Louis Proyect: The Unrepentant Marxist

May 27, 2020

Was Keynes a socialist?

Filed under: economics — louisproyect @ 6:22 pm

John Maynard Keynes

The latest issue of Catalyst, a journal that is published by Bhaskar Sunkara and edited by Vivek Chibber, has an article by economics professor Gary Mongiovi titled “Was Keynes a Socialist?” It is a gushing review of “Keynes Against Capitalism: His Economic Case for Liberal Socialism”, a new book by James Crotty. Crotty, a 79-year old economics professor emeritus, is a post-Keynesian just like Mongiovi. Among the left professorate, post-Keynesianism is a way of being on the left but not too far left. It puts you in the same camp as the staff of the Jerome Levy Institute at Bard College, a school well-known for its housebroken faculty. At such places, Hyman Minsky is taken in large doses and a smidgen of Karl Marx is thrown in just to add some spice to the stew. After all, you don’t want to go too far with the Marxism stuff in light of Keynes’s take, which is cited by Mongiovi:

Keynes was highly antipathetic toward Marx. He characterized Das Kapital as “an obsolete economic textbook which [is] not only scientifically erroneous but without interest or application for the modern world.” To George Bernard Shaw he wrote in 1934: “My feelings about Das Kapital are the same as my feelings about the Koran. I know that it is historically important and I know that many people, not all of whom are idiots, find it a sort of Rock of Ages and containing inspiration. Yet when I look into it, it is to me inexplicable that it can have this effect. Its dreary, out-of-date, academic controversialising seems so extraordinarily unsuitable as material for the purpose.”

Interesting that Keynes would confide in Shaw. Both of them were members of the Fabian Society, a reformist gathering of intellectuals that was sort of the equivalent of the Jacobin editorial board in the 1930s. Despite their disavowal of revolutionary politics, they absolutely doted on Joseph Stalin, whose show trials and mass executions Shaw defended:

But the top of the ladder is a very trying place for old revolutionists who have had no administrative experience, who have had no financial experience, who have been trained as penniless hunted fugitives with Karl Marx on the brain and not as statesmen. They often have to be pushed off the ladder with a rope around their necks.

Keep in mind that admiration for Stalin’s ruthlessness was widespread among the intellectual elite in the 1930s. The NY Times’s Walter Duranty defended the show trials, as well. To his credit, Keynes never fell into this trap. He called Stalin “terrifying” and guilty of eliminating every critical mind in the USSR.

That being said, Keynes never believed in the power of ordinary working people to control their own fate. Like the rest of the Fabians, he saw socialism as a project to be carried out by a modern version of Plato’s philosopher-kings who would administer a mixed-economy state. In the 1930s, the closest anything came to this ideal was the New Deal and Sweden’s social democracy, two of the Sandernista models. In a shrewd analysis of Crotty’s book, Michael Roberts identified the elitist bent:

As Crotty puts it, Keynes’ central point was that the emerging importance of the system of public and semipublic corporations and associations combined with the evolution of collusive oligopolistic relations in the private sector already provided the foundation for a qualitative increase in state control of the economy.  Crotty concludes “Keynes was unabashedly corporatist.”  Indeed – I would add that his concept of corporatism was not dissimilar to that actually being implemented in fascist Germany and Italy at the time.

And who was to run this corporate capitalist/socialist state?  According to Keynes’ biographer, Robert Skidelsky, it would be “an interconnected elite of business managers, bankers, civil servants, economists and scientists, all trained at Oxford and Cambridge and imbued with a public service ethic, would come to run these organs of state, whether private or public, and make them hum to the same tune.”

It is beyond the scope of this article to offer a critique of John Maynard Keynes or James Crotty’s new book. Given all the projects I have taken on, it would not be worth my time or that of my readers. Instead, I want to hone in on Mongiovi’s review as another indication of Sunkara and Chibber’s slow but inexorable retreat from Marxism. By implicitly endorsing Keynes’s doctrines that Mongiovi describes in the subheading of his article as “indeed more radical than commonly thought” and of “considerable relevance for the Left today”, they are repositioning themselves as Brooklyn hipster versions of Dissent magazine.

