Zach Carter: Keynesian Inspiration for the Pandemic’s Economic Crisis


Zach Carter, Huffington Post reporter and author of the new book, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes

, talks to Rob Johnson about Keynes’s vision of maintaining democracy in times of crisis.

Transcript

Rob Johnson:

I’m here today with Zachary Carter, a senior reporter at the Huffington Post, covers Washington, economic policy, The White House, and who is the author of an exciting new book, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes. Zach, thanks for joining me.

Zach Carter:

Thanks so much for having me, Rob.

Rob Johnson:

Well, you’ve been a pillar of insight and, how would I say? Bearing witness to all the machinations and craziness and ideas and turbulence related to this American political economy for many years. You’ve been a good friend of Institute for New Economic Thinking, not so much in catering to us, but just being a voice and a beacon who’s out there, that I’m inspired to read and to suggest to others.

Zach Carter:

Well, thank you, Rob. I do my best.

Rob Johnson:

Well, Zach, let’s talk. I mean, right now, we’re near the end of May 2020, and this pandemic, COVID-19, has just rolled through, and let us say, the conventional wisdom doesn’t feel well-anchored any longer. There’s a great deal of emotion and anxiety about what the future pretense, and I’m curious, just kind of wide open, what are you seeing? What frightens you? What inspires you? And what would be your call to action to our listeners? What you think needs to be done.

Zach Carter:

Well, I’ll be honest, I’m a inveterate optimist, it’s one of the things I like about Keynes when I read him. Somebody who lived through periods of immense of people, and almost constant crisis. He never lost his faith in the belief that tomorrow could be better than today. But I don’t like a lot of what I see around us today. I see a country in the United States that has become so deeply unequal economically, that it appears to me to be politically bordering on ungovernable. The type of social breakdown that we’ve been witnessing even before the election of Donald Trump and the outbreak of this pandemic, things like the upheaval in Ferguson, Missouri, the Freddie gray riots, the fact that life expectancy declined in the United States for the last two years that it was measured, because of deaths of despair, predominantly among lower income white men, things like opioid overdoses and alcoholism.

To me, suggests that we have a society in which working people have become decoupled from the interests, the governing interests of the political system. And that to me seems very, just morally troubling on its face, but also politically unstable. I don’t see how we get through major crises like this pandemic without a great deal more of people. We really are living in different societies. The decline in life expectancy that’s happened over the last two years is not a broad-based decline. Wealthy people are living longer than they’ve ever lived in the United States. So, the society is really breaking into, at least, two different kinds of social universes, maybe more, depending on how you pursue the divisions among race and class, but certainly, there’s a breakaway wealth group at the very top, which has unique access to the political system, and the unique ability to see its interests implemented in public policy, while the vast majority of people in the country are simply not taken seriously by that system.

And I think that is very troubling. What I do think is promising is that, in the Democratic Party primary in 2020, even though the progressive wing of the party ultimately was trumped by Joe Biden, who represented very openly the sort of more moderate, cautious, we might call them centrist wing of the party, those ideas, the belief that bold and ambitious action is necessary in order to avert the kinds of disasters that we see unfolding in our communities every day, is necessary, that idea seem to be, I think, something that Democrats accepted. I think they were just a little bit too afraid to embrace them in this particular election. So, you see things, you see polling data on something like Medicare for All, it does very well among Democrats, it actually goes pretty well on Republicans, too.

The idea that there needs to be some sort of systemic change in the United States in order to fix these problems that we can’t just muddle through, that muddling through will actually lead us straight into disaster, I think has become the conventional wisdom among the general public, even if it’s not the conventional wisdom among the political class. And now there’s a huge gap there. Finding a way to make that conventional wisdom for normal people become the conventional wisdom for people in power is quite difficult. But it means that the case is not hopeless. And if there’s anything, any lesson from the life of John Maynard Keynes, it’s that things can always get worse, but they can always get better. And you have to cling to those glimmers of hope, because you don’t really have any other choice. Ultimately, tomorrow is coming, whether you like it or not, and you can either try to make it better, or you can bury your head in the sand.

And I think Keynes was somebody who was always trying to seize the moment in the most ambitious way possible.

