The mystery of the Keynesian Revolution

Here is another book just published about the Keynes, this one, Reinterpreting The Keynesian Revolution by Robert Cord. This is what it’s about.

Various explanations have been put forward as to why the Keynesian Revolution in economics in the 1930s and 1940s took place. Some of these point to the temporal relevance of John Maynard Keynes’s The General Theory of Employment, Interest, and Money (1936), appearing, as it did, just a handful of years after the onset of the Great Depression, whilst others highlight the importance of more anecdotal evidence, such as Keynes’s close relations with the Cambridge ‘Circus’, a group of able, young Cambridge economists who dissected and assisted Keynes in developing crucial ideas in the years leading up to the General Theory.

However, no systematic effort has been made to bring together these and other factors to examine them from a sociology of science perspective. This book fills this gap by taking its cue from a well-established tradition of work from history of science studies devoted to identifying the intellectual, technical, institutional, psychological and financial factors which help to explain why certain research schools are successful and why others fail. This approach, it turns out, provides a coherent account of why the revolution in macroeconomics was ‘Keynesian’ and why, on a related note, Keynes was able to see off contemporary competitor theorists, notably Friedrich von Hayek and Michal Kalecki.

There are many reasons why it happened, but there is this for starters: if you say to kids that the best way to grow up strong and healthy is to eat lots of chocolate cake you will need to do very little convincing. You will actually ruin their health, but they won’t know that until they have tried it for themselves.

My own contribution to this issue of why Keynes with this theory at that time is to point out that Keynes was reading Malthus’s letters to Ricardo at the bottom of the Great Depression at the end of 1932 while preparing his “Essay on Malthus” for his Essays in Biography that was published at the start of 1933. And there, in the midst of Malthus’s letters, he discovered the general glut debate of the 1820s and Malthus’s arguments attributing recessions and unemployment to demand deficiency. So obvious is this sequence that it remains the most mysterious of all of the mysteries I have encountered in my dealing with Keynes and the Keynesians that not only do they not accept that reading Malthus had any effect on Keynes’s thinking, they will not even consider it as a possibility. But that’s how it happened, and the more evidence I have the more resolutely it is ignored. If you want to look at the sociology of science in relation to Keynes, that is where I would start.