At the start of his review, Mongiovi recapitulates what most of us, including me, think of Keynes. He cites Lawrence Klein, an early champion of Keynesian economics and a future Nobel laureate: “Marx analyzed the reasons why the capitalist system did not and could not function properly, while Keynes analyzed the reasons why the capitalist system did not but could function properly. Keynes wanted to apologize and preserve, while Marx wanted to criticize and destroy.”

Apparently, Crotty’s book is a corrective to this false characterization. Instead, Keynes “Keynes was building a case to replace it [capitalism] with a form of democratic socialism in which most large-scale capital investment spending would be undertaken by the state or by quasi-public entities.” All this would unfold in a “gradual transition, through a process of trial and error, to a planned economy.” This sounds pretty much like how Jacobin described a Sanders presidency, doesn’t it?

Perhaps realizing that the grounds for calling Keynes a socialist are tissue-thin, Mongiovi takes the tack that labels are not that important:

I doubt that there is much to be gained by trying to pin a label like “liberal” or “socialist” onto Keynes — he was too exuberant a thinker to be put into a box. And inasmuch as these particular labels can mean vastly different things to different people, the exercise is doubly futile.

But these sorts of labels are used to describe an ideology, something that can be extremely difficult to pin down. Instead, it is more important to define socialist in terms of a criterion that can be applied to a state like Cuba or the former Soviet Union. This is a function of examining who owns what. Of course, it can sometimes be difficult to come to such a decision when the data itself is in transition, like Cuba in 1960 or Yugoslavia in Tito’s early years. Frankly, it matters little to me whether you want to call Keynes a liberal or a socialist. I am far more interested in what positions he takes on a particular capitalist state itself.

For Mongiovi and Crotty, Keynes was on the left. “He was not mainly preoccupied with taming the business cycle: his ultimate objective was to bring about a radical transformation of our economic system.” So, what does such a radical transformation entail? Mongiovi attempts to answer that question in a section titled “Keynes as a Theorist of Structural Change”.

After making the case that Keynes, like Marx, saw capitalist crisis as rooted in its own contradictions, Mongiovi—speaking for Crotty—refers to the measures Keynes saw as moving toward socialism:

Since the effective demand problem was fundamentally structural, Keynes advocated a structural solution: a permanent expansion of the state. The idea was that a mechanism needed to be put in place to provide a permanent stimulus to the economy. Crotty describes at considerable length Keynes’s proposal to expand public control over investment. The central institution Keynes envisioned for this function was a Board of National Investment, an idea he first put forward in the late 1920s when he helped to draft a Liberal Party report on Britain’s Industrial Future. He pushed for such a board again in the early 1930s when he served on the famous Macmillan Committee to formulate a response to the problems confronting the British economy. Crotty describes the proposed role of the board as “very ambitious indeed — to help recreate long-term boom conditions similar in vigor to those of the nineteenth century through public investment planning. This definitely was not a short-term government stimulus program designed to ‘kick-start’ a temporarily sluggish economy and then let free enterprise take over.” One significant achievement of Crotty’s book is its demonstration beyond a doubt that Keynes’s overarching objective was to make a case for a program of national economic planning. Crotty marshals all of the available evidence and sets it out in an exceedingly clear way.

What’s entirely missing from Mongiovi’s review, and presumably in Crotty’s book, is any engagement with the class struggle. This paragraph is riddled with class-neutral terms. For example, take the “permanent expansion of the state.” If this in itself was a positive good, you might ask whether there was much difference between the New Deal and the corporatist state of fascism. Indeed, Michael Roberts pointedly refers to Crotty’s admission that “Keynes was unabashedly corporatist.”

Lynn Turgeon, the heterodox economist who died in 1999, saw corporatism as a system that was not inherently progressive. Influenced by Paul Sweezey and a frequent contributor to MR, he argued that FDR’s Keynesianism and Nazi economics had something in common, namely strong state intervention, especially using a military build-up to offset the Great Depression:

Some wag has defined an economist as someone who has seen something work in practice and then proceeds to make it work in theory. In some respects, this may have applied to Keynes, who was certainly aware of the tremendous economic miracle of Adolf Hitler in reducing unemployment from over 30 percent when he took office in 1933 to 1 percent by 1936, the year in which the German edition of the General Theory appeared. In his special introduction to the German edition, Keynes recognized how “thirsty” the Germans must be for his “general theory,” which would also apply to “national socialism.”