Rob Johnson:

Well, you and I are mutual friends of Guy Saperstein and his gang. And I remember Carol Abedon had a offering on the Listserv that we both explore, about a gentleman named Stuart Zechman, who used to be a musical artist. And he was describing his disaffection towards the Centrist Democrats in a podcast. And he had cited an anonymous article, I think, Ben Smith had written, about a Democratic leader saying, “Well, the Democratic Party can’t go to that progressive place anymore, because the population doesn’t believe in government.” It’s not Lyndon Johnson, it’s not Franklin Roosevelt at this juncture. But what Zechman did was he went in the aftermath of reading that article to look at the Gallup polls.

And what he found was that most Democrats did, as was surface reported, have great skepticism about governance. But what he also found is the reason they were skeptical, is they thought that government had been captured by powerful corporate interests and wealthy oligarchs. This is 2011, this is in the shadows of the bailout during the Obama years, as the Republicans were taking over the House, the Senate, and then eventually, The White House. So, I guess that notion of confidence in expertise governance, or what we might call a crisis of representation, has been building for quite some time.

Zach Carter:

And it’s not a secret. I think the Democratic Party leadership ignores that sense among people at its own peril. There’s sort of a weird disconnect in American politics today, where, there are very well established views that are extremely mainstream about how the world works, and what’s going right and what’s going wrong. And they’re shared by people on the left and the right and in the center, I think. But, within the Democratic Party establishment, there’s the people who actually lead the party day-to-day, people like Nancy Pelosi and Chuck Schumer, there is a consensus that Democrats don’t get things wrong, and that everything is the fault of Donald Trump. And his sort of the problems in our society sprang to life in January 2017 and have just accelerated from there.

And I think, it’s hard to argue that Donald Trump hasn’t made things much, much worse. I mean, we’re living through this pandemic, which is, it’s a biological problem, but it’s essentially a political problem. Other countries that have implemented better responses to this virus are not suffering the kind of economic damage, the kind of human damage that we are suffering. But I think the election of Trump himself is a reflection of the political and social despair that people feel about their ability to even get attention from people in Washington. And I think that’s been reflected in the way that the coronavirus rescue or bailout packages, however you wanna describe them, have been negotiated.

There was a very quick package that was approved in late March, that provided trillions of dollars in funding for corporate America, with essentially no strings attached. And not nothing for working people, there was an expansion of unemployment insurance of $600 a week, which is, it’s real money for people, especially if you lose your job, no one’s going to turn down an extra 600 bucks a week. But, it was not an attempt to look at the world and say, “Okay, given that we have a once in a generation, maybe once in a century crisis on our hands, how do we make sure that this society does not come apart because of this crisis? Who are the people we want to protect most?” There was an instinctive turn to a handful of policies that people put in place in the 1980s or the 1990s that, “Okay, well, we want to boost unemployment insurance.”

It’s not a bad idea, but why are we letting people get laid off in the first place? There’s no guarantee that when this crisis is over, these companies that have laid these people off are going to hire them back. The fact that unemployment is going to go, is already clearly over 20%, probably going to 25% very soon. There was an opportunity to say, “Let’s not let these people have their job relationships with their employers be severed.” And if you weren’t going to do that, there was an opportunity to say, “Okay, let’s create a new social safety net that ensures that if people do have that job relationship severed, they’re in a condition where they can access the basic elements of a good life indefinitely,” not just for two or three months, the way that it’s been implemented under that package.

And now, of course, we’re entering what Democrats are calling phase four, but it’s just essentially an attempt to do over that botched response, I think, in March, and we’ll see what happens. But we still don’t see big ideas on the table, we see things like a trillion dollars for state governments. It’s important, give them money so that cops and firefighters and teachers don’t get laid off. That’s good. But it’s not going to save us from a depression and it’s not going to lift us out of a depression. And I think the idea that we’re going to bounce back from this very quickly, I think is a deep misunderstanding of human psychology. I think we’re going to be dealing with the aftereffects of this disaster for years, if not decades to come. People are going to remember this, and it’s going to resonate through our political system in ways that many of us simply cannot expect right now.

