Re: Backed Money-Sproul/Tomasson re. Ricardo/Bentham

[Ted Winslow <winslow@xxxxxxxx>]

Title: Re: Backed Money-Sproul/Tomasson re. Ricardo/Bentham

Gunnar wrote:


> In this respect, I would not regard the mind-sets of economists - castigated 
> by Solow in his AEA Presidential Address - who deny the existence of 
> "involuntary" unemployment in the real world, as evidence AGAINST the 
> importance of logical coherence and clarity in theoretical economics.   They 
> are sour and silly to a man!

I didn't point to it as "evidence AGAINST the importance of logical coherence".  I pointed to it as an instance of "foolish consistency", i.e. an overemphasis on formal logic to the exclusion of all other criteria (showing up as an immunity to a reductio ad absurdum argument).

Keynes no where argues against the importance of logical coherence.  He argues against "foolish consistency" not against consistency per se.  The Ricardian vice has to do with "foolish consistency" and with the mistaken identification of formal logic with ontological atomism.  The latter mistake shows up as Whitehead's "fallacy of misplaced concreteness" (i.e. the neglect of the fact pointed to by Marshall that "man himself is in a great measure a creature of circumstances and changes with them" - Whitehead himself makes this point in criticism of classical economics in, among other places, Adventures of Ideas, chap. 6), as forms of deduction which treat interdependence as atomic rather than organic, and as "scholasticism"  - "the treating of what is vague as if it were precise and could be fitted into an exact logical category." (X, p. 343)  (These last two points are also in Whitehead.)

The "this" in Keynes's statement to Hicks that "if you were to go further back, how far back I am not sure, you would have found a school of thought which would have considered this an inconsistent hotch-potch" does not refer to the General Theory.  It refers to attempts to make the non-neutrality of money compatible with classical axioms. Earlier classical writers would have considered the result "an inconsistent hotch-potch" because this, in fact, is what it was.  The General Theory is an attempt to reconstruct the theory of a monetary economy so as to ELIMINATE this inconsistency.

Finally, Keynes was not a follower of Bentham.  

"We were amongst the first of our generation, perhaps alone amongst our generation, to escape from the Benthamite tradition.  ... It can be no part of this memoir for me to try to explain why it was such a big advantage for us to have escaped from the Benthamite tradition.  But I do now regard that as the worm which has been gnawing at the insides of modern civilisation and is responsible for its present moral decay.  We used to regard the Christians as the enemy, because they appeared as the representatives of tradition, convention and hocus pocus.   In truth it was the Benthamite calculus, based on an over-valuation of the economic criterion, which was destroying the quality of the popular Ideal." (X, pp. 445-6)

The phrase "Bedlamite economists" is a play on "Benthamite economists".

Best,

Ted