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Posts Tagged ‘John Maynard Keynes’

Leon Kass has an article in this month’s National Affairs (recently relaunched) in which he uses his own journey from study of science to study of humanities as a meditation on the role of humanities in life. In the piece, which is well worth reading, Kass approvingly cites Aristotle as a guide in how to live well:

We are today inclined to praise as excellent one or the other of two human types. Utilitarians esteem the shrewd and cunning man who knows how to get what he wants. Moralists praise the man of good will, the well-intentioned or good-hearted fellow bent on doing good. But these views, Aristotle shows us, are both inadequate. The highest human excellence in the realm of action requires both that one’s intentions be good and that one’s judgment be sound. Never a slave to abstract principles or rules of conduct, never a moral preener espousing “ideals” or doctrines, the prudent man knows that excellence really consists in finding and enacting the best thing to do here and now, always with a view to the good but always as seen in the light of the circumstances.

We would do well to consider Aristotle’s emphasis on combining moral intentions with the ability to make sound decisions and get things done. We have perhaps had too much emphasis on the extremes, which Kass characterizes as utilitarianism and moralism. Andrew Leonard expresses this in another way in a review at Salon of robert Skidelsky’s new book, Keynes. Considering the trends in ‘rich’ countries, Skidelsky makes an observation and poses a series of questions:

Although real incomes in rich countries have doubled in the last thirty years, the populations of these countries work harder than ever and are no happier. This raises the question of why they are still on the growth treadmill. Is it because capitalism needs constantly to expand markets, and ensnare by advertising more and more people into useless consumption? Is it because economists have ignored the fact that, as societies become wealthier, positional goods — goods which satisfy not our needs, but our longing for status — become more and more desirable? Is it because globalization has made affluence too insecure and too uneven in its spread for most people in wealthy societies to ease off work? Or is it because we lack any agreed idea of the good life in the name of which we can say “enough is enough”?

In last question Skidelsky parallels Kass. They both point to a lack of a commonly-agreed sense of what a good life is. In an age of unprecedented wealth on the earth, clearly our material advancement is not sufficient to constitute moral living. Moreover, following Aristotle, mere having the intention of living some other way is not sufficient, either. We must not be content with merely criticizing the materialist status quo. We must actively seek, promote, and try to live an alternative.

In that progression of logic lie the seeds of a life of faith.

‘Abdu’l-Baha has said, “By faith is meant, first, conscious knowledge, and second, the practice of good deeds.” But He goes further than this, as recorded in Paris Talks. Though it is a lengthy excerpt, I will quote it here in full.

All over the world one hears beautiful sayings extolled and noble precepts admired. All men say they love what is good, and hate everything that is evil! Sincerity is to be admired, whilst lying is despicable. Faith is a virtue, and treachery is a disgrace to humanity. It is a blessed thing to gladden the hearts of men, and wrong to be the cause of pain. To be kind and merciful is right, while to hate is sinful. Justice is a noble quality and injustice an iniquity. That it is one’s duty to be pitiful and harm no one, and to avoid jealousy and malice at all costs. Wisdom is the glory of man, not ignorance; light, not darkness! It is a good thing to turn one’s face toward God, and foolishness to ignore Him. That it is our duty to guide man upward, and not to mislead him and be the cause of his downfall. There are many more examples like unto these.
But all these sayings are but words and we see very few of them carried into the world of action. On the contrary, we perceive that men are carried away by passion and selfishness, each man thinking only of what will benefit himself even if it means the ruin of his brother. They are all anxious to make their fortune and care little or nothing for the welfare of others. They are concerned about their own peace and comfort, while the condition of their fellows troubles them not at all.
Unhappily this is the road most men tread.
But Bahá’ís must not be thus; they must rise above this condition. Actions must be more to them than words. By their actions they must be merciful and not merely by their words. They must on all occasions confirm by their actions what they proclaim in words. Their deeds must prove their fidelity, and their actions must show forth Divine light.
Let your actions cry aloud to the world that you are indeed Bahá’ís, for it is actions that speak to the world and are the cause of the progress of humanity.
If we are true Bahá’ís speech is not needed. Our actions will help on the world, will spread civilization, will help the progress of science, and cause the arts to develop. Without action nothing in the material world can be accomplished, neither can words unaided advance a man in the spiritual Kingdom. It is not through lip-service only that the elect of God have attained to holiness, but by patient lives of active service they have brought light into the world.
Therefore strive that your actions day by day may be beautiful prayers. Turn towards God, and seek always to do that which is right and noble. Enrich the poor, raise the fallen, comfort the sorrowful, bring healing to the sick, reassure the fearful, rescue the oppressed, bring hope to the hopeless, shelter the destitute!
This is the work of a true Bahá’í, and this is what is expected of him. If we strive to do all this, then are we true Bahá’ís, but if we neglect it, we are not followers of the Light, and we have no right to the name.
God, who sees all hearts, knows how far our lives are the fulfilment of our words.

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Following from yesterday’s post on the relationship between capital and labor, I want to post today on markets and the role of financial crises. I’ve read Paul Krugman’s piece on the sate of economics from the weekend’s New York Times Magazine and recommend it to you all. (Krugman also has a post on his blog, The Conscience of a Liberal, responding to a few criticisms that came up, and Andrew Leonard has his take over at Salon’s How the World Works.)

In the Magazine article, Krugman lays out a narrative that attempts to explain the trends in the academic study of economics since its inception. He then uses that narrative to make the case that the current recession, sparked by the crisis of 2008, must in turn spark a re-evaluation of dominant economic theory. He focuses most of his attention on developments of the 20th century, specifically the response of John Maynard Keynes to the Great Depression and the later resistance to Keynes, led by Milton Friedman. Krugman, in response to the current situation at least, is an unabashed Keynesian, believing that governments must drive demand through spending in times of severe recession.

Most interesting to me, though, is Krugman’s analysis of the shortcomings of economics:

Economics, as a field, got in trouble because economists were seduced by the vision of a perfect, frictionless market system. If the profession is to redeem itself, it will have to reconcile itself to a less alluring vision — that of a market economy that has many virtues but that is also shot through with flaws and frictions.

Krugman goes on to suggest how he thinks economics ought to develop:

There’s already a fairly well developed example of the kind of economics I have in mind: the school of thought known as behavioral finance. Practitioners of this approach emphasize two things. First, many real-world investors bear little resemblance to the cool calculators of efficient-market theory: they’re all too subject to herd behavior, to bouts of irrational exuberance and unwarranted panic. Second, even those who try to base their decisions on cool calculation often find that they can’t, that problems of trust, credibility and limited collateral force them to run with the herd.

So, Krugman wants an economics that acknowledges people’s irrationality and the dynamics of group behavior. That seems reasonable enough. What Krugman doesn’t seem to want, though, is an economics that considers that people might not be entirely self-seeking, either. On this point, I think, a Baha’i view can be helpful.

In his letter of 1931, know to us now as The Goal of a New World Order, Shoghi Effendi made the following comments about the forces contributing to the upheaval of the present-day world order:

The disquieting influence of over thirty million souls living under minority conditions throughout the continent of Europe; the vast and ever-swelling army of the unemployed with its crushing burden and demoralizing influence on governments and peoples; the wicked, unbridled race of armaments swallowing an ever-increasing share of the substance of already impoverished nations; the utter demoralization from which the international financial markets are now increasingly suffering; the onslaught of secularism invading what has hitherto been regarded as the impregnable strongholds of Christian and Muslim orthodoxy—these stand out as the gravest symptoms that bode ill for the future stability of the structure of modern civilization. Little wonder if one of Europe’s préeminent thinkers, honored for his wisdom and restraint, should have been forced to make so bold an assertion: “The world is passing through the gravest crisis in the history of civilization.” “We stand,” writes another, “before either a world catastrophe, or perhaps before the dawn of a greater era of truth and wisdom.” “It is in such times,” he adds, “that religions have perished and are born.”

Shoghi Effendi attends to the spiritual elements of a financial crisis – in this case, the Great Depression – and considers the wider effects such crises may have on people’s fundamental views of themselves and the world around them. While I doubt the current recession will be strong enough to spark such a change, there is no doubt that the continued upheaval of the world’s systems leads an increasing number of people open to the possibility that fundamental change is necessary. Such fundamental change requires us to reconsider economics in light not just of such factors as human irrationality and group dynamics, but also of human qualities such as a desire for unity and justice.

Writing in The Prosperity of Humankind in 1995 about the need for women to be accorded their rightful equal place in society, the Baha’i International Community had the following analysis:

The classical economic models of impersonal markets in which human beings act as autonomous makers of self-regarding choices will not serve the needs of a world motivated by ideals of unity and justice. Society will find itself increasingly challenged to develop new economic models shaped by insights that arise from a sympathetic understanding of shared experience, from viewing human beings in relation to others, and from a recognition of the centrality to social well-being of the role of the family and the community. Such an intellectual breakthrough—strongly altruistic rather than self-centered in focus—must draw heavily on both the spiritual and scientific sensibilities of the race.

Only when we are able to embrace both the scientific and the spiritual sides of our reality in shaping our economic analyses will our crises finally result in the victories for which we are destined.

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