Friday, 18 June 2010

The last of the Keynesians?

Was Wynne Godley, who has died at the age of 83, the last of the Keynesians? I did not know Godley, but once he phoned me up to ask, with great old fashioned courtesy, a series of questions about the Common Agricultural Policy about which he was proposing to write a letter to the FT.

Godley came from an impoverished aristocratic background. His father was an alcoholic and his mother was clearly deranged. He was brought up a violent maiden aunt and attended a particularly unpleasant prep school. No wonder he had an 'disastrous encounter' with psychoanalysis in mid-life.

However, he went on to be an accomplished professional oboist, before abandoning his musical career (he suffered from bad stage fright) to join the Metal Box Company (a major company in its day) as an economist and then the Treasury in 1956 when Keynesianism was the established orthodoxy. It also did one no harm in those days in the Treasury to have a serious interest in music. He later became a director of the Royal Opera House.

He became deputy head of the economics section before departing in 1970 for Keynes's old post at King's College, Cambridge. He then became an advocate of import controls, although he claimed somewhat unconvincingly that he was only trying to reduce the propensity to import. Godley came across to me as a rather old fashioned 'drenching wet' Conservative, but some of his colleagues in the Department of Applied Economics in Sidgwick Avemue were well to the left and signed up to the now largely forgotten Alternative Economic Strategy.

Godley had no time for the Thatcherites once describing their policies as 'gigantic con trick'. As it became evident that he was not 'one of us', he was punished by having the grant for his forecasting group abruptly withdrawn in 1982. He did enjoy a late flowering when he became a member of the Treasury's Panel of Independent Forecasters or 'six wise men' from 1992 to 1995.

The FT obituary described him as a 'Maverick who endured with ideas undimmed'. He certainly did not lack intellectual courage. In a sense Keynesianism is back in fashion again with the torch being carried by the former colleague with whom I taught for some years, Robert Skidelsky (Lord Skidelsky of Tilton). He is undoubtedly a great intellectual, but one political economist aptly described his book on Keynes: the Return of the Master as 'eloquent, but not convincing.'

The notion that we can spend our way out of trouble is misguided: we would simply end up in an even bigger hole rather like the sinkholes that have been appearing all over China.

No comments: