Keynes: The Return of the Master [Hardcover]

Robert Skidelsky (Author)

Book Description

Publication Date: September 14, 2009

The ideas of John Maynard Keynes have never been more timely. No one has bettered Keynes's description of the psychology of investors during a financial crisis: ‘The practice of calmness and immobility, of certainty and security, suddenly breaks down. New fears and hopes will, without warning, take charge of human conduct… the market will be subject to waves of optimistic and pessimistic sentiment.'

Keynes's preeminent biographer, Robert Skidelsky, Emeritus Professor of Political Economy at the University of Warwick, brilliantly synthesizes from Keynes's career and life the aspects of his thinking that apply most directly to the world we currently live in. In so doing, Skidelsky shows that Keynes's mixture of pragmatism and realism – which distinguished his thinking from the neo-classical or Chicago school of economics that has been the dominant influence since the Thatcher-Reagan era and which made possible the raw market capitalism that created the current global financial crisis – is more pertinent and applicable than ever. Crucially Keynes offers nervous capitalists – and Keynes never wavered in his belief in the capitalist system – a positive answer to the question we now face: When unbridled capitalism falters, is there an alternative?

"In the long run," as Keynes famously said, "we are all dead". We may not have time to wait for the perfect theoretical operation of capital as the neo-classicists insist will happen eventually. In the meantime, we have Keynes: more supple, more human and more magnificently real than ever.

Editorial Reviews

Review

Paul Krugman,Observer(UK)
“An important contribution at a time of soul-searching, a must read even if one doesn’t fully accept its conclusions…. This is a wonderfully stimulating book, one that reflects the author’s unparalleled erudition. We’re living in the second Age of Keynes—and Robert Skidelsky is still the guide of choice.”

Richard A. Posner,The New Republic
“Skidelsky’s summary of what is distinctive in Keynes’s theory is excellent.”

Roy Hattersley,Guardian(UK)
“Wonderfully lucid…. Ought to be considered required reading for every prospective minister.”

BusinessWeek
“Explaining the present-day relevance of [Keynes’] theories is executed superbly by Skidelsky…. Skidelsky’s book excels. It’s a passionate polemic that makes a strong case for economists and policymakers to reread their Keynes.”

Charles R. Morris,Commonweal
“A profound and beautifully written meditation on the dangers of bad ideas, readily accessible to anyone who isn’t mystified by the headlines in theWall Street Journalor theEconomist.”

James Srodes,Washington Times
“Valuable…. A neat synthesis: a first-rate short biography for those who have avoided knowing the man behind the myth until now; a clearly written and accessible timeline of just how and why the current crisis broke upon us; and a clearly stated argument for why Keynes was both right and why his precepts must be followed once again.”

Mind
“Elegantly written and persuasively argued.”

Charles R. Morris,Commonweal
“A profound and beautifully written meditation on the dangers of bad ideas, readily accessible to anyone who isn’t mystified by the headlines in theWall Street Journalor theEconomist.”

James SrodesWashington Times
“Valuable…. A neat synthesis: a first-rate short biography for those who have avoided knowing the man behind the myth until now; a clearly written and accessible timeline of just how and why the current crisis broke upon us; and a clearly stated argument for why Keynes was both right and why his precepts must be followed once again.” 

Mint
“Elegantly written and persuasively argued.”

About the Author

Robert Skidelsky is Emeritus Professor of Political Economy at the University of Warwick. His three volume biography of the economist John Maynard Keynes (1983, 1992, 2000) received numerous prizes, including the Lionel Gelber Prize for International Relations and the Council on Foreign Relations Prize for International Relations (‘This three-volume life of the British economist should be given a Nobel Prize for History if there was such a thing' – Norman Stone). He is the author ofThe World After Communism(1995). He was made a life peer in 1991, and was elected Fellow of the British Academy in 1994.

Product Details

• Hardcover: 240 pages
• Publisher: PublicAffairs; 1 edition (September 14, 2009)
• Language: English
• ISBN-10: 1586488279
• ISBN-13: 978-1586488277
• Product Dimensions: 6.1 x 1 x 9.3 inches
• Shipping Weight: 1 pounds
• Average Customer Review: 4.1 out of 5 stars  See all reviews (39 customer reviews)
• Amazon Best Sellers Rank: #632,881 in Books (See Top 100 in Books)

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Most Helpful Customer Reviews

136 of 143 people found the following review helpful

5.0 out of 5 stars What can we learn from Keynes? September 9, 2009

By Dirk

Format:Hardcover

Robert Skidelsky is the biographer of John Maynard Keynes and a historian with some background in economics. He divided his book in three parts. In the first part, he examines what went wrong and what this says about the present state of economics. He attacks the rational expectations hypothesis, real business cycle theory and the efficient (financial) markets theory. The main criticism is on the assumption of "Bell-Curve Economics", which describes theories that are based on Gaussian probabilities.

Part II is entitled "The Rise and Fall of Keynesian Economics" and describes Keynes and his economics in the context of the Great Depression. On p. 111-3, Skidelsky points out the difference between today's mainstream macroeconomics and the idea of Keynes. Some of these points could be argued with more clarity. Skidelsky fails to point out the implication of accepting Gaussian probabilities in financial markets, which is that financial markets can not be a source of "instability". However, this implication is probably clear to most economists and Skidelsky writes about this elsewhere (p.44).