Rob Johnson:

And I sense that you’re right in one of the things that, for instance, my research director, Tom Ferguson works on is the tremendously important role of money in politics. So, whether you call yourself Democrat or Republican, or whether you think you’re the least worst, the responsiveness to concentrated wealth and big corporate interests is the precondition for survival. And I know your peer at ProPublica, Jesse Eisinger, has just put out reports, where he talks about how the consequences of the bailout is all kinds of small businesses are going out of business, unemployment at this level that you just described. And at the same time, most of the private equity firms that were leveraged to the hilt, are up 40 to 60% in their stock price.

So, there’s a whole lot of what you might call distributional ramifications from the structure of this bailout. And I do think, perhaps after this dreadful experience is behind us, people will go back and scrutinize that. And I’m fearful, in one respect, that that will deepen despair. And I’ve used, on this podcast, the analogy Franklin Roosevelt, with the New Deal, escaped the depression, and confidence, faith, and gratitude towards governance went up. So, by the time he was ready for war preparation, for World War II, he had a lot of trust and license. What I see now in Washington, and this started with the bailouts of 2009, and the, what Joe Stiglitz calls, “When the polluters got paid,” I see a despondency. The Tea Party, Occupy Wall Street, and it just keeps moving.

And then, this recent episode, I’m concerned that people will be what you might call susceptible to despair in potentially authoritarian rule, because they have no faith that the process we call our democracy can be at all representative, broadly representative and responsive. And how would I say? If we poisoned the people’s belief in our Republic, we’re in a very dangerous place.

Zach Carter:

And I think John Maynard Keynes really spent his life worrying about that exact problem. I think the conversion of Keynes into a sort of deficit therapist, the guy who you learn about on Econ 101 courses, who says, “You’ve got to spend money in a recession in order to get out of the doldrums,” has robbed a lot of his thought of this political and moral content. He was somebody who was absolutely terrified of the march of authoritarian governments in areas about people. He said he could see that after World War I, there was an intense energy for right wing authoritarian politics that was growing not only in Germany, but around the world. And we forget this, when FDR took office in 1932, there was a very, very significant right-wing fascist movement in the United States that FDR was working very cogently consciously to put down.

So, the idea that when you enter a state of disfunction, that the state will lose its legitimacy, and people will feel a thirst for a demagogue and a dictator, is something that, I don’t think that’s even unique to Keynesian thought, I just think he’s one of the people who was able to put that idea into a particularly powerful and emotionally compelling set of terms over the course of his career, and ultimately, his economics, everything that he’s working on from 1919 until his death in 1946, is aimed at averting this rise of authoritarian politics. And I don’t think that our politicians have the same sense of urgency about this, or the same recognition about what is happening.

And it’s a remarkable thing for me to say, because Democrats are going around saying every day that Donald Trump is a dangerous authoritarian who’s in cahoots with international authoritarians, and I think they’re right about that, but they do not seem to be governing as if that were the case. And they do not seem to have ideas about how to deal with the slide toward authoritarianism, that I think is happening among the American public. It only takes one spark, right? They could change their minds tomorrow, and we could start seeing some great legislation and turn things around. I think the pandemic is certainly not good for Donald Trump’s reelection prospects, but I would not rule out the prospect of him being reelected.

So, I think there’s this weird moment, which would be, I think would resonate very deeply with John Maynard Keynes, where the world is obviously dissolving into chaos and crisis, and yet, the leaders are looking around and saying, “Well, why don’t we have some refundable tax credits for job training?” And these are just not the solutions that are… It’s like they’ve been indoctrinated in a set of thinking, that makes them incapable. It’s not that they’re evil people, they literally don’t know how to grasp the world that they’re living in. And yet, they’re the people we have to turn to for solutions.

Rob Johnson:

Yeah. Well, there’s a senior fellow currently at INET, Geoffrey Mann, who’s from British Columbia, and he wrote a book on Keynes called, In the Long Run We Are All Dead.

Zach Carter:

Great book.

Rob Johnson:

I agree. And the last chapter is called Revolution After Revolution. And in that chapter, what I really admired was that Geoff had started the book with a skepticism about Keynesian policy. And to just paraphrase, countercyclical macro-stabilization has its place in mitigating unemployment or keeping the economy on the rails. But Geoff was worried that within what you might call the micro-political economy structure, the corruption and the rot would never be rooted out, because the depth of despair would be anesthetized by countercyclical, how would I say? Support for the economy. And so, you’d trail along through the years and through the decades, and the society would never face that intensity of crisis, which would make it repair itself.

