- Thinking the Unthinkable: Think-Tanks and the Economic Counter-Revolution, 1931-83 by Richard Cockett
HarperCollins, 390 pp, £25.00, May 1994, ISBN 0 00 223672 9
The most famous words Keynes wrote – apart from the ones pointing out that in the long run we are all dead – were the concluding sentences of the General Theory:
the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.
Keynes’s thesis about the seminal influence of ideas not only appeared in the General Theory, it was exemplified by it, through the influence subsequently attributed to the book. Keynes had explicitly intended it to change the way the world thought about economic problems, and by the time of his death in 1946 he had apparently fulfilled his most extravagant hope (or hype). The next quarter-century became an era of Keynesian triumphalism. Academics thumbed through the General Theory as though citation of the appropriate text was sufficient authority to settle any argument. Policymakers promiscuously but confidently invoked Keynesian sanction. The common assumption was that error had given way to wisdom, or at least stupidity to cleverness – as it was bound to, sooner or later. An enlightened generation, scorning its deluded predecessors, blithely celebrated its own privileged access to the truth.
With hindsight this clearly signals hubris, since we know that there was to be more than one nasty surprise around the corner. The General Theory abruptly ceased to be compared with Newton’s Principia or Darwin’s Origin, those revolutionary texts generated by illustrious Cambridge predecessors. Instead, its scientific status came to seem comparable with that of an equally celebrated breakthrough originating among Keynes’s Sussex neighbours – Piltdown Man. Yet the reasons for these puzzling changes in intellectual fashion have to be understood in a context which is more than intellectual. It was the long post-war boom, with historically unprecedented levels of employment, which formed the pedestal on which the statue of its patron saint reposed. When the pedestal crumbled, the statue tumbled.
The General Theory’s claim about the importance of ideas surely masked – indeed, hardly bothered to mask – a further claim about the status of those who generate the right kind of ideas. If it was an old notion that the philosopher was best fitted to be king, the new twist was that the economist was now disclosed as the real boss. Here was a happy prospectus for Keynes’s own profession, and one borne out by post-war experience. The Keynesian injunction that government had a responsibility to create jobs took tangible shape in the jobs it proceeded to create for economists. The World, it soon seemed, was ruled by little else, or at any rate nobody else.
The full text of this book review is only available to subscribers of the London Review of Books.