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Keynes, “the Good Life” and abundance

Notes for the inaugural session of Somero 2016. Manjirón, October 8, 2016

6-juan-urrutia

Good morning to everyone, and welcome to this poor mountainside in beautiful Madrid [province]. I am sorry I wasn’t able to arrive yesterday and even more sorry I won’t be able to stay and sleep here tonight. I’m sorry because “conversation” has taken on a special meaning for Las Indias, since it is both a fundamental instrument in search of Communitarianism (the Communard Manifesto largely serves this “conversation”) and a component element of the “good life.”

And, obviously, I thank the Indianos, who I feel part of, for the invitation to open the conversation of Somero 2016, where the Indianos have come together to think about this moment the world is living through, to listen to themselves and each other about how enough can be produced to create Abundance, lead to a “Good Life,” and collaborate to sustain a “Good Society.” This change between the approach to Somero 2015 and Somero 2016 is a good starting point for my talk. From ideas to revolutionize the world, we move to discuss a new world that… has not arrived yet.

Introduction

7-apertura-somero-2016Let me announce from the beginning that I may not be able to rise to the occasion of this new stage, because I don’t think that any idea emerges from my words that need introduction to a community in the clear and obvious Direct Economy (making beer for example). At best, there will be words related to teaching and learning, and to knowledge and wisdom, that try to clarify these distinctions, suggesting that perhaps two paths can be opened, i) the one that goes from teaching to learning, and ii) from knowledge to wisdom.

In any case, I’m going to try to stick to the title suggested by Las Indias, “Keynes, the Good Life, and Abundance,” and accepted by me with pleasure, and which provides three crucial conditions, since I will have to talk about three things that have been “put upon” me:

  1. Politics, trying to identify the kind of social and power relationships in which The Good Life arises, or can arise.
  2. Economy, freely explaining the future of the economic system which, if we do it well, could lead us to abundance.
  3. Keynes, someone I hold to be exemplary, as a macroeconomist and public servant in various positions—university, finance, etc. And he was a practitioner of a good life in Bloomsbury.

Politics: for a petty-bourgeois liberalism

What I’m going to to tell you under this rubric was written 25 years ago and reproduced in June of 2014. In any case, I will follow a summary that David and Natalia worked on in their day.

Fifteen years ago, I tried react against the revolutionary American neo-conservativism during the mandate of Bush, Jr., that justified the beginning of the Iraq war. To do so, I had to declare myself anti-revolutionary and petty bourgeois, a gesture that I was enthusiastic about, since neo-conservativism was “the revolution” of the moment (we remember the Azores). The bourgeoisie was identified with the unity of Big Businesses, Finance, and State, gelled by news media subjected to the power of these three institutions. I will now review the characteristics of this “counter-revolution” that proposed to face the “neoconservative revolution”:

  1. The primacy of freedom
    1. The need for individual ethics (individual responsibility)
    2. Truth before happiness (not all means are legitimate)
    3. Rebellion and experimentation (as we’ll see in Keynes)
    4. Diversity (demanded by individual freedom and the corresponding responsibility)
    5. Freedom before utility (which demands private property)
    6. The universalization of human rights, or if you prefer, “generalization,” since universalization is a issue debated among the Indianos.
  2. The primacy of individualism, which, although it may seem contradictory, puts identity ahead of individualism (we will see later that this community identity in competition maintains diversity)
  3. The primacy of spontaneous order
    1. Participatory “project-ism” (which would allow interventionism to Keynes or Stiglitz)
    2. Small, strong State (of all the forms of power, confederation is my favorite)
    3. A “functionariate” of the elite (Keynes is an example)

I have always thought that all these characteristics were to be found in Keynes.

Economy: Abundance

Once I declared that I belonged to the petty bourgeoisie (at least as a professor), it then fell to me try to convince people that, a) the best economic form is the market, b) as long as this market does not create rents, and c) it creates abundance. Once this task is fulfilled, I will be able to move on to discuss what The Good Life consists of.