But in the last chapter, Geoff says, and this is after the election of Trump, I believe, late 2016, early 2017, he was finishing the manuscript, and what Geoff says is, “I thought about it, and maybe I had too, idealistic of view, then I’m using my own phrase here of democracy. Small D, democracy is a corrective thing. And maybe what happens in that deep despair that I thought would be the catalyst to a reaction, is that the wisdom of crowds becomes the madness of crowds.” And as he was seeing what was unfolding, he’s Canadian, but he was watching the United States, he openly admits that he changed his mind, and that Keynes sensitivity to what you might call the continuity of social fabric and the deformity of democracy that prolonged despair could bring to the surface, that it was by far, the better alternative to engage in that stabilization.

And I know, your book is so sensitive to Keynes. It’s kind of, in my reading through it, the briefing, what I will call the briefing we get about Keynes at different points in time is outside of that hydraulic Keynesianism, that mechanical Keynesianism that’s associated with my alma mater, MIT, and the Samuelson-Solow crowd, and it feels to me like he’s a much more vital, spiritual, artistic, creative, and times, frustrated person from reading your work. And I think that’s just, I mean, you and Robert Skidelsky are really sharing what a great man looked and felt like.

Zach Carter:

Yeah, I have a ton of respect for both Geoff Mann and Robert Skidelsky. And I’ve met Geoff, but I talked with Robert, or his Lordship, I should say, over the course of writing this book, and I think there is a sense in which John Maynard Keynes has more in common with contemporary poets than he has with contemporary economists, Keynesian or otherwise. He’s somebody who thinks about society’s problems in this very holistic social and moral way. And the mathematics of his economics are, I won’t say they’re an afterthought, because, of course, he majored in mathematics at Cambridge, that’s what he studies as an undergraduate. The economics program at Cambridge was just getting started when he was at Cambridge at the turn of the 20th century, but he’s somebody who is concerned about the great problems of his day. And in his day, the great problems are war and depression.

So, he’s trying to come up with ways to solve these problems that don’t involve violence, because he’s essentially a pacifist, which is a remarkable thing for somebody who was the chief of British war finance during two world wars to be, but I think it’s still the case that he was a sincere pacifist, he did not believe in violence or war, and he believed that economic policy was, it was an extension of diplomacy. It offered the opportunity to create social harmony, both at home and abroad. And this makes him a deeply optimistic person because he thinks that if we just get it right on the way resources are acquired and distributed, that war and deprivation can be cured. That the idea of poverty, and frankly, the idea of serious inequality, he’s not an egalitarian, because he ultimately thinks that if people are well enough off, if they can have the elements in a good life, then who cares about serious inequality? But they need to have the elements of a good life available to them.

But he believes that these are things that are within the capacity of the political system to solve, as early as the 1930s. Which is, frankly, a remarkable thing. Because in the 1930s, the world is mired in the worst depression that anyone has ever understood or certainly been able to recollect. It’s not totally clear even if they’d been able to measure economic deprivation in this way before. So, I think if Keynes were around today, he would be talking about dealing with the pandemic because it’s obviously a medical and healthcare emergency, but he’d be thinking about the big problems in the world. He wouldn’t be talking about deficits in dollars and debt and accounting standards, he would be thinking about, “What do we do about climate change? What do we do about inequality? What do we do about declining life expectancy?”

These are matters of grave social importance, that threaten the stability of democracy. And for him, he’s kind of a fancy guy, right? He’s not a working class Joe, he wants to preserve the nice things that he likes about living in the Bloomsbury neighborhood of London. It’s the turn of the century, so, that means, being able to drink champagne while a great artist gives you a haircut. That means hanging out with Virginia Woolf and talking about books. It means Ian Forster giving you drafts of his book before it’s published. It’s thinking about art, and letters, and ideas all the time. And he does not want that lifestyle to be jeopardized by political unrest. And he believes that if we do not find some way to democratize that way of living that he enjoyed at the turn of the century, then there will be political people that will take those away.

