The long run

Bizarre controversy about Keynes’ remark that “in the long run we are all dead”.  The historian Niall Ferguson told a recent conference that Keynes said this because he was gay, had no children, and was indifferent to the future.  He has since apologised for the remark, and not just because it suggests gay people don’t care about the future but because of the inaccuracy about Keynes.  Keynes was part of the Bloomsbury set, and had homosexual affairs when he was young.  However, he later married the Russian ballerina Lydia Lopkova, and had a long and loving marriage during which his wife suffered a miscarriage.

However, this isn’t the point.  Keynes famous remark did emphatically not mean “let’s do irresponsible things now because we won’t be around when their consequences hit”.  He said it because he was despairing of conventional economists in the 20s and 30s who said that a market economy was self-correcting, and the slump would naturally come to an end sooner or later.  Let’s look at the full sentence:

The long run is a misleading guide to current affairs. In the long run we are all dead.  Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is past the ocean is flat again. (Tract on Monetary Reform 1923)

Life, John Lennon once remarked, is what happens when you’re making other plans.  The economy is, similarly, made up of a series of short term periods affected by one-off events – an oil shock, a bad winter, the end of the cold war, US mortgage problems, an election, a bank failure in Austria or Cyprus.  Keynes was surely right to be exasperated by idea that it was helpful – let alone a sign of great economic wisdom – to say that all will be well in the end.

Why does this matter, apart from defending the reputation of a great man who worked himself to death for our country ?  Because the current crop of right wingers who are doing nothing to bring prosperity and employment back to our economy are saying that all will be well in the end, despite the fact that we have a slower recovery from the slump than happened in the 1930s. And their ostensible reason for inactivity is that it would be irresponsible to raise the finance needed for economic revival.  Echoes of debates that were settled in the 1920s and 30s: bizarre is the right word.

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