The Conservative Roots of Gay Bashing Keynes
Brad DeLong provides the nasty source of the river of bile that led to Ferguson’s extended rant about Keynes and homosexuality.
“ The source appears to be a rather remarkable screed by Gertrude Himmelfarb in a rather McCarthyite vein, that manages to get a lot about Keynes’s economics and his family life substantially wrong in a very short space, which in turn appears to be based on the views of Joseph Schumpeter. Gertrude Himmelfarb [wrote]:”
‘From Clapham to Bloomsbury: a genealogy of morals: In one sense Keynes is the most interesting of the [Bloomsbury] group, because he defied at least one of its precepts. He not only lived a ‘life of action’; he did so in the most bourgeois and materialistic of professions. If it was partly accident that originally drew him to economics, it was talent and ambition that kept him there. Yet even while pursuing that sordid occupation, at Cambridge and at the Treasury, he made it clear that he regarded economics as a separate and altogether inferior sphere of life and that he personally deplored any emphasis on economic motives or criteria. Bertrand Russell recalled that while Keynes “escaped into the great world,” he did so with the air of a ‘bishop in partibus’; when he ventured forth into the mundane world of economics or politics, “he left his soul at home.”
In fact, something of the “soul” of Bloomsbury penetrated even into Keynes’s economic theories. There is a discernible affinity between the Bloomsbury ethos, which put a premium on immediate and present satisfactions, and Keynesian economics, which is based entirely on the short run and precludes any long-term judgments. (Keynes’s famous remark, ‘In the long run we are all dead,’ also has an obvious connection with his homosexuality – what Schumpeter delicately referred to as his ‘childless vision.) The same ethos is reflected in the Keynesian doctrine that consumption rather than saving is the source of economic growth – indeed, that thrift is economically and socially harmful. In The Economic Consequences of the Peace, written long before The General Theory, Keynes ridiculed the ‘virtue’ of saving. The capitalists, he said, deluded the working classes into thinking that their interests were best served by saving rather than consuming. This delusion was part of the age-old Puritan fallacy … ”
Ferguson’s 1999 Gay Bashing of Keynes
This is not the first time that Ferguson has gone out of his way to emphasize Keynes’ sexual orientation in a manner designed to raise animus against Keynes through a smear comprised entirely of innuendo (note Ferguson’s use of “perhaps”).
“ Thursday’s remarks were not Ferguson’s first comments on Keynes’ sexuality. In his 1999 book ‘The Pity of War,’ Ferguson wrote that World War I ‘made Keynes deeply unhappy. Even his sex life went into a decline, perhaps because the boys he liked to pick up in London all joined up.’ ”
Right, because an Englishman couldn’t be “deeply unhappy” at the massive loss of life and limb caused by World War I – at least if he were gay. A gay Englishman would “perhaps” be “deeply unhappy” because the war interfered with his sex life. (Note that Ferguson adds the homophobic trope that gays are out to recruit our young “boys.”)
Ferguson’s 1995 Gay Bashing of Keynes
In a similar smear four years earlier, Ferguson raised the possibility in an article entitled “Keynes and the German Inflation” that Keynes sympathized with Germany’s position on paying reparations because perhaps he was a lover of one of the German negotiators (Ferguson 1995: 369-370.)
Ferguson adds the homophobic trope that gays are a security risk and potential traitors. Ferguson’s 1995 smear is a classic. He begins with an innocuous phrase (essentially, “I love that guy”) by Keynes that virtually every male of any sexual orientation has likely said many times. Keynes said that “he got to love” Carl Melchior, who he worked with in the course of his negotiations with the Germans about reparations. Given the widespread homophobia in Keynes’ era in England and the widespread hate for Germans there is no chance that he would make such a remark if he felt there was any risk that it could be read as an admission of a traitorous, gay affair with a German negotiator. (Ferguson also adds gratuitously that Melchior was Jewish.) But at this juncture Ferguson is feeling very clever about his smear. He begins by claiming, falsely, that there is “no question” but that there was an “emotional dimension to Keynes’s position” on German reparations because of the single innocuous comment about Melchior. You know gays, all emotion; no ability to be logical. Ferguson has a low threshold for rocketing from wild speculation prompted by a single statement to unquestionable fact (“no question”). Ferguson realizes this is nonsense, so after creating a purported excuse for bringing up Keynes sexuality, and planting the innuendo that that, at best, Keynes’ position was compromised by his “emotional” connection with a German negotiator, Ferguson drops another innuendo – Keynes “may” have been referencing a “sexual attraction” towards Melchior.
All of this would be disgraceful for any writer, but for a historian it is beyond the pale. It is revealing how Ferguson next tries to remove his fingerprints from his quadruple effort to smear Keynes (gay, emotional, swayed by his sexual attraction, for a representative of the enemy). Ferguson now declares that it “seems more probable” that Keynes was “captivated” by his post-war “pessimism.” Ferguson is trying to position himself as the one who put in writing his belief that the “more probable” explanation for Keynes’ behavior was that he was not a traitorous homosexual – that was the less probable explanation. See? Ferguson, cast some doubt on the smear he invented and spread through innuendo about Keynes. Ferguson is Keynes’ defender!
