by ISMAEL HOSSEIN-ZADEH
British economist John Maynard Keynes (1883–1946). SOURCE/Wikipedia
The Keynesian view that the government can fine tune the economy through “appropriate” fiscal and monetary policies to maintain continuous growth at or near full employment is based on the idea that capitalism can be controlled by the state and managed by professional economists from government departments, that is, capitalism run by “experts” in the interest of all. Economic policy making according to this view is largely a matter of technical expertise or economic know-how, that is, a matter of choice.
The effectiveness of the Keynesian model is, therefore, based largely on a hope, or illusion; since in reality the power or control relation between the state and the market/capitalism is usually the other way around. Economic policy making is more than simply an administrative or technical matter of choice; more importantly, it is a deeply socio-political matter that is organically intertwined with the class nature of the state and the policy making apparatus.
The Keynesian illusion has been nurtured or masked by two major myths. The first myth stems from the perception that attributes the implementation of the New Deal and Social Democratic economic reforms that followed the Great Depression and WW II to the genius of Keynes. This is a myth because those reforms were more a product of the fierce class struggle and overwhelming pressure from the grassroots than that of the brains of experts like Keynes. The harrowing socio-economic turbulence of the 1930s generated momentous social upheavals and extensive working class struggles. The ensuing “threat of revolution,” as FDR put it, and the “menacing” pressure from below prompted reform from above—independent of Keynes.
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Professor Krugman passionately writes, “Where are the big public works projects? Where are the armies of government workers?” What he fails to mention is that those “armies of government workers” were put to work not courtesy of FDR, or because of Keynes’ brilliant ideas (in fact, when the FDR administration initially embarked on the implementation of the extensive public works projects it did not even know Keynes was alive), but because much larger armies of workers and other grassroots threatened the capitalist system by persistently marching in the streets and demanding jobs. It is interesting that many Keynesian economists admirably fight (of course, in the realm of ideas) for the rights of workers but shy away from calling on them to rise up to demand their rights.
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