the failure of economics to take uncertainty seriously. It has covered up this neglect by means of sophisticated mathematics.
But instead of suggesting that economists should replace their ‘Bayesian’ notions of probability by Keynes’ mathematics of probability from his Treatise (suitably refreshed), Skidelsky suggests that:
… the mathematical component in the weighting of the degree should be sharply reduced. …
… economics as it now exists is far too firmly entrenched as a distinctive expression of Enlightenment thought. But it may come about gradually with the shift of power and ideas from the United States and Europe to Asia and Latin America. …
This seems, to me, quite wrong. It seems to me that Newton was not a Newtonian any more than Bayes was a Bayesian or Keynes was a Keynesian. I agree that economics (as much else) has been driven by contemporary notions of the Enlightenment. But just as the remedy for Keynesianism and Bayesianism might be to ‘seek the source’, so to we might recognise that the Enlightenment thinkers were often more sensible that one might suppose from a superficial reading of them. If one does this, it is not at all clear that their ideas are all that different from, say, Confucius, or that Keynes is incompatible with Asian thinking on economics.
Much of Skidelsky’s observations on rationality and uncertainty might be short-cut by reference to Russell, building on Keynes. Then the use of mathematics might not only be safe, but useful. It is not clear to me that any lesser reform could escape the baleful influence of the assumptions that are by now lost deep within the idol of contemporary rationalism.