TY - CHAP
T1 - Keynes in Transition
T2 - 'The Economic Possibilities for our Grandchildren'
AU - Jespersen, Jesper
N1 - Bidrag til festskrift for Sheila Dow, University of Sterling, Scotland
PY - 2023/1/9
Y1 - 2023/1/9
N2 - Keynes’s short essay The Economic Possibilities for our Grandchildren, originally published in 1930, is an important paper. Here, Keynes admitted that he is in a position of intellectual transition from being a heretic neoclassical macroeconomist (A Treatise on Money) into an open-system economist, where economic behaviour should no longer be dominated by ‘avarice, usury and love of money’. Unfortunately, Keynes was still trapped by his neoclassical theoretical macroeconomic upbringing, where savings are the ultimate source for real investments and increased material prosperity. This essay clearly demonstrates that Keynes is caught ‘mid-stream’. He was not yet ready to theoretically explain why and how financial savings could be analytically detached from real investments. However, very regretfully, he had to conclude the essay in accordance with the ‘fundamental equation’ of his just published book (ToM). To fulfill his vision for a ‘materially good society for our grandchildren’, a continuously economic growth generated by increased savings has to be realised. Therefore, for another 100 years we (his ‘children’) have to accept (even to promote) an immoral behaviour, where ‘foul is [considered] fair’ and ‘fair is foul’. This moral dilemma was not solved in the 1930-paper. On the other hand, it did not prevent him from finishing the essay in the following manner: ‘But, chiefly, do not let us overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance’.
AB - Keynes’s short essay The Economic Possibilities for our Grandchildren, originally published in 1930, is an important paper. Here, Keynes admitted that he is in a position of intellectual transition from being a heretic neoclassical macroeconomist (A Treatise on Money) into an open-system economist, where economic behaviour should no longer be dominated by ‘avarice, usury and love of money’. Unfortunately, Keynes was still trapped by his neoclassical theoretical macroeconomic upbringing, where savings are the ultimate source for real investments and increased material prosperity. This essay clearly demonstrates that Keynes is caught ‘mid-stream’. He was not yet ready to theoretically explain why and how financial savings could be analytically detached from real investments. However, very regretfully, he had to conclude the essay in accordance with the ‘fundamental equation’ of his just published book (ToM). To fulfill his vision for a ‘materially good society for our grandchildren’, a continuously economic growth generated by increased savings has to be realised. Therefore, for another 100 years we (his ‘children’) have to accept (even to promote) an immoral behaviour, where ‘foul is [considered] fair’ and ‘fair is foul’. This moral dilemma was not solved in the 1930-paper. On the other hand, it did not prevent him from finishing the essay in the following manner: ‘But, chiefly, do not let us overestimate the importance of the economic problem, or sacrifice to its supposed necessities other matters of greater and more permanent significance’.
U2 - 10.4324/9781003142324-10
DO - 10.4324/9781003142324-10
M3 - Book chapter
SN - 978-0-367-69567-5
SN - 978-0-367-69568-2
T3 - Routledge Studies in the History of Economics
SP - 140
EP - 151
BT - Economic Methodology, History and Pluralism
A2 - Negru, Ioana
A2 - Hawkins, Penelope
PB - Routledge
CY - London & New York
ER -