Left denunciations of “Keynesianism” often seem obvious and self-evident. But socialist economic analysis has had more to do with Keynes’s ideas than usually acknowledged.
Economist John Maynard Keynes at his desk, March 16, 1940. (Tim Gidal / Picture Post / Hulton Archive / Getty Images)
Last month, Jacobin editor Seth Ackerman penned a long and wide-ranging guide to various Marxist debates about crisis theory, reformism, and the long-debated “law of the tendency for the rate of profit to fall.” The ultimate point of the essay was to critique Robert Brenner’s analysis of the “long downturn.”
Sociologist Aaron Benanav has recently provided a similarly wide-ranging reply of his own to Ackerman’s piece. I don’t wish to comment on this debate as a whole. However, I do think there is an element of Benanav’s piece worth picking up for a left-wing audience interested in these debates over economic theory.
In defending Brenner, Benanav makes a point of distinguishing his analysis from the law of the tendency of the rate of profit to fall. Instead, he tells us that Brenner, like quite a heterogeneous (and debatable) list of Marxist scholars, is a “long-wave theorist,” which means “they can all count themselves as followers of Nikolai Kondratiev.” Despite this invocation, Benanav’s piece does not articulate anything that particularly distinguishes his (or Brenner’s) analysis from orthodox economics in terms of economic analysis. His discussion of the growth of services employment and output relative to manufacturing, patterns of real GDP growth, and falls in “capital productivity” fits right into the discussions mainstream economists have with each other. So does the absence of financial factors and dynamics in capitalist economies — with the exception of one reference to “financial bubbles” caused by “state policies” aimed at “preventing their firms from suffering defeat.” Indeed, this reference fits best at a right-wing Cato Institute event on monetary policy.
It’s obvious that Benanav’s reliance on mainstream economists makes him uncomfortable. One way he distinguishes himself from them is his political analysis. He states, “The failure of most non-Marxist secular stagnationists to draw out the political implications of their theory in more detail is one of their failings.” Their other failings go unmentioned. Another distinction is made by rhetorical invocation of an enemy: “Keynesianism.” The Keynesian specter has haunted Marxism for almost a century now, and punching at such ghosts is a tried-and-true method for showing your radical bona fides.
What’s In a Name?
Let’s examine Benanav’s very interesting use of the phrase “Keynesians” more closely. While laying out his alternative vision of the future, he makes a point of taking a shot at “Keynesians” twice:
Indeed, investment throughout the economy would need to place with much greater democratic involvement than Keynesians — in their overwhelmingly technocratic fantasies of economic transformation — imagine . . .
No matter what the Keynesians say, and no matter how good their economic analyses, there is no neat trick for getting elites to relinquish their economic and political power.
In reading these comments the obvious question emerges: who are these “Keynesians”? Are they economists in the Kennedy or Johnson administration? More recent orthodox economists like the infamous Larry Summers? Are they mid-twentieth-century social democrats? Benanav does not tell us.
This type of jab has typified a certain type of Marxist writing for at least seventy years. In that sense, this piece should not be read as specifically aimed at Benanav. I highlight Benanav’s comments because his piece is recent, it’s part of a debate that has both gotten a lot of attention and renewed left interest in economic theory, and the contrast between Benanav’s rhetoric and his actual economic analysis is striking.
In the 1950s and into the ’60s, breezy dismissive comments about Keynesianism made some sense. There was something concrete that was identifiable as ‘Keynesianism’ that had great influence among both economists and the wider society.
In any case, in the 1950s and into the ’60s, these breezy dismissive comments about Keynesianism made some sense. There was something concrete that was identifiable as “Keynesianism” that had great influence among both economists and the wider society. The fact that its ideas had — at best — a limited relationship to Keynes’s own writing was mainly a matter of historical curiosity. Meanwhile, in the midst of McCarthyism, a sharp line of repression divided Marxists and Communists from their former popular front brethren — and the rest of the economics profession.
However, even as the ’60s progressed, the radical rhetoric regarding “Keynesianism” already began to become stale. To understand why, we have to open the black box of “Keynesianism” and be more precise and careful by what we mean. Economists — including the most influential ones — were never slavish devotees to even the caricature of Keynes taught in the textbooks. The “Keynesian Revolution” did not conquer the United States; at best it conquered the Boston area (for a limited time). It’s no coincidence, in fact, that dynastic scion John F. Kennedy was the high-water mark for anything approaching “Keynesianism” in government.