And the upper class will rule the day, reap the whirlwind, whatever metaphor you want to pick, that will ultimately will become impossible for people to enjoy the kind of lifestyle that he enjoyed at that point in time. But as he gets older, particularly by the end of World War II, he just does not believe in economic scarcity. He thinks that we have the ability to feed everybody, to clothe everybody, to house everybody. And the trick is how to make sure that everyone actually is clothed and fed and housed, and make sure that not only their subsistence needs are met, but their ability to enjoy life is guaranteed. And he feels like if people have that, they’re not going to revolt, they’re going to feel tied to each other, they’re going to feel bound to each other in a political way, and democracy will be able to do its work.

But if you deprive people of this, and you have some people who are, to borrow a phrase from George Orwell, more equal than others in the democratic system, then you are going to sell a great deal of discontent. And I think it’s what we’re seeing today.

Rob Johnson:

One of the things I sense from reading your work is that, here’s Keynes with all of his artistic friends, what I’ll call a Bohemian elite, rather than an establishment elite, and his freedom of imagination to depart from what I’ll call the conventional wisdom or the reinforcement of that people’s side is his General Theory, which, before it was hydraulsized. And I would say, people like Paul Davidson have illuminated that side, the radical uncertainty, the lack of what now I’ll call continuity of structure in all kinds of things. But you have this man who’s, it’s almost like he walks his own walk to his own drummer. And where does that come from? I mean, that ability not to conform.

Zach Carter:

Sure. First, let me say that Paul Davidson is a real unsung hero in the history of Keynesian thought, because Paul Davidson, a lot of the ideas in my book are elaborations on the ideas that Paul Davidson has been writing about since the 1970s. And Paul is a really, he’s just a very important thinker in this history, who never has fully, I think, been appreciated or rewarded for the work that he has done. He’s been marginalized by the economics profession, because his ideas, frankly, just didn’t fit the needs of the, I hesitate to say corporate establishment. Because I think it’s really more of the financialization of the economy that took place over the ’80s and ’90s. It’s not just that it’s corporate, is it became financialized. And so, the economics profession just didn’t reward people like Paul.

And I think it’s really important to give someone like Paul his due at this moment, where I think the Keynesian ideas that Paul had teased out are more ascendant. I think, for Keynes himself, there is a certain sort of middle-class rebellious spirit to him. Perhaps I’m just projecting onto him, but I grew up in the suburbs of Northern Virginia and I played in punk rock bands. I was not a son of deprivation or poverty, I didn’t have drug addict friends in urban New York or something, but I played in punk rock bands because I identified with people who were trying to change the system in some way. And I think Keynes has a certain similarity.

There was no punk rock at the turn of the 20th century, but he grows up, he goes to Eton, which is one of the most elite and prestigious British boarding schools, and then he becomes a very illustrious student at Cambridge university at King’s College, and I think that experience for him, it allows him to understand his own, I think privilege is a word that’s thrown around a lot today in progressive politics, but it makes him feel like the world is something that he can change. He has the ability to shape it to his will, which is sort of an arrogance of youth and of a certain position in society that you get. So, he’s convinced that he can make the world a better place, and that the world will listen to him, from a very early age.

But he is then disappointed, deeply disappointed by his attempts to do that, particularly during World War I and afterwards. So, he has just immense confidence in himself as a result of his social position. But he also is surrounded by artists all the time. And these are people, in Bloomsbury, who were critics of the existing social order. And so, people like Lytton Strachey and Virginia Woolf, who think that the social order of the early 20th century is rotten and corrupt. They think that it’s stuffy and restrictive, and it prevents free expression and good ideas. And what Bloomsbury ends up doing is, ultimately, I think celebrating a particularly elite way of life, but it does so by rebelling against elites’ privilege, against elite norms.

And it makes Keynes somebody who is capable of understanding, I think, much more of the sort of social continuum than most people can. He can understand working people, and he can understand the elite at the same time. And it makes his thought, I think, much more compelling than it would be otherwise.

Rob Johnson:

And I sense there that, I’m always reminded of my good friend who died last year, William Greider, who often talked, and I’ve mentioned it in several of these podcasts, about his faith in young people. And he basically attributed it in a, I guess it’s a blog post, on a blog he founded in 2009, to the fact that young people have fresh eyes. They see what is wrong, but they haven’t been conditioned as to what is feasible, or that which will cost them in reputation among the powerful. And so, he felt that the impetus to change came from those young eyes. Well, Keynes lived into his 60s and I sense that he had young eyes from wire to wire.

