March 14, 2008

Since it is fashionable to talk about Keynes these days, I thought I'd take a look at his magnum opus The General Theory of Employment, Interest, and Money (1935) and see what the fuss is all about. One surprising paragraph I came across is this ode to individualism and private enterprise, not something one would expect to find in Keynes' work:

"Let us stop for a moment to remind ourselves what these advantages [of individualism] are. They are partly advantages of efficiency-the advantages of decentralisation and of the play of self-interest. The advantage to efficiency of the decentralisation of decisions and of individual responsibility is even greater, perhaps, than the nineteenth century supposed; and the reaction against the appeal to self-interest may have gone too far. But, above all, individualism, if it can be purged of its defects and its abuses, is the best safeguard of personal liberty in the sense that, compared with any other system, it greatly widens the field for the exercise of personal choice. It is also the best safeguard of the variety of life, which emerges precisely from this extended field of personal choice, and the loss of which is the greatest of all the losses of the homogeneous or totalitarian state. For this variety preserves the traditions which embody the most secure and successful choices of former generations; it colours the present with the diversification of its fancy; and, being the handmaid of experiment as well as of tradition and of fancy, it is the most powerful instrument to better the future."

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