Conversely, the lines between those interested in Keynes’s actual economic analysis and that of Marx was always blurrier than such dismissive constructions allowed. As historian Tim Barker has written about, there was cross-pollination between those fascinated by Keynes and those engrossed in Marx from nearly the beginning. Some were even fascinated by and engrossed in both. Part of the bitterness that McCarthyism engendered was precisely caused by the shattering of close intellectual relationships while watching the opportunists prosper from afar. Absence sometimes makes the heart grow colder. Meanwhile, Keynes’s closest colleagues included more Marxists than more familiar contextless barbs would suggest to the uninitiated.
Even those in the “Cambridge Circus” who were not Marxists began engaging Marx and Marxism more seriously. Most infamously, the legendary Joan Robinson became inspired by the arrival at Cambridge of an eccentric Polish Marxist economist who seemed to anticipate the core features of Keynes’s framework. Michal Kalecki, who would eventually return to Soviet Poland to attempt to influence economic planning there, provided a key intersection between Capital and the General Theory of Employment, Interest and Money. Stimulated by Kalecki, Robinson read Marx and published a pamphlet in 1942 on Marx that infuriated some Marxists but scandalized the entire bourgeois economics profession. Robinson would go on to claim that Kalecki’s theory of “effective demand” was superior. She would come up, in time, with yet more flamboyant heresies.
Neither “Wall St. Journal” nor “Moscow Economists”
Enter Monthly Review. Founded in 1949 as an independent socialist magazine, it was distinctive (in part) because it had the involvement of two economists with orthodox training. Paul Sweezy graduated from Harvard, became a lecturer there, but then left in 1947 as the Red Scare emerged. Meanwhile, Paul Baran managed to get tenure at Stanford, becoming the only tenured Marxist economist in the country. The treatment he received from Stanford and the US government for his political views (particularly regarding Cuba) were reflected in his multiple heart attacks, culminating in his early death. Sweezy, insulated from some of the worst treatment by independent wealth, nonetheless was targeted by the attorney general of New Hampshire, which led to his jailing and, eventually, a landmark First Amendment Supreme Court case.
One may expect, given the McCarthyist assaults that they and their close friends faced, that Baran and Sweezy had nothing but contempt for ‘Keynesianism.’ But that didn’t stop their willingness to acknowledge when their analysis overlapped.
One may expect, given the McCarthyist assaults that they and their close friends faced, that Baran and Sweezy had nothing but contempt for “Keynesianism.” And indeed, there are signs of that in various remarks in their writing and correspondence. But those signs didn’t stop their willingness to acknowledge when their analysis overlapped with the stereotypically “Keynesian.” Monthly Review also published, and took very seriously, Robinson, Kalecki, and other similar economic analysts. Their correspondence is, however, most revealing.
They show great care to critique “Keynesian” economic policy without “regressing” to “pre-Keynesian” ideas, and they were extremely sensitive to criticisms coming from Robinson and Kalecki. To illustrate, here is a passage of a letter from Baran to Sweezy from August 22, 1962:
By the way, Kalecki upbraided me in Warsaw because the Feb. 1961 MR (RoM) came also very close to this kind of an error. He said: why does Sweezy have to repeat those pre-Keynesian stories? I “defended” your honor by confessing that this happens to be probably the sole RoM with which I had also something to do, and that the error was committed by us jointly. But in substance, I think, he is right, and we should avoid formulations which put us either in the Wall St. Journal class or into that of the Moscow economists.
This passage is remarkable for many reasons, not least of which is the fact that an economist operating in the Soviet Union was criticizing two American economists for “pre-Keynesian stories.” Their magnum opus, published in 1966, Monopoly Capital, had great influence on the Left. A careful reader will also notice that it is far from a “pre-Keynesian” tract, even if it draws out a political-economic analysis far different from mid-twentieth-century liberalism.
For their part, it would be hard to argue that Robinson and Kalecki didn’t share Baran and Sweezy’s central criticisms of US economic policy at the time. Robinson famously referred to the formulation of Keynesianism promoted by the top of the American economics profession as “Bastard Keynesianism.” She went even further in a lecture in front of the American Economic Association given at the invitation of its president in 1971: the iconoclastic John Kenneth Galbraith. She tells the audience that because of the military-industrial complex, “Keynes’ pleasant day-dream was turned into a nightmare of terror.” Kalecki wrote about the role of armament spending in the West from the early 1950s and as the ’60s progressed worried about the intersection of big business and “Goldwaterism,” which he saw as a form of fascism.
Keynes Amid the Radicals
By the late 1960s, the conditions were right for ferment in economic thinking. Some of the last remnants of McCarthyism were defeated — loyalty oaths had experienced successive successful legal challenges — over a handful of years. Vietnam, pollution, and the civil rights movement were colliding and yes, even the economics profession felt the impact. The Union for Radical Political Economy (URPE) formed in 1968, driven at first by members of Students for a Democratic Society (SDS). While it’s beyond my scope here to recount a full history of URPE — others have done that much better — it’s worth emphasizing that URPE did not exist in isolation. Various dissident economic associations — and economic theories — were percolating at this time, and many URPE members were, or would be, members of these other organizations.
By the late 1960s, Vietnam, pollution, and the civil rights movement were colliding and yes, even the economics profession felt the impact.
One of those alternative economic frameworks percolating was what has become known as “post-Keynesianism.” Seeking to further develop and integrate the core insights of Keynes, Kalecki, Robinson, and others while distinguishing their analysis from “bastardized” Keynesianism, a few economists got together to organize a session at the main 1972 economic conference happening in Toronto. That session, sponsored by URPE and entitled “The Possibility of an Alternative to the Neo-Classical Paradigm: A Dialogue Between Marxists, Keynesians, and Institutionalists,” had largely Marxist economists for discussants; these included Donald Harris (Kamala Harris’s father) and Frank Roosevelt (President Franklin D. Roosevelt’s grandson).
Readers can imagine that these post-Keynesians trying to dialogue with Marxists did not find such dialogues easy — to say the least. Frank Roosevelt, for example, would present work at an URPE session a couple of years later that he eventually titled “Cambridge Economics as Commodity Fetishism” (His views on “Keynesianism” have softened over the years). But nevertheless, URPE continued to support post-Keynesians organizationally and with open dialogue. The Journal of Post Keynesian Economics would likely not have been started without its aid. Today, many URPE members are post-Keynesians, and URPE’s journal — the Review of Radical Political Economics — has published many post-Keynesian articles (even as the critiques and debates continue). Many radical economists consider themselves both Marxist and post-Keynesian, as well as various other iterations and combinations of views.
The point I am trying to make is not that anti-Keynesian forms of Marxism have no validity. Nor does one necessarily have to take Baran and Sweezy, or any of what came to be known as post-Keynesianism, seriously. Baran and Sweezy have, not infrequently, been themselves criticized by Marxists for being “Keynesians”. Proximity between post-Keynesians, neo-Marxists, orthodox Marxists, nondenominational radical economists, and others didn’t and doesn’t prevent stinging attacks or squabbles between them. However, it’s worth returning to Benanav’s initial theme: Brenner’s lack of commitment to orthodox Marxism.
Putting the “Political” in Political Economy
Indeed, it’s hard to see how Brenner’s views particularly distinguish him from Kalecki’s or Robinson’s. Both of them wrote about the role of “profit rates” in investment decisions. The key distinction seems to be much greater vagueness about the role of demand or government deficit spending. Meanwhile Benanav’s analysis leans quite heavily on mainstream economics. Given these facts, and the longer and more complex history laid out here, the Left is long overdue for a higher-quality conversation about “Keynesianism.” The context provided here has mostly been absent from general-reader left-wing magazines.
The Left is long overdue for a higher-quality conversation about ‘Keynesianism.’
In my view, this absence has ill-served readers coming from outside the debates among economists (and political economists in adjacent fields) by denying them the full breadth of left-wing economic perspectives. In fact, I think it has also ill-served anti-Keynesian Marxists, because readers have frequently been left lost or confused, rather than enlightened, by critiques they do not have sufficient background knowledge to understand. Nor has it given them an accurate picture of how economic theory intersects with politics. Various stripes of political analysis have mixed with ideas fairly described as “Keynesian.” Marxism meanwhile is no protection from reactionary politics: just ask House of Lords member Meghnad Desai.
Putting aside the case of the reactionary Marxists, the urgency of climate change has generated a renewed interest in big economic programs among Marxists — even if they happen under a “compromised” capitalist economic system. The continued dialogue in outlets such as the Dig over the meaning and significance of the Inflation Reduction Act reflect this complexity. Who exactly is engaging in “technocratic fantasies” on the Left or rejecting the importance of “democratization of investment decisions”? Who exactly are people targeting anymore when they dismiss “Keynesianism”?
These critiques may yet be valid. But they need to be demonstrated; we’re far past the point where they can be snidely assumed. If, for no other reason, than to keep readers out of the dark.Original post