Zach Carter:

Absolutely. And I think that’s something that is almost as important as his… it’s, at least, as important as his sort of congenital optimism, and is related to it. He always identified with the next generation. Even when he was writing the General Theory in 1936, he said, “I don’t really expect to persuade all of the economists who have come of age thinking about economics this particular way. Now that I have offered this revolution, my real hope is with the next generation.” And even in the late 1930s, early 1940s, there was a really funny interview with him for a British magazine, where he says, “I don’t really like the communists, the young communists. I mean, I think their ideas are a little bit silly. But our hope for the future lies in their political maturity.”

He’s still saying that, “They’ve got to get over this communism thing. But in their maturity, they’re going to be really something special, and they’re so much more promising than…” when he said, he calls them the old jossers. I’ve never seen the word josser used in any other context. So, I don’t know if that is a particularly nasty slur or something. I hope I’m not throwing about some terrible British insult from the before time. But he has a deep faith in young people and their capacity to understand and believe in the future, in a way that he thinks that his generation has just become so numbed to dysfunction and despair, that they can’t imagine a world in which things actually work, in which people are taken care of, in which tomorrow is, in fact, better than today.

And I think that that resonates to me certainly in our present day. I feel like it is very clear in our politics, we have a gerontocracy problem, where, not everybody who’s over a certain age is an enemy to progress, but there are people who have just become inculcated to a certain way of doing politics and making policy, which, in their defense is the way that it has been done throughout their lifetimes. But which clearly has led us into a situation that is disastrous. That anybody who is looking at the world today with fresh eyes is going to say, “This is not a good state of affairs, we need to do things differently.” And the people who have been making policy over this period in time, it’s not that they’re incapable of reflection, it’s just that they don’t know what else to do. They’ve been conditioned in this way. And I have a great deal of sympathy for these people.

When I worked as a banking reporter for a company called SNL Financial, which is now part of Standard & Poor’s Global Intelligence, I was constantly surrounded by people talking about the sort of perspective of the financial industry on the world. And so, when the bailouts happened and the financial crisis happened in 2008, I was always one of the more liberal or lefty people in the newsroom, but I had a basic set of assumptions about what was possible and what could happen, that changed when I left that institution. I don’t mean to insult that institution because it was a very good place to work, and they were very good to me, and I learned a great deal there. But when I left and started working for HuffPost, the basic political assumptions of HuffPost were totally different. And the work, the scope of possibilities, what seemed like a reasonable thing was very different.

And I think this happens to people in all sorts of institutions. They go off to law school and learn a certain way of thinking, and this is just how it is. And I think it happens, in particular, within the economics profession. And I think Keynes would have been very, very frustrated by the way thinking within the economics profession has ossified into this kind of a mathematical straight jacket. He did not want economists, he didn’t think of the economists the way we think of economists today. He talked about them in these poetic terms as people who were like great enlightenment thinkers. He thought the ideal economist was somebody like Isaac Newton or David Hugh. He did not think the ideal economist was somebody who was exceptionally skilled with econometric models.

He wanted economists to be social thinkers, not just mathematicians. And I think the mathematization of the profession over the last couple of decades, which has been enabled, frankly, by people who call themselves Keynesians, people like Paul Samuelson and Robert Solow, who also were very great economists, to be clear, I think he would have been very disturbed by that turn in the profession, and the influence that it has had on the course of our politics.

Rob Johnson:

Yeah. I mean, you look at today and the challenge before us, and you see things like his collection of articles, essays in persuasion, economic possibilities for our grandchildren, he was just imaginatively going fishing in a way that people just aren’t doing. I’ve been reading a book recently by a gentleman whose name is William, it’s Deresiewicz, at Yale, it’s called Excellent Sheep: The Miseducation of the American Elite. And it’s about this kind of sterile technocratic pretend value-free way of seeing. And in your book, that comes to the surface over and over and over. And in Keynes writing, there is this, what you might call moral reflection about what is a good life? What are our goals? Where are we heading?

