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Name/date: Major work: Keywords: Key figures: (subsequent) Aphorism: Political aspect: Associations:

John Maynard Keynes (1883- 1846) The General Economy Mixed economy, general economy, state intervention, effective demand

Biographical info:

Keynes John Nevile Keynes was a Cambridge professor in political economy and logic. