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<font size="2"><font face="Verdana" color="#002864" size="5"><strong>Keynes
and the Reds</strong></font>
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<font size="4">by Ralph Raico</font>




[Posted February 14, 2002]




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The third and final volume of Robert Skidelsky’s celebrated Keynes
biography<em>, John Maynard Keynes: Fighting for Britain, 1937-1946</em> (New
York: Viking Press, 2001) has just been published, to rave reviews. Like its
predecessors, this volume makes no mention of Keynes's uncritical praise of
Stalinist Russia in 1936, although I brought it to Professor Skidelsky’s
attention in a letter to which he graciously replied.




It is now clear that he refuses to confront these shameful comments of his
hero. So, for all practical purposes, Keynes's fawning words on Stalinism have
been thrown down an Orwellian memory hole, rarely if ever to reappear in the
literature.




The following is slightly adapted from an article of mine that appeared in The
Free Market in April 1997. A much-expanded version comprises a chapter of
my forthcoming book, Classical Liberalism: Historical Essays in Political
Economy, from Routledge.


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It is the widespread view in academia that John Maynard Keynes was a model
classical liberal in the tradition of Locke, Jefferson, and Tocqueville.




Like these men, it is commonly held, Keynes was a sincere, indeed,
exemplary, believer in the free society. If he differed from the classical
liberals in some obvious and important ways, it was simply because he tried to
update the essential liberal idea to suit the economic conditions of a new
age.




But if Keynes was such a model champion of the free society, how can we
account for his peculiar comments, in 1933, endorsing, though with
reservations, the social"experiments" that were going on at the
time in Italy, Germany, and Russia? And what about his strange introduction to
the 1936 German translation of <em>General Theory</em>, where he writes that
his approach to economic policy is much better suited to a totalitarian state
such as that run by the Nazis than, for instance, to Britain?




Keynes's defenders try to minimize the significance of these statements,
exploiting certain ambiguities. But none of them, to my knowledge, has ever
bothered to confront a quite unambiguous pronouncement by Keynes. It was
included in a brief radio talk he delivered for the BBC in June 1936, in the
"Books and Authors" series, and can be found in volume 28 of his Collected
Writings, pp. 333-34.




In this talk, the only book that Keynes deals with at any length is the
recently published massive tome by Sidney and Beatrice Webb, <em>Soviet
Communism</em>. (The first edition carried the subtitle, A New Civilisation?;
in later editions, the question mark was dropped.)




As leaders of the Fabian Society, the Webbs had worked for decades to bring
about a socialist Britain. In the 1930s, they turned into enthusiastic
propagandists for the new regime in Communist Russia--in Beatrice's words,
they had"fallen in love with Soviet Communism." (What she called
"love," their nephew-by-marriage, Malcolm Muggeridge, labeled"besotted
adulation.")




During their three-week visit to Russia, where, Sidney boasted, they were
treated like"a new type of royalty," the Soviet authorities
supplied them with the facts and figures for their book. The Communists were
well satisfied with the final result. In Russia itself, <em>Soviet Communism </em>was
translated, published, and promoted by the regime; as Beatrice declared:
"Sidney and I have become icons in the Soviet Union."




Ever since it first appeared, <em>Soviet Communism </em>has been seen as
the prime example of the aid and comfort lavished by literary fellow travelers
on the Stalinist terror-state. If Keynes were a liberal and a lover of the
free society, one would expect his review to be a scathing denunciation. But
the opposite is the case.




In his talk, Keynes proclaims <em>Soviet Communism </em>to be a book"which
every serious citizen will do well to look into.


<blockquote style="MARGIN-RIGHT: 0px">


Until recently events in Russia were moving too fast and the gap between
paper professions and actual achievements was too wide for a proper account
to be possible. But the new system is now sufficiently crystallized to be
reviewed. The result is impressive. The Russian innovators have passed, not
only from the revolutionary stage, but also from the doctrinaire stage.




There is little or nothing left which bears any special relation to Marx
and Marxism as distinguished from other systems of socialism. They are
engaged in the vast administrative task of making a completely new set of
social and economic institutions work smoothly and successfully over a
territory so extensive that it covers one-sixth of the land surface of the
world. Methods are still changing rapidly in response to experience. The
largest scale empiricism and experimentalism which has ever been attempted
by disinterested administrators is in operation. Meanwhile the Webbs have
enabled us to see the direction in which things appear to be moving and how
far they have got.