My colleague at INET, Lynn Parramore, just put out a wonderful article, with a man named Jeffrey Spear, on John Ruskin and onto the last. And there’s people, Eugene McCarraher book, what’s it called? Something, Mailman? I’ll remember it. But all of these books are about this kind of what I’ll call mindset, almost religious lockdown on imagination and humanism, as if you are a romantic fool, or if you’re a coward, if you actually explore what matters to humankind.

Zach Carter:

I think with Keynes, well, I think there are three works that people should read from Keynes, that are not the General Theory, to get the spirit of his thought. There’s the economic consequences of the peace, which is his critique of the Treaty of Versailles that ended World War I in 1919, and then I think there’s a book called Essays in Persuasion, which I think is now volume nine of the 30 volume set of collective writings that Cambridge University Press has available. And then there’s a book called Essays in Biography, which I think is volume 10. And his essays on people like Isaac Newton, I think are just, they have a sort of magical quality to them. You can just tell that that is the stuff that just really captivates him. That captures his imagination and makes him take flight.

And this idea that the economist is this very narrow, technical mathematical thinker, is something that develops over the course of the 20th century and becomes concretized, set in stone in the latter half of the 20th century. Even when people like John Kenneth Galbraith are studying economics in the 1920s and 1930s, the economics world, if you’re going to need an economics PhD, you’re sort of a weirdo. You’re a little more, you’re not quite like a philosopher, but you’re pretty close to what I think we would call a philosophy student today. And I don’t mean that in an insulting way, I studied philosophy as an undergraduate too. So, I like these weirdos. But it was a realm of creativity and experimentation, rather than a realm of, let’s say, of orthodoxy.

The orthodoxy about economic policymaking came from government and from the financial sector, but economists themselves were sort of freewheeling types, or certainly, more freewheeling types than the type of people you encounter at a American business school today. So, Keynes liked that. He liked that milieu, he thought that was cool. He was a philosopher who was good at math, and there weren’t that many of those people. So, economics was a great place for him. But he was concerned with societies hanging together, he was not concerned with making sure that equations balanced just so. And he wouldn’t ignore numbers today, but he would ask what the numbers were for. I don’t think he’d be afraid of the deficits that countries around the world have been accruing in order to fight the coronavirus pandemic for instance, but I think he’d be very concerned about the policies that those deficits represent.

During World War II, he wrote a very good piece called How to Pay for the War, which was sort of about how to pay for the war, but it was actually really concerned with what economic distribution would look like after the war. “How do we finance this war in such a way that when it is over, the richest people in society don’t simply become richer as a result of this conflict?” So, if you just sold bonds, government bonds, and the investor class would reap all of the benefits from that accumulation now for the warrant, and working people would get nothing. He was able to process multiple social problems at the same time, through the same policy mechanism, and he was also willing to change his mind if it didn’t work out. He didn’t say, “Well, this is just how the world is. This is the policy that I prescribe. We have to stick to it by hook or by crook.” He would change his mind.

And I think that flexibility on technical policy questions is something that is very admirable. But he was not flexible about his vision for society. He really never loses sight of this idea that everybody can be part of Bloomsbury. And if that is the world that you want to fight for. And I frankly find it a very difficult vision to argue with. Who doesn’t want to go to the museum every day? Who doesn’t want to have their hair cut by Virginia Woolf while drinking champagne? That sounds wonderful to me.

Rob Johnson:

Yeah. For everybody, it should be. But, yes. Well, I mispronounced the book I was referring to was The Enchantments of Mammon: How Capitalism Became the Religion of Modernity, by Eugene McCarraher. And what I see at some level is this, what you might call illusion of free markets, as Bernard Harcourt called it in his famous title, this mechanical deference. It’s what Charles Kindleberger called something like, I can’t remember what it is. He had a word or a phrase like a fallacy of concreteness. That people are acting like they can stabilize society by pretending that the economy is just a machine. And I don’t quite know, I’m very fond of the philosopher John Dewey and Charles Sanders Pearson, those pragmatists who played around with the notion of uncertainty.

