The foundation of Keynes’s economics
This chapter explores certain aspects of the relationship between the economic theories of Karl Marx and J.M. Keynes from one particular angle, that of the underlying methodologies and general conceptions of these two economic theorists. And because of its importance in current analyses of the Keynesian crisis, we intend to explore these matters from one specific angle: from the standpoint of those who wish to create a new political economy on the basis of a fusion of certain strands within Keynesian economics on the one hand, and some elements from the Marxist-classical tradition on the other. Such efforts involve two distinct, although related questions:
1 That concerning the relationship of the political economy of the classical school to that of Marx. Keynes himself certainly believed that his new economics would undermine what he called the Ricardian foundations of Marxism. In other words, he identified the classical political economy of Ricardo with Marx’s critique of it. We have already commented on this issue and can therefore be brief. Marx’s work involved a critique of political economy, one which understood that there were a series of flaws, fatal in the final analysis, associated with the work of even the best representatives of the school; it was these flaws which made it vulnerable to the attacks of the vulgar, commonplace writers who emerged in the period following Ricardo’s death. (The best treatment of the transition from classical to vulgar economics is provided by Rubin 1979.) The collapse of Ricardian economics was not an event explicable in ideological terms only. That is to say, while Ricardo’s doctrines were certainly attacked because of the subversive uses to which they were being put, not least by the various radical writers in the 1820s and 1830s, the fact remains that the opponents of the classical school did have definite weaknesses in Ricardo’s economics at which to aim their fire and no amount of formal rearranging of the categories of that economics could protect it from its vulgar detractors. Only a fundamental reworking of classical economics which truly transcended it (that is, preserved its positive features while disposing of its negative aspects) could produce a real development of this tradition. It fell to Marx’s lot to make precisely this advance. It is from this standpoint that those attempts made by certain post-Keynesians, as well as by several
Marxists, to conflate the work of classical economists and that of Marx are at base erroneous and must be rejected.