By Robert Skidelsky

Keynes: The Return of the Master
Editions:Paperback: € 16.60 EUR
ISBN: 9780141043609
Pages: 256

In the debris of the financial crash of 2008, the principles of John Maynard Keynes—that economic storms are a normal part of the market system, that governments need to step in and use fiscal ammunition to prevent these storms from becoming depressions, and that societies that value the pursuit of money should reprioritize—are more pertinent and applicable than ever. In Keynes: The Return of the Master, Robert Skidelsky brilliantly synthesizes Keynes career and life, and offers nervous capitalists a positive answer to the question we now face: When unbridled capitalism falters, is there an alternative?

About Robert Skidelsky

Robert Skidelsky is a professor at the department of economics of the University of Warkick that specializes in economic history. Among others he has written a major, award-winning, three-volume biography of the economist John Maynard Keynes.

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Reviews:Richard N. Cooper on Foreign Affairs wrote:

"The author of the authoritative three-volume biography of John Maynard Keynes provides here a welcome short introduction to Keynesian economics, which he argues is still relevant to the modern U.S. economy. Keynes specified three important contentions. First, uncertainty needs to be taken seriously in modern economics, and this fundamental uncertainty -- the unknown unknowns -- cannot be adequately captured with the statistical techniques fashionable in the study of economics. Second, once dislodged from a satisfactory state, modern economies cannot be relied on to return smoothly and automatically to that state -- at least not quickly enough to be politically tolerable. Third, civilization cannot thrive if efficiency and moneymaking are held as its highest values. The book offers clear and cogent critiques of modern macroeconomic thought, along with a brief but useful summary of what went wrong in 2007-9."

Paul Krugman on The Guardian wrote:

"The book is part critique of the current state of economics, part biographical sketch (it's worth your time just for Chapter 3, 'The Lives of Keynes'), part programme for the future. It also offers a brief but compelling account of the anti-Keynesian counter-revolution, the movement that began with Milton Friedman and reached its apex with Lucas's whispers and giggles. Skidelsky's book is an important contribution at a time of soul-searching, a must read even if one doesn't fully accept its conclusions. As you might guess, I do, in fact, have some questions about Skidelsky's conclusions, though not so much about how we got here as about what we do next. And those questions, in turn, centre on a long-running dispute over what Keynesian economics are really about. [...] You don't have to agree with everything Skidelsky says to find this a wonderfully stimulating book, one that reflects the author's unparalleled erudition. We're living in the second Age of Keynes – and Robert Skidelsky is still the guide of choice."

N. Gregory Mankiw on The Wall Street Journal wrote:

"In his preface, Mr. Skidelsky says that he is a historian, not an economist. The book bears out the claim, in both its strengths and weaknesses. Mr. Skidelsky is most engaging when he draws on his biographical work. [...] But most of Keynes is devoted to ideas, not history, and here Mr. Skidelsky is not playing his strong suit. To economists his discussion of macroeconomic theory will seem pedestrian and imprecise. To laymen it will seem abstract and hard to follow. As an ardent fan, Mr. Skidelsky fails to give Keynes's intellectual opponents their due. [...] Mr. Skidelsky would like to think that his math-aversion allows him to focus on the big ideas rather than being distracted by mere analytic details. But mathematics is, fundamentally, the language of logic. Modern research into Keynes's theories—I have conducted such research myself—tries to put his ideas into mathematical form precisely to figure out whether they logically cohere. It turns out that the task is not easy."

