How Keynes made the world a better place

Posted on December 4, 2011 in History

Source: — Authors: – news – Grand Pursuit: The Story Of Economic Genius  By Sylvia Nasar  Simon & Schuster 576 pages, $39.99
December 3, 2011.   By Jessica Warner, Vancouver Sun

Sylvia Nasar, author of A Beautiful Mind, produces books at the rate of one every 13 years. I admire her for it. The more usual rate, one every two years, is just enough to keep an author in the limelight – and when too many years pass without a book an author is generally considered to be an ex-author.

But when you are writing about geniuses – and Nasar does seem to be drawn to this class of individuals – you have your work cut out for you. And hard as it is to write about a lone genius (John Nash of A Beautiful Mind) it is harder still to write about a whole herd of geniuses, in this case the great economic activists of the 19th and 20th centuries.

Not that you would know it from the book’s title. The actual subject is something with an off-putting name: macroeconomics.

At its heart, macroeconomics is all about identifying interdependencies in an economy: correctly identify the variables and their relationship to each other, and governments can use them as so many levers to lift people out of poverty and jump-start ailing economies.

This is not an easy concept to convey. Nasar’s solution, a very felicitous one, is to write a group biography, or what academics like to call prosopography. This was a device Robert Heilbroner used in his now classic Worldly Philosophers, but where Heilbroner cast a wide net, reaching all the way back to the Middle Ages, Nasar focuses more narrowly on a dynasty of Cambridge economists: Alfred Marshall, John Keynes, Joan Robinson and Amartya Sen.

On the periphery of this charmed circle are several Americans (Irving Fisher, Paul Samuelson and Milton Friedman before he became a rabid monetarist), an Austrian (Joseph Schumpeter), and sundry individuals who have ended up (in Nasar’s estimation) on the wrong side of history: Malthus, Marx and Beatrice Webb in her Stalinist phase.

But Nasar’s isn’t simply a book about what certain people thought. It is also about how they lived, and how they were themselves moulded by the economic upheavals they lived through. These details, their depth and effortless twining, make Grand Pursuit an immensely satisfying read, as do the solid research and equally solid writing that underpin it.

But the book also succeeds on its own stated terms: to tell the story of a powerful idea. That idea, though Nasar never says it in so many words, is that the world is a better place for having had Keynes in it.

And so, while Grand Pursuit is a story with many geniuses, there is one genius who towers over them all: Keynes.

This gives the narrative a somewhat Whiggish trajectory: first everything is dark, then it is dawn and the world is abuzz with several good ideas that have not quite coalesced into a coherent theory, and, finally, sometime around high noon, we have Keynes pulling it all together and giving us a tool we can and should use to better ourselves.

The question for me is not whether this version of events is essentially correct (I believe it is), but rather whether the sun is in fact setting on Keynes. Because at a time when most economists are calling for more stimulus spending and regulation, we instead have governments, our own included, talking up belt-tightening and laissezfaire capitalism.

Nasar, I suspect, has strong and doubtless very sensible views on the subject. But she refrains from offering them and the reader is left to draw his or her own conclusions. To think, in other words.

This makes Grand Pursuit more than just a great read: it makes it a great book.

Jessica Warner teaches at the University of Toronto’s Institute for the History and Philosophy of Science.

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