In part III, The Return of Keynes, Skidelsky focuses mostly on philosophy and political economy. I reckon that this is the most interesting part of the book for most readers. Skidelsky raises "the old question of whether ideas are part of the base or the superstructure of social life - society's building blocks or weapons in the struggle for power." (p.115) and then continues to compare the ideas and performance of the Keynesian Bretton Woods System (1951-1973) with that of the neoliberal Washington Consensus System (1980-now).

This is followed by a chapter on the ethics of Keynes. Based on the philosopher G.E. Moore, Keynes ponders first the question on ethics "What is good?..." and then follows up with questioning morality: "How ought I behave?" (p. 136). Skidelsky thinks that we do not think about the ethic question anymore, and therefore the pursuit of money is all there is: "What should have been a means has become an end", he writes about acquiring money (p.142). Some pages later (p. 187) Keynes ia quoted on what can be understood as a critique of today's market-led globalization: "So, in conclusion, 'Ideas, knowledge, art, hospitality, travel - these are things which should in their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible and above all let finance be primarily national."

Summing up, this book reopens forgotten discussions which either still are or have again become relevant. What is the role of the government, of the private sector, of households? How does the international situation play out, how is power projected into the international arena? What are we striving for as human beings, and what is the role of markets in the pursuit of happiness? I am sure many economists will not like this book because they think these questions to be irrelevant and outside the realm of economics. However, reality-based economists will surely find lots of value in this timely book and perhaps the legacy of Keynes is a collection of very relevant questions to which each generation needs to find its own answers. Read more ›

42 of 46 people found the following review helpful

5.0 out of 5 stars Economic Theory For the Rest of Us December 6, 2009

By J. W. Dernetz

Format:Hardcover|Amazon Verified Purchase

An excellent read for those who, like me, want a refresher on economic theory from Adam Smith to Paul Krugman. Skidelsky may be the ultimate authority on the life and work of John Maynard Keynes, having written a three-volume biography on the English philosopher turned economist, but his writing style is clear, lucid and full of information. He writes not just about Keynes, the revolutionary philosophical thinker who figured out how to counteract economic downturns, but puts Keynes's theories into perspective with easily understandable descriptions of the development of economic thinking from Adam Smith to today's headlines. Whether you agree with Keynes' theories or not, you cannot help but benefit from this penetrating survey of the history and theories of capitalism. And you just might gain some insights into the causes of the current economic problem and its solution.

35 of 40 people found the following review helpful

5.0 out of 5 stars Required reading? October 12, 2009

By algo41

Format:Hardcover|Amazon Verified Purchase

Skidelsky argues, that like Keynes, all prospective economists should study ethics, philosophy, and political economy. I would go further, and say that society would benefit if the chapter on "Keynes and the Ethics of Capitalism" were required reading by everyone with sufficient education to comprehend it. The book has concise, insightful analyses of the current economic crisis and of the Great Depression. As a college student of the 1960's, who learned Keynesian economics through the introductory Samuelson text, I learned very little about economic theory that I didn't know, but I blame this on the profession, not Skidelsky. Not emphasized then was that the government and Federal Reserve have to be very wary of the impact of their decisions on inflationary expectations. Those readers who have read Taleb's book "The Black Swan" will find several of Taleb's ideas here, and he is referenced several times, once incorrectly (p.43) - but the importance of uncertainty as contrasted to probabilistic risk turns out to be a central idea of Keynes.

8 of 8 people found the following review helpful

4.0 out of 5 stars Suggestive of Simon's "Bounded Rationality" February 21, 2010

By Thomas J. Hickey

Format:Hardcover

Not surprisingly the recent world financial crisis has spawned a surge of books. Robert Skidelsky's book is more insightful than most. He is Professor Emeritus of political economy at the University of Warwick, England, and has previously written a three-volume biography of Keynes.

His book views the crisis through the spectacles of Keynesian economics. It manifests the author's considerable erudition in history of economics, and shows much refreshingly independent thought. Skidelsky's expressed agenda is the reform of economics and the teaching of economics.

Skidelsky maintains that economics has given a poor account of origins of the recent financial crisis, because there is something essentially incompatible between the economist's view of individual rationality and the systemic financial collapse. His chief argument is that underlying the escalating succession of recent financial crises there is a failure of economics to take uncertainty seriously and to cover up this neglect by means of sophisticated mathematics and statistics including econometrics.

Contrary to rationality in which all risks can be correctly priced such that financial markets are optimally self-regulating, economic choices are governed by conventional rather than rational expectations. Conventional expectations involve irreducible uncertainty with its "black swans" - bubbles inflated by positive feedback followed by collapse.

Skidelsky never references Nobel laureate economist and political scientist Herbert Simon. But his view of Keynes is in certain respects suggestive of Simon's thesis of bounded rationality.... Like Simon, Skidelsky rejects the now discredited rational-expectations and efficient-market theses of the "New Classical" economics, which he says is also assumed by the "New Keynesians", who are not faithful to Keynes' thought. For more on Simon see his book Models of Bounded Rationality: Economic Analysis and Public Policy (Volume 1) and his "Economic Rationality" in his book The Sciences of the Artificial - 3rd Edition, where Simon discusses price bubbles.

Also google my web site, History of Twentieth-Century Philosophy of Science, and see especially BOOK VIII, pp. 52-54. Read more ›