The Immoral Effort to Moralize Economics
DeLong is correct that Himmelfarb manages to pack a large number of errors about Keynes and about economics into three paragraphs. I will return briefly to some of those economic errors later in this article. First, I want to note that Himmelfarb’s screed is like Ferguson’s screed in another way – it attempts to moralize economics. Himmelfarb is explicit about making that effort even in the title of her work. People who challenged the conservative English social order were pathetic, child-like creatures who “put a premium on immediate and present satisfactions.” Homosexuals are immoral (because they are assumed not to have children) – the “connection between lack of concern for future generations and homosexuality is “obvious.” Homosexuals like Keynes drag the world into degeneracy by impugning the ‘virtue’ of saving.”
When Keynes was alive and could defend himself directly against the moralizers he skewered them so successfully that he dominated the field. James Galbraith’s article chiding Paul Krugman for ignoring the economists who got the ongoing crisis right (“Who Were These Economists, Anyway?”) contains Keynes’ devastating retort in 1936 to the immoral moralizers. Sadly, the same retort applies today to theoclassical economics.
“It must have been due to a complex of suitabilities in the doctrine to the environment into which it was projected. That it reached conclusions quite different from what the ordinary uninstructed person would expect added, I suppose, to its intellectual prestige. That its teaching, translated into practice, was austere and often unpalatable, lent it virtue. That it was adapted to carry a vast and logical superstructure, gave it beauty. That it could explain much social injustice and apparent cruelty as an inevitable incident in the scheme of progress, and the attempt to change such things as likely on the whole to do more harm than good, commended it to authority. That it afforded a measure of justification to the free activities of the individual capitalist, attracted to it the support of the dominant social force behind authority.
But although the doctrine itself has remained unquestioned by orthodox economists up to a late date, its signal failure for purposes of scientific prediction has greatly impaired, in the course of time, the prestige of its practitioners. For professional economists…were apparently unmoved by the lack of correspondence between the results of their theory and the facts of observation; – a discrepancy which the ordinary man has not failed to observe…”
Keynes’ remarks stress three points. First, he knew that the “austerians” claim that inflicting additional pain on households in response to a recession represents “virtue” found a responsive chord in many politicians. President Obama and the very serious people that live within the beltway genuflect whenever the mantra “shared sacrifice” is chanted. What Keynes pointed out, and what the overwhelming majority of economists believe, is the fallacy of thrift during an economic contraction. Keynes explained that it was rational for households to respond to a recession or depression by cutting their spending, and that their collective action could deepen the recession or depression by further depressing already grossly inadequate demand. This could cause severe, long-run suffering. The austerians frame this long-run suffering as a virtue. Keynes saw it as self-destructive. Austerity in response to a recession or a depression is akin to bleeding a patient to heal him. A nation with a sovereign currency is not “just like” a household. It can, and should, step forward and supply the lost demand to speed the recovery and reduce suffering. This is helpful in all time perspectives (short-to-long). The claim that Keynes did not care about longer-term effects is a fiction.
Second, Keynes did not simply point out that what we would call today “automatic stabilizers” and “stimulus” programs were not “immoral.” In the quoted passage his primary message was that the moralizers’ embrace of thoeoclassical economic dogmas was profoundly immoral. Keynes exposed these economists as shills for the plutocrats who became the most notorious apologists for those who became wealthy by inflicting “social injustice” and even “cruelty.” Part of the plutocrats’ cruelty was telling those that were not wealthy that their path to morality was to suffer stoically these self-destructive, gratuitous double-dip recessions caused by austerity.
Ferguson does not understand the irony of decrying an invented lack of altruism by Keynes to a group of investors who disproportionately studied economics, finance, and business and who are generally exceptionally wealthy and include a disproportionate number of CEOs. These are the three groups in America we know of that rank at the bottom in altruism (or exceptionally high in narcissism) and many aspects of care for the future generations, e.g., climate change. (It would be interesting to explore whether there is an interaction effect that makes wealthy CEOs from an economics or finance background rank even lower on altruism. In addition to putting the lowest weight on the importance of climate change (the quintessential burden we are placing on our children), the wealthy were found in a recent study to have the opposite priorities from the general public on a series of issues critical to future generations. The wealthy want cuts to Social Security, government health care programs, and food stamps (SNAP).
University students who study economics self-select when they enter our programs and display significantly lower altruism on most tests. Research shows if they major in our programs the study of economics and their peers’ views combine to produce even lower altruism scores. This article by a student pulls together some of the research citations.
CEOs rank exceptionally high in psychological tests measuring narcissism. One of the factors positively associated with CEO narcissism is financial fraud.
What all of this means is that if Ferguson was really concerned that too many Americans are becoming “degenerate” because they lack sufficient concern for the plight of other less fortunate Americans and future generations then he was speaking to the right audience. Statistically speaking, his audience was unusually likely to be weak in altruism. Of course, that speech would not have gone down to well with a group that is paying his speaker’s fee.
Third, Keynes pointed out the consistent predictive failures of theoclassical economists. Ferguson tried his hand at economic predictions in his debate with Krugman in 2009. Ferguson claimed that the fact that the stimulus program was pushing up interest rates, which he predicted would surge and cause a severe crisis. Krugman explained why Ferguson was wrong. If it were a fight, it would have been ended by the ref as a TKO after Krugman’s response. The facts proved Krugman correct, so Ferguson responded by changing his position – retroactively! He now claims that he did not say what he actually said in 2009. Sadly for Ferguson, there are records of what he said and Krugman was happy, in his February 19, 2013 column, to compare and contrast Ferguson’s statements in 2013 about what he (didn’t) say in 2009 with what Ferguson actually said and predicted in 2009.