And I remember, what was the name? The quest for certainty was the name of Dewey’s book, but it illuminated all of the horrid side effects that are analogous to following a demagogue, because you want to believe until such time that their charade is unmasked. And I’ve got a quote that I use very often now, because I think we are in transition. I think a particular religion has failed, and we’ve got to sail out into the fall together. And this gentlemen, R.C. Zaehner at Oxford University, he said, “Loss of faith in a given religion does not, by any means, imply the eradication of the religious instinct. It merely means that the instinct temporarily repressed, will seek an object elsewhere.”

What I’m hopeful about, and Zach, this is really a question, I’m hopeful that the pain in the tragedy of this pandemic will propel us to see better what matters, and define a less, I see mechanical fascination with material consumption, and, how do I say? Redefine what the good life is.

Zach Carter:

I think the key is for the young. The young are the people who are looking to the future with a sense of optimism by necessity. They’re going to inherit this world, whatever it is, whether they like it or not. And so, they have to think about it as a place that can be better than what we’re living in now, because this is clearly intolerable. And I think young people are capable of establishing the political conditions that enable a better world to come to fruition. And frankly, I have a very dim view of the people who are in power in both Republican and the Democratic Party at the moment. But I don’t think that those people are riding decide Geist. I don’t think that that is the trajectory of human thought and of human action. I think the kids have it right.

And I spend a lot of time talking at universities with younger people, and this is a really terrific younger generation that’s coming up. I’m a millennial, I’m 37 years old, and so, I’m past the point where I get to claim the advantages of youth. I’m pretty well into middle age at this point, but I’ve got to tell you, young people on college campuses, in high schools, who are thinking about these ideas, they are ready to do something bigger and better than what our generations have done. And I think they can do it. I genuinely think they can, because I don’t have any choice. Either they’re going to do it, or we’re going to see mass death.

Rob Johnson:

Well, I hope you’re right. And Zach, you may be 37 years old, that looks like youth to me, but I’m standing here at 63. But I’m going to ask you to go back to an old song. If you’re feeling old, My Back Pages by Bob Dylan, “I was so much older then, I’m younger than that now.” In this book that you’ve written, you’re rising to the occasion. It’s almost a beautiful coincidence because I know you didn’t see the pandemic coming when you wrote the book. But what we need are beacons, what we need are models of a way forward, a way of mind, of what greatness and vision constitute. And you painted a beautiful portrait of a fascinating man. And so, I think you’ve got young eyes, and I think you’re a big contributor to the world that we need and to the pathway forward.

Because you both, I read this quote from Muriel Rukeyser, about, “There’s kind of two types of traditions. There’s the people like Melville, who point out what’s wrong, and there’s the peaceful like Walt Whitman, who teach us how to dream.” And you do both of those things beautifully.

Zach Carter:

Ah. Well, that is a very high compliment. I don’t know if anyone’s ever compared me to Walt Whitman and Herman Melville before, Rob. But I will take it.

Rob Johnson:

Well, you’re in that framework. And this book, I know, like I mentioned, our friends with Guy Saperstein and the group, they were just overjoyed. Our mutual friend, R.J. Eskow, got you on for a podcast right away. And he was effusive and your reviews are deservedly strong and enthusiastic. And that’s true even within all the establishment media right now. So, you’ve tickled our fancy and you’ve rung our bell. And I want to thank you for being here with me today and making a difference.

Zach Carter:

All right. Thanks so much, Rob. I really appreciate your time.

Rob Johnson:

And we’ll talk again before too many months pass, about the time your book tours are over. And though, they may all be electronic for a bit of time, but I’m sure my audience will want to see us come back and compare notes in the not too distant future.

Zach Carter:

I’m sure I’ll be able to write another book out of this, so we can talk about that instead, if not for that.

Rob Johnson:

All right. Take care. Thanks. Bye-bye.

About the Host

ROB JOHNSON serves as President of the Institute for New Economic Thinking.

Johnson is an international investor and consultant to investment funds on issues of portfolio strategy. He recently served on the United Nations Commission of Experts on International Monetary Reform under the Chairmanship of Joseph Stiglitz.

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About the Guest

ZACH CARTER is a senior reporter at HuffPost, where he covers economic policy and American politics. He is a frequent guest on television and radio whose work has appeared in The Washington Post, The New Republic, The Nation, and The American Prospect, among other outlets.