Friday, October 29, 2010

Keynes: The Return of the Master, by Robert Skidelsky (Penguin)

Don’t blame bankers, credit-rating agencies, hedge funds, regulators or governments for the Great Recession, Skidelsky says. At root it was “a failure of ideas”. The New Classical economists believed markets were relatively stable and “internally self-correcting”, whereas the New Keynesians warned that markets are unstable. “Keynes is back in fashion,” Skidelsky declares, but the general election came between the hardback and this revised paperback. Now George Osborne is in charge and he is ideologically opposed to Keynesianism. A man of formidable intelligence (he made Bertrand Russell feel stupid), Keynes believed capitalism was the best guarantee of civilisation, but a capitalism governed by “gentlemanly codes of behaviour” rather than dog eat dog. In this brilliant short guide to the financial crisis, Skidelsky argues that economists must regain some moral bearings. “What is economics for?” Keynes dared to ask. “How does economic activity relate to the ‘good life’?” The pursuit of wealth, he concluded, should not be an end in itself – the end being to live “wisely, agreeably and well”.


Tomsk said...

Keynes was certainly brilliant but I don't this book is. It felt like it had been written in a rush and seems to think that the way to improve economic models is not to bother with economic models. I'd recommend Paul Krugman's "The Return of Depression Economics" for a more coherent popular guide to the financial crisis.

(Here are my reviews of Skidelsky and Krugman if you're interested).

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