Keynes: Return of the Master by Robert Skidelsky. Few years ago when I first read Hayek's Road to Serfdom, I was all pumped up (which to a certain extent explains the cognitive misers on cable news). I am so glad for not having read Keynes then. Reading him now after living through(in) a recession helps not only comprehend but also harmonize Keysian economics with reality. Being still a student, I am not qualified to "gauge" his economics. Here are few lessons...
I am sucker of anyone who changes their mind with experience (read "wisdom" not "dissonance").
"As he grew older and grew up, Keynes realized that he had been wrong. In 1938, looking back at his early beliefs, he admitted to having had a ignored the insane and irrational springs of wickedness in most men, and the dependence of civilization on rules and conventions skillfully put across and guilefully preserved. On another aspect of those early beliefs, the rejection of Benthamite calculus, he remained unrepentant. Benthamism was the worm which has been gnawing at the insides of modern civilization and is responsible for its present moral decay."
"As he grew older and grew up, Keynes realized that he had been wrong. In 1938, looking back at his early beliefs, he admitted to having had a ignored the insane and irrational springs of wickedness in most men, and the dependence of civilization on rules and conventions skillfully put across and guilefully preserved. On another aspect of those early beliefs, the rejection of Benthamite calculus, he remained unrepentant. Benthamism was the worm which has been gnawing at the insides of modern civilization and is responsible for its present moral decay."
One of the root cause of malaise in economics is the perpetuation of self-delusion after one get's lost in the mathematical "elegance".
"I have a view of people who devote so much effort working out the implications of assumption which almost no ordinary people would find other than nonsensical if they understood them. Freshwater economics uses difficult mathematical tools. Students in freshwater graduate programs have to learn a huge amount of math very fast. It is not possible to do so if one doesn't set aside all doubts as to the validity of the approach. Once the huge investment has been made it is psychologically difficult to decide that it was wasted. Hence the school gets new disciples by forcing students to follow extremely difficult courses... If my information is not out of date, innocents from abroad are the new blood of fresh water economics."
-Robert Waldman
"The study of those economic activities in which our views of the future are... reliable in all respects and the study of those in which our previous exceptions are liable to disappointment and expectations concerning the future affect what we do today."
Keynes on the difference between uncertainty and risk.
"Economics is a moral and not a natural science: that economist should be mathematician, historian, statesman and philosopher... in some degree, and that no part of man's nature or his institutions must be entirely outside his regard."
"I have a view of people who devote so much effort working out the implications of assumption which almost no ordinary people would find other than nonsensical if they understood them. Freshwater economics uses difficult mathematical tools. Students in freshwater graduate programs have to learn a huge amount of math very fast. It is not possible to do so if one doesn't set aside all doubts as to the validity of the approach. Once the huge investment has been made it is psychologically difficult to decide that it was wasted. Hence the school gets new disciples by forcing students to follow extremely difficult courses... If my information is not out of date, innocents from abroad are the new blood of fresh water economics."
-Robert Waldman
"The study of those economic activities in which our views of the future are... reliable in all respects and the study of those in which our previous exceptions are liable to disappointment and expectations concerning the future affect what we do today."
Keynes on the difference between uncertainty and risk.
"Economics is a moral and not a natural science: that economist should be mathematician, historian, statesman and philosopher... in some degree, and that no part of man's nature or his institutions must be entirely outside his regard."
Keynes was optimistic about the human nature and was expectingn immensely moral changes within a century. He was obviously wrong. May be, I am more pessimistic. Morality in economics is an oxymoron. To put it blandly, there is no "incentive" to be moral in economics leave alone human nature. I hope, I am wrong. But yet, civilization does progress only because of sacrifices, struggles and moral honing of very few people every generation. We should be indebted to them for everything we had, have and will have.
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