Identarian community

We can only describe here in outline form how communities are formed through an evolutionary game consisting of forming pairs randomly and constantly making them play a game such that a network is formed, a process in which social habits or memes appear until a balance is arrived at in the evolutionary game, called the Evolutionary Stable Strategy, or the “mutant-proof balance,” since no one is interested in going outside the guidelines of conduct in the balance.

Fraternity and possibility of abundance

In the balance of the evolutionary game, fraternity happens, a term that includes friendship and the pleasure of being together. This fraternity has two crucial characteristics, which are mutual trust and the credibility of commitments. If the network we’re in is really distributed, we come upon the possibility of abundance because a) transaction costs decrease through mutual trust, b) the network effect, or Matthew Effect, happens, according to which, “to him who has, more will be given,” due precisely to the fact that joining a very dense network decreases costs and c) economies of scope appear, according to which, more is earned by expanding the range of products manufactured by a company than by increasing the production of a single product. At the limit, we find the balance of perfect competition in a digital world, like today’s world taken to its limit.

Problems

Before reaching the limit, however, not everything is rosy.

  1. Revolution is dependent on the threshold of rebellion of the epistemic condition (or, who knows, common knowledge at its limit) and the density of the network. Example: in conservative communities, revolution is easier the less dense the network is, as in England.
  2. The Communal. This a good that is non-rival in consumption but suffers from exhaustability. The market treats these semi-public goods and existing solutions as bad, unless they are perfect and local. As the increase in digital goods increases the volume of these goods, the kingdom of abundance is not so easy to reach, generally, and meanwhile, bad solutions are created, such as a) laws on intellectual property, b) funding of knowledge through public money, or c) disincentives on the rankings of scientists.
  3. Dissipation of rents. As no one has any monopoly power in perfect competition, because the threat of simply going away is credible, there are no rents in it. But even in that case, the State could create them in favor of the powerful. As an example, let’s think about the financial beach bars of so-called “fintech,” which could reduce part of the power of banks and wait to see how that possibility evolves. Also, we should remember the distinction between pleasure, produced by struggle, and comfort, created by enjoyment (Hirschman).

“The good life” and “the good society”

The problem with translation

I want identify the way of life to which I think a commoner aspires. I’m going to call it “The Good Life” [English words used in the original Spanish text], but immediately I find myself “Lost in Translation.” A “Good Society” is a set of individuals that lead a “Good Life.” Then, if I want know how translate a “Good Society” I have to translate first “Good Life.”

It has been tried many times. Sometimes as the good life (in the sense of holding to a good life), sometimes as a good life (the opposite of a bad life, like that of a criminal, let’s say).

I dare to try define the meaning of “The Good Life”:

The Good Life denotes a way of life that includes a certain care with things, living or dead, that surround us, so that they will remain there; an absence of abuse of things or self; a certain modesty (or only a small degree of arrogance) in the attitude towards life, except when facing the powerful.

Therefore, a good translation could be a dignified life, or full, or modest, or collected. I’ll stick with a dignified (or full) life, which I think can only be exercised in petty bourgeois liberalism.

Accordingly, I suggest that we translate “The Good Society” as a worthy society which, naturally, would include equality of opportunities.

The Bloomsbury Group

This group, so strange to us, can be the real corollary of what I now call petty bourgeois liberalism. The mix was very heterogeneous, because it included people like Virginia Woolf, J.M. Keynes, B. Russell, and others with highly variable positions and practices; but everyone had some common characteristics, such as a) pride in their education, b) a break with Victorian classicalism and c) pride in being light to the world.

Its situation in the world was, in some sense, like ours today, given technological changes and the need to reinvent themselves. Keynes belonged to this group, which met at home of the Bell sisters in Russell Square. Only this way can it be understood that he wrote The Economic Possibilities for Our Grandchildren, whose subtitle in Castillian Spanish is “What is Needed for a Good Life?” while in the original, “…for a Good Society” is used, which brings us back again to the problem of translation. In any case, it should be clear by now that a “Good Society” includes self-realization of the individual members that it is made up of.

