Book review: John Maynard Keynes by Hyman Minsky

The following is my review (a rather glowing one) of Dr Hyman Philip Minsky’s book on John Maynard Keynes, from Goodreads. I had posted an excerpt from this book, a quote from some of its source material, and another from one of its present-day heterodox disciples yesterday. I hope the following review may go some way toward explaining and perhaps even excusing some of my recent enthusiasm.

This book is simply, utterly, devastatingly hands-down brilliant.

Hyman Minsky, in undertaking this overview of the thought and intellectual legacy of John Maynard, Baron Keynes, asks us no less than to consider the following. He asks us to consider that the shape of the modern economy—with its treadmill of conspicuous consumption, environmental destruction, runaway military-industrial spending and intensifying bubbles of speculation disconnected from any real source of value—essentially takes Keynes’s name in vain. Although Keynes is in many respects considered the author of this economic order via the so-called ‘neoclassical synthesis’, Minsky argues persuasively that, given the direction of his theorising toward the end of his life, Keynes would have regarded our present economy with horror and alarm.

Minsky argues that the several attempts by various of Keynes’s disciples in the postwar Anglo-American sphere to reconcile his thinking with the ‘classical’ view of economy that prevailed among the liberal circles of his day, have the effect of watering down or even obviating the observations that Keynes was attempting to make about the operation of capitalism in his General Theory of Employment. The attempts to synthesise Keynes’s insights with the classicalist objects of his critiques have resulted in a ‘Keynesianism’ which undertheorises investment, removes his central thesis about the uncertainty of the future, and obscures his concerns about the foundations of financial markets being based on processes and moods (the infamous ‘animal spirits’) which are essentially irrational.

Minsky attempts to retrieve from the General Theory, a view--one imperfectly realised by Baron Keynes within his own corpus—of Keynes’s key concerns and the direction of his theory toward the ‘euthanasia of the rentier’. Minsky presents us with a Keynes who, for genuinely humane and altruistic reasons against the interests of his class, truly desired an economy where the working class could enjoy some degree of leisure and higher culture; and one in which the incomes earned from rents or quasi-rents would be gradually starved off.

Unfortunately, the usage of the tools of regulation and government intervention in the economy which were undertaken in his name had the exact opposite effect of the one he seems to have intended to bring about. The modern ‘Keynesian’ economy is one in which inequality has ballooned, the working class is burdened with greater stress and lower pay and harsher workloads, and the capital gains of the wealthy are protected and even subsidised in law (through, among other things, the military-industrial complex).

The entire book is excellent. My one nit-pick is that the middle chapters do get pretty far into the weeds with their explorations of the various mathematical models which comprise both the neoclassical synthesis and Minsky’s heterodox interpretation of Keynes. For patient readers who are not econometricians or economic specialists, however, the conclusions of each chapter do a satisfactory job of recapitulating the core concerns in plain language. This book is more than worth your time to read.