"The Nation as an Economic Unit": Keynes, Roosevelt, and the Managerial Ideal

Abstract

political dimension of John Maynard Keynes's achievement and located its historical significance in the fundamental tension between this century's two great paradigms of social organization-"Freedom" and "Planning." 1 The Great Depression, he ar gued, starkly exposed the vulnerability of the industrial democracies to impersonal market forces, producing unemployment and misery that challenged the legitimacy of democratic political institutions. To many who were drawn to the radical solutions of planners of both the Right and the Left, it seemed that the West's economic agony would yield only to a thoroughgoing reconstruction of its political order; if Adolf Hitler would preserve capitalism by destroying liberty and democracy, then Joseph Stalin premised the achievement of democracy on the destruction of liberty and capitalism. But if the friends of freedom shrank from these extremes, they remained paralyzed by the apparent incompatibility of effective measures to end the distress with the preservation of traditional liberties that the vast majority still cherished. It is in this context that Skidelsky measures Keynes's greatness. Aware that im provement in economic technique was the only alternative to political change whose consequences he despised, Keynes so defined the economic problem that its solu tion required neither the substantial diminution of personal liberty nor a reordering of the property relationships at the foundation of democratic capitalism. He thus postponed the day of reckoning between freedom and planning by offering a tech nical solution to the political problem, a solution that promised not only economic stability but also the preservation of both the price mechanism and the institutions of liberal democracy. But with the Keynesian consensus now in tatters, Skidelsky argued, in a world of new economic problems that urgently pose the old alternatives of freedom and planning, "we return to the original question. Can we look once more to an improvement in economic technique to solve the political problem? Or must we rely on political and social change to solve the economic problem?" 2