Keynes, Friedman and champagne
By Alberto Mingardi
Zachary Carter has written a biography of John Maynard Keynes that has been widely reviewed.
He is not – as opposed to Robert Skidelsky, Keynes’s master biographer – an economist and a scholar- but a journalist (a senior reporter at HuffPost). His work has received positive reviews. In the Wall Street Journal, Benn Steil pointed out that Carter’s book is at the same time a biography of Keynes (and he liked it as such) and a rant against neoliberalism (with few if any original ideas). He writes: “Mr. Carter seems to believe that Keynes, were he alive today, would be advising Sen. Bernie Sanders.”
Carter has an interview in the Washington Post. The interview is dense and interesting, but I was particularly struck by this passage:
I think we lose track of the fact that Friedman and Keynes had different social visions. They weren’t just arguing across the generations about which policies would best create the same desired result. They were arguing about what kind of world they wanted to live in. And the mathematicization of economics in the 20th century really obscures this deeper ideological conflict, often by design. Keynes wanted everyone to live in the Bloomsbury of 1913, having their hair cut by Virginia Woolf while drinking champagne and debating post-impressionism with Lytton Strachey. Friedman wanted to preserve these activities as the exclusive domain of the wealthy. Why be rich if you can’t live a better life than the masses? To which Keynes would counter: Who cares about the masses when you are drinking champagne with Virginia Woolf?
Carter is spot on on Keynes, but not so much on Friedman. For one thing, from what I know about Milton Friedman (David Henderson can certainly correct me if I’m wrong), I cannot see him particularly enjoying debating post-impressionism with Lytton Strachey. The more important point is that under Milton Friedman’s social vision you do not have a *right* way to live, to which people should aim to adhere. Keynes thought that a life worth living was a life spent having champagne with Virginia Woolf; Friedman thought that some people simply prefer fish and chips and there’s no problem with that. This does not mean that Friedman wanted to keep something “the exclusive domain of the wealthy” nor that he was indifferent to education as a means to climb the social ladder. He was not. Actually Friedman wanted the poor to get the best education they could and, precisely for that reason, he wanted market-like mechanisms in education too (the school voucher). But Friedman did not assume that people want to enroll in universities to read Catullus, Shakespeare, or for that matter Keynes or Friedman. Some of us appreciate and value these things, but others do not. Most people indeed care for a degree in order to be able to find a better paid job.
I suppose Friedman would defend basic literacy and numeracy also as part of a healthier democratic life (“people who can read the daily paper are less likely to be fooled by government” is a standard classical liberal argument, though I am afraid a more dubious one than our forerunners thought). But he would not like to turn everybody into an intellectual because, guess what, most people do not want to become one. I think this is a clear cut difference between the sort of attitude Friedman personifies and the sort of attitude Keynes personifies. One is happy with human beings as they are; the other is not. This pre-political understanding of people can explain lots of differences in the nuts and bolts of public policy.