Dwight Garner on The New York Times wrote:

"Mr. Skidelsky [...] knows more about Keynes than anyone alive, but his new book is not a pocket-size distillation of his earlier biography. It’s an attempt to translate and update Keynes’s ideas for a sleek, turbulent era. [...] In Keynes: Return of the Master, Mr. Skidelsky surveys the vast body of Keynes’s work. But he boils the thinking down to a few essential points. [...] Mr. Skidelsky is righteous in his thunder about how Keynes’s ideas have been spurned in recent decades. He scolds the free-market ethos of the Reagan and Thatcher eras as well as the thinking of anti-Keynesian New Classical economists. He does not entirely blame the usual suspects (banks, hedge funds, credit-rating agencies, the Fed) for the current crisis. He indicts laissez-faire philosophy. [...] When Mr. Skidelsky pulls out a napkin and begins to scribble down figures, this book is slower going. It is probably safe to say that Keynes: The Return of the Master is aimed at the general reader, if that general reader owns excellent reading glasses and enthusiastically devours the daily business section from front to back. [...] This book is provocative in its discussion of the moral aspect of Keynes’s thinking. [...] Keynes ultimately saw economics not as a natural science but a moral one. He was loath to rely on pure mathematics and risk models. Not everything could be reduced to numbers.
When it comes to deciphering Keynes’s ideas for the current moment, we can only speculate about details and particulars."

Steve Coulter on LSE Review of Books wrote:

"The great virtue of the book is the amount of ground it covers, and the fact that this expansiveness does not come at the cost of a lack of insight. This makes it a worthwhile read even for those not enamoured with Keynes’ interventionist philosophy. As well as a decent synopsis of the financial crisis and recession, Skidelsky provides a thorough explanation of the place of Keynesianism in economic theory and practice; an exposition of Keynes’s life and accompanying moral philosophy; an empirical comparison of the performance of the Keynesian ‘golden age’ with the subsequent ‘Washington consensus’ era; and a forward-looking set of policy recommendations to deal with the aftermath of the crash. The clashes over policy detail between Keynesian and neo-classical economists are pretty familiar, so Skidelsky focuses on foundational disagreements. His key point is that Keynes was right because his economic theories were grounded in psychology, history and personal experience, rather than abstract mathematics. Keynes didn’t just diverge from the neo-classicals, he was a different kind of economist entirely. Economics for him was a moral, not a natural, science that was not reducible to equations. [...] The author’s zeal for skewering the opponents of Keynesianism tends to go a bit far. Rational expectations are dismissed as motivated ‘mainly by a hatred of government’. There is little discussion of what made Keynesian activism self-defeatingly prone to complacency and profligacy by the governments which practiced it. Public choice, precisely the branch of political economy which analyses the capture of the state by bureaucratic and producer interests, receives short shrift. Merely because neo-classical economics has taken an overdue intellectual battering does not mean Keynesianism can take its place by default. However valuable Keynes’s insights, the world has moved on. Nevertheless, Skidelsky’s fascinating book reminds us that there are always alternatives to the intellectual status quo.


Relevant Links

Table of Contents of Keynes: The Return of the Master

Part I - The Crisis

  1. What Went Wrong? (Anatomy of a Crisis / Rescue Operations / Blame Games / The Real Failure)
  2. The Present State of Economics (Freshwaters and Saltwaters: A Thumbnail Sketch / The Underlying Premises / Rational Expectations / Real Business Cycle Theory / The Efficient Market Theory / Failures to Complain the Crisis / Debate over the Stimulus / Conclusion)

Part II - The Rise and Fall of Keynesian Economics

  1. The Lives of Keynes (A Many-Sides Genius / Keynes in the Market / The Effect of the Great Depression / From Promiscuity to Faithfulness)
  2. Keynes's Economics (The Pre-Keynesian Mindset / Keynes's Economics)
  3. The Keynesian Revolution: Success or Failure (The Keynesian World / The Theoretical Unravelling / The Keynesian and Post-Keynesian Eras Compared / The Influence of Ideas on Performance)

Part III: The Return of Keynes

  1. Keynes and the Ethics of Capitalism (The Morals of Capitalism)
  2. Keynes's Politics (Keynes's New Way / The Doctrine of Prudence / Keynes's Middle Way of the 1920s / The Aftermath)
  3. Keynes for Today (The Need to Rethink / Political Business Cycles / Taming Finance / Macroeconomic Policy / Curing the Saving Glut / Normative Limits to Globalization / Reconstructing Economics / Keynes Vision for a Harmonious World)