Re: Keynes and the balance of payments (1946)

["Colin Danby" <danbyc@xxxxxxx>]

I'd agree strongly with Ted and add a slightly more PE gloss.  Smith assumes
a more-or-less feudal society, with approrpriate values and mores and a very
clear class structure, which tells people how to behave.  This is what
provides stability.  To a degree Smith's psychology is also a way of talking
about class.  (The kind of psychology he does also bespeaks Smith's
strenuous effort to develop a theory that did not rely on individual
rationality, something little-appreciated today.)

Keynes, especially the late Keynes, is very much in tune with Smith's
conservatism along these lines -- Skidelsky was right to emphasize the
Burkean aspect of Keynes' thinking.  Stability can be traced to convention
and habit (I'm reading King's _Conversations with Post Keynesians_ and Dow,
on page 157, makes the point nicely).  You can think of the consumption
function for example as having a psychology or a class basis.

Best, Colin