Interview du Jour: Face to face with John Maynard Keynes

Paul Mason, BBC Newsnight’s Economics Editor, managed to track Keynes down and produced the delightful interview below as reported by BBC.I didn’t recognise him at first because of the jumper: it was more like a duffle coat knitted with red-gold-and-green wool. But you couldn’t mistake that wide smile, that febrile top lip, those limpid eyes.He’d been wandering around Bloomsbury for days unchallenged, popping into the occupations at UCL, the Slade, King’s and the LSE to deliver impromptu “teach-ins”. Some people later claimed to me that they’d recognised him, but put it down to ketamine and sleeplessness: “Dude, that guy looks just like Keynes, no?”But it really was him and – after a lot of “no really I mustn’t” and muttering at the floor and checking his watch he consented to the interview. I dragged him to a quiet table at the back of Wright’s Bar on Houghton Street. The voice recording is deleted now so you’ll just have to imagine the soft “r” and the Cambridge drawl:Are we out of the crisis? I begin.“Good lord my dear boy we are hardly into it. We have no view into the future in the afterlife but I think it’s pretty much following the same path as before, though obviously with the caveat that the forces of globalisation place a major brake, or perhaps more like a restraining leash, on the course its taking.”So if it’s following the same path, what year are we in? 1931, ‘32?“Its actually remarkably on schedule. You’ve had the panic phase, then the phase of ‘it’s going to be alright’ and now you’re getting the phase where countries try to offload the cost onto each other. We’re not yet at the Credit Anstalt moment but you could read the Irish banking bailout as that if you wanted. As I say, it’s all mediated by the state throwing a fire blanket, as it were, across the flames. The state has proved remarkably useful.”I notice a tone, signalling disinterest:You don’t sound like your majorly focused on this, Lord Keynes?“Yes,” he sighs: “Economics is a poor business. Dismal does not describe the half of it, don’t you think? I mean – bear in mind that, for myself, I’ve had to watch my entire theory becoming a kind of handbook for bureaucracy in the mid-20th century, then become vilified, and now revived as a kind of emergency defibrillating device by people who thought heart attacks had become impossible…”“So you buy the Hutton thesis: that the Keynesian revolution didn’t happen, that Samuelson…”“Oh, please, don’t get me going on Samuelson… I mean, really, thermodynamics?”And he waves his hand and makes a pleading grimace and I stop, beginning again after he has ordered a bacon sandwich.If it’s a crisis of freemarket economics, surely some form of Keynesianism should be in the ascendant? I ask:“If this really were 1931 and we really were playing it all through the first time I might say yes. But actually you’ve now got the crisis of Keynesianism as well. Nothing’s really working – for the West at least, and yet for the East everything is working. So they’ve got to think it through. The battle is with the head, not the fists, as I said in the 1920s.“You don’t yet have a fully formed solution so put on your thinking cap. They need to sit down and envisage the world as it should be when the crisis abates: to think gigantic and ambitious thoughts about a world system that can contain and encompass fiat currencies and global finance. It’s doable but it will take time.”Any comments on modern Liberalism? I venture.“It’s basically Asquith versus Lloyd-George all over again and in reverse – only this time there is no Lloyd-George. Mr Cable – who cuts a fine figure in that fedora don’t you think? – was not a whole-hearted stand-in and is in any case now, as it says in the papers, toast. And when I say in reverse I mean they are progressing from the social liberalism of our Yellow Book days back to a kind of pre-Beveridge, almost quintessentially Asquithian view of the state. Doesn’t it seem that way to you?”I make a mental note read up on Asquthianism when I get time.So who would you say are the great Keynesians of today?“Hu Jin-Tao, for definite. Lula, obviously. Mervyn King – unlikely contender but a superb practitioner of undeclared currency manipulation and monetary stimulus – and Goh Chok Tong of course…”I look blank.“Central bank boss of Singapore, ran the country in the nineties. Quite liberal on gay rights. You know,” he looks around Wright’s furtively, “the whole of London is one big happy hunting ground for Singapore right now: science boffin only has to pop up with some kind of research and, there, instead of some lamentable English venture capitalist, in the front row, quietly writing out a blank cheque, will be some fellow from the Singapore technology fund. Now that really is Keynesianism. They even have an Arts Council.”So the future’s in state capitalism and the emerging markets?He goes sotto voce:“If I were not merely an ethereal presence, but able to invest actual pounds and pence, that is where my money would be going,” he taps his nose, “however…”- following a dramatic pause -“…the real issue is human freedom. That is a need they cannot currently satisfy and where the West retains its advantage. It’s what’s drawn me here…”He makes an expansive wave at the outside world: Houghton Street thronged with students, Bush House in the pre-Christmas gloom, a poster of Robert Lindsay starring in Onassis at the Novello.“These young people, misguided though they may be as to fiscal reality, and crude in method, are actually attempting to live the kind of life we Bloomsbury Group-ers tried to live: but technology and permissiveness allows them to succeed, dear boy, and if you know where to look – quite spectacularly.”You’ve discovered the London nightlife?“Thanks to my new friends I am what they call ‘gay disco royalty’; my twitterfeed is heavily subscribed; I have become, unlike you, expert in distinguishing Grime music from Dubstep and I am also heavily involved with the writers of the Nomadic Hive Manifesto – of which I can see from your expression you have not heard. It is entitled ‘Beeing and Nothingness’ and begins…”“You mean you’re taking this bunch of hipsters seriously?” I explode.“They’ve done what every generation since the 1930s tried to do: sideline the socialists and rediscover 19th century liberalism!”“‘Bee tolerant, Bee deterritorialised’ as the Hive manifesto declares. The space of the individual has expanded, the space of the collective diminished. That is the real economic revolution of your time and its entirely determined by technology and the rapidity of human development. As to the rest, they will grow out of it…”So what’s your current project?“It’s difficult to have long term projects when you’re ethereal old chap but if you remember we ran Charleston Farmhouse as a kind of liberal commune, Duncan and Vanessa, Virginia and Leonard… et al.” His eyebrows leap impishly; “Something along those lines would, um, er, appeal.”A liberated space on the Sussex downs. It would be almost mainstream now, I chuckle, but how would you fund it?His gimlet eyes light up and his brows beetle; he lasers me with a look of cruel certainty:“A massive leveraged one way bet on commodities, dear chap, out by the end of August 2011 when the bubble bursts – plus a side-bet on Euro-Dollar parity by 2012.”The Master has, albeit briefly, returned.Source: BBC News, December 29, 2010.Did you enjoy this post? If so, click here to subscribe to updates to Investment Postcards from Cape Town by e-mail.