[/i]


Britain, Keynes feels, has much to learn from the Webbs’ work:


<blockquote style="MARGIN-RIGHT: 0px">


It leaves me with a strong desire and hope that we in this country may
discover how to combine an unlimited readiness to experiment with changes in
political and economic methods and institutions, whilst preserving
traditionalism and a sort of careful conservatism, thrifty of everything
which has human experience behind it, in every branch of feeling and of
action.


[/i]


Note, incidentally, the backtracking and studied inconsistency typical of
much of Keynes's social philosophizing--an"unlimited readiness to
experiment" is to be combined with"traditionalism" and"careful
conservatism."




By 1936 no one had to depend on the Webbs' deceitful propaganda for
information on the Stalinist system. Eugene Lyons, William Henry Chamberlin,
Malcolm Muggeridge himself, and others had revealed the grim truth about the
charnel-house presided over by Keynes's"disinterested administrators."




Anyone willing to listen could learn the facts regarding the terror-famine
of the early 1930s, the vast system of slave-labor camps, and the
near-universal misery that followed on the abolition of private property. For
those not blinded by"love," it was not hard to discern that Stalin
was erecting the model killer-state of the twentieth century.




In Keynes's remarks, and in the lack of any concern about them among his
devotees, we find, once again, the bizarre double standard that Joseph Sobran
keeps pointing out. If a famous writer had said anything similar about Nazi
Germany in 1936, his name would reek to this day. Yet as evil as the Nazis
were to become, in 1936, their victims amounted to a small fraction of the
victims of Communism.




What explains Keynes's praise for the Webbs’ book and the Soviet system?
There is little doubt that the major reason is the feeling he shared with the
two Fabian leaders: a deep-seated hatred of profit-seeking and money-making.
According to their friend and fellow Fabian, Margaret Cole, it was in a moral
and spiritual sense that the Webbs looked on Soviet Russia as"the hope
of the world." For them,"most exciting" of all was the role of
the Communist Party, which, Beatrice held, was a"religious order,"
engaged in creating a"Communist Conscience."




As early as 1932, Beatrice announced:"It is because I believe that
the day has arrived for the changeover from egotism to altruism--as the
mainspring of human life--that I am a Communist." In the chapter on
"In Place of Profit" in Soviet Communism, the Webbs rave over the
replacement of monetary incentives by the rituals of"shaming the sinner"
and Communist self-criticism.




Up to the very end of her life, in 1943, Beatrice was still lauding the
Soviet Union for"its multiform democracy, its sex, class, and racial
equality, its planned production for community consumption, and above all its
penalization of the profit-making motive."




As for Keynes, his animosity to the financial motivation of human action
amounted to an obsession. He viewed the striving for money"as the
central ethical problem of modern society," and after his own earlier
visit to Soviet Russia, he acclaimed the suppression of the monetary motive as
a"tremendous innovation." For him, as for the Webbs, this was the
essence of the"religious" element they detected and admired in
Communism.




A notable feature of Keynes's praise of the Soviet system is its total lack
of any economic analysis. Keynes appears blithely unaware that there might
exist a problem of rational economic calculation under socialism, as had been
outlined a year earlier in a volume edited by F. A. Hayek, Collectivist
Economic Planning, which featured the seminal 1920 essay by Ludwig von
Mises,"Economic Calculation
in the Socialist Commonwealth."




Economists had been debating this question for years. Yet all that concerns
Keynes is the excitement of the great experiment, the awe-inspiring scope of
the social changes occurring in Soviet Russia under the direction of those
"disinterested administrators."




This brings to mind Karl Brunner's comment on Keynes's notions of social
reform:"One would hardly guess from the material of the essays that a
social scientist, even economist, had written [them]. Any social dreamer of
the intelligentsia could have produced them. Crucial questions are never faced
or explored."




No, Keynes was no"model liberal," but rather a statist and an
occasional apologist for the century's most ruthless regimes. His very
peculiar comments, especially on Soviet Russia, when added to his
state-enhancing economic theory and his state-dominated utopian vision, should
give pause to those who so unhesitatingly enlist him in the liberal ranks.
Viewing Keynes as perhaps"the model liberal of the twentieth century"
can only render an indispensable historical concept incoherent.


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Ralph
Raico, a senior fellow of the Mises Institute and the 2000 Schlarbaum
Laureate, teaches history at Buffalo State College. Send him MAIL.
See also Ludwig von Mises on
"The Symptomatic Keynes".


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