(From “Bastard Keynesianism: The Evolution of Economic Thinking and Policymaking Since WWII”)

Is it possible that beneath the rah-rah attitude of the Democratic Party left toward a Green New Deal, there’s not much beyond the kind of formulas encapsulated in Mongiovi’s paragraph above? All this salivating over government boards has little to do with the socialism I’ve defended since 1967. On Biden’s website, there is this:

Biden believes the Green New Deal is a crucial framework for meeting the climate challenges we face. It powerfully captures two basic truths, which are at the core of his plan: (1) the United States urgently needs to embrace greater ambition on an epic scale to meet the scope of this challenge, and (2) our environment and our economy are completely and totally connected.

At the risk of sounding like an anarchist, isn’t it time to stop dwelling on how the state can be expanded into a beneficent agent of economic and ecological change? Why not figure out how to smash the fucking state that will continue to kill us, if it remains in the hands of the bourgeoisie?

There’s a cognitive dissonance in the latest Catalyst. Probably sent to the press before the pandemic kicked in, it smacks of the Fabian habits of the social democratic left and light-years away from our grim pandemic and economic free-fall realities. The sclerotic and stultifying Dissent magazine of the 1960s and 70s being the prime example. It would be a shame if Sunkara and Chibber continue traveling down this road but we can compensate for this by getting our shit together as we used to put it in the 1960s.


  1. Was Keynes a socialist? The answer comes in the line: “Keynes never believed in the power of ordinary working people to control their own fate.” It’s hard to imagine anybody being a socialist if they don’t come to grips with the principles laid out in a pamphlet like “Their Morals & Ours”.

    Comment by Karl Friedrich — May 27, 2020 @ 6:43 pm

  2. James Crotty was at UMass-Amherst for many years. An old URPEer, he was in grad school with a very good friend of mine, with whom I taught for a long time. Harry had no use for Crotty, at least his economics. He is friendly with Bob Pollin, he of the typical social democratic views about a growth-oriented GND and how capitalism can decouple growth and energy use.

    Keynes was no radical, and it is a stretch to claim he was. Keynes had no great affection for the working class either. His father was a Cambridge economist and he had Alfred Marshall tutor Keynes, who had not studied economics. The real radical of the Keynesians at Cambridge was Joan Robinson. And then there was Sraffa, great friend and countryman of Gramsci. Unlike Alvin Hansen, Keynes had no notion of capitalism’s stagnation tendencies. And he is nowhere close to Kalecki in terms of radical insight. The main problem, however, is that Keynes had no coherent theory of the state, as Mongiovi’s review and presumably Crotty’s book show. It is the same problem the DSA elites have today. The state is more entwined with capital than ever before, with its agencies and even its parliaments and congresses filled with rich people. How can such a state be made a tribune of the people? It cannot, ever. Note too Keynes’ elitism. Why, if the government is run by the “good people,” it will function efficiently and in society’s best interests. Sure, and if wishes were fishes, we’d all cast nets in the sea.

    It is curious how so many of the 1960s radical economists, like Bowles and Gintis, Crotty, Pollin, and many others, most from upper middle-class or downright rich backgrounds, soon enough lost their radicalism and became left liberals. Some, like Michael Zweig stayed true to a radical vision. For them Marx is more than someone to be read in a graduate seminar, and radical scholarship is more than something to pad out a CV. I always remember my mentor and friend, David Houston, a URPE founder. He was born into a wealthy family in Philadelphia, but once he became a radical, he remained one. He used to make fun of the URPE Ivy Leaguers talking about their classmates and well-heeled friends, not disparagingly I might add. I asked David once how he taught Marx’s labor theory of value. Without hesitation, he said, “as the truth”!. One reason I admired Harry Magdoff and Paul Sweezy, and all of the Monthly Review stalwarts I met or read about, like Istvan Meszaros, Annette Rubinstein, Dirk Struik, and many others (often they were from the Global South, like Samir Amin and Che Guevara), is that they were ALWAYS true to a radical vision and to radical values. They weren’t people to compromise. And many, of course, suffered for their principles. David Houston was treated like a pariah at the University of Pittsburgh, was spat upon for his opposition to the War in Vietnam (unlike any returning veterans!), and had his salary frozen for years. These heroes of mine are so unlike the the DSA dreck in New York City today.

    Comment by Michael D Yates — May 27, 2020 @ 8:25 pm

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