Quantification of the Good Society

The two Skidelskis (Robert and Edward, father and son) make an effort to quantify the income necessary for a family to lead a “Good Life.” But they themselves say that this quantification is not very important: “Progress should be measured not by the traditional yardsticks of growth or per-capita income;” but by the seven elements of a “good life” or full life. These yardsticks are 1) health, 2) security, 3) respect, 4) personality (individual identity, perhaps “being someone”?), 5) harmony with nature, 6) friendship (fraternity) and 7) leisure.

In any case, I hurry to say that these are not the pillars of wisdom but only some ideas we will never be able to stop talking about in a community. Let us look at two qualified opinions on education, related, without a doubt, to several of the yardsticks. Phelps:

We will all have to turn from the classical fixation on wealth accumulation and efficiency to a modern Economics that places imagination and creativity at the center of economic life.

And Sen recalled that debates were the teaching methodology in the old University of Nalanda (the oldest in the world).

I dare to conclude this section saying that education must focus on values associated with the Humanities, in which efficiency and wealth do not stand out as much as happiness and the meaning of work well done, which are only acquired in an institution in which the primary consideration is learning through debate, without so much emphasis on study, which seemed to be so necessary in the last century.

Final Comments

And to finish, I’m going to limit myself to highlighting that Keynes and his teachings illustrate everything that he tried explain on the topics of liberalism, abundance, and the worthy life. I am going to do so by providing some quotes, both from John Maynard himself, and from Joaquín Estefanía in his lengthy introduction to the essays on persuasion by the master.

Estefanía

The academic economy did not stimulate his inventiveness, but the great problems of the applied economy and their discussion were able to drive his passion; then he set in motion his great intellectual faculties and his qualities of persuasion.
p.37.

I will not try to improve on Estefanía, but I want make it clear that we should clarify if there really is a distinction between a) applied economy vs. academic economy, b) inventive vs. intellectual faculties, and c) political persuasion vs. academic persuasion.

His scholars remind us over and over that for our author, the “good life” is the sole rational objective of economic effort; the rest—the deficit, debt, inflation and deflation—mere intermediate and instrumental stages.
p.51

This quote raises two concerns for me: a) to limit oneself to quoting only macroeconomic problems as topics of economic studies is not adequate, although the same affirmation would be appropriate even if he had added microeconomic issues. b) To what extent is the “good life” Estefanía refers to is specific to Bloomsbury?

Keynes

In the essay “Am I a liberal?”:

In a period of extreme abundance there is the maximum of individual liberty, the minimum of coercive control through government, and individual bargaining takes the place of rationing.

It’s not well-written, but it fits with my political talk, and what it means is that in the kingdom of abundance, we can live without spending all day thinking, and that lets us live the “good life.”

We have to invent new wisdom for a new age. And in the meantime we must, if we are to do any good, appear unorthodox, troublesome, dangerous, disobedient to them that begat us.

Here, it is fitting to remember the distinctions we’ve made between an education that, at another level, is Kontraren Kontra [contrarian] (although we are).

In “The Economic Possibilities for Our Grandchildren“:

The strenuous purposeful money-makers may carry all of us along with them into the lap of economic abundance. But it will be those peoples, who can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life, who will be able to enjoy the abundance when it comes.

Here, I would like to recall a detail personal. The economic wisdom of our parents, at least of my father: never spend your equity, and spend the interest on it very wisely.

The course of affairs will simply be that there will be ever larger and larger classes and groups of people from whom problems of economic necessity have been practically removed.

Abundance will arrive, but little by little, and by socioeconomic levels. And only as long as the rich do not abuse it by creating rents.

Conclusion

If I had to single out something from what has been said so far, I’d choose an implication that is not at all obvious, and, really, I haven’t said anything about. Namely, “performativity.” And I’ve built myself a quote, as if this idea of mine was memorable: When people are prepared to live in abundance, true abundance (not foolish waste), then it will happen.

If I am right, our task as communards is to build a new way of life.

Translated by Steve Herrick from the original (in Spanish)

«Keynes, “the Good Life” and abundance» recibió 1 desde que se publicó el miércoles 12 de octubre de 2016 . Si te ha gustado este post quizá te gusten otros posts escritos por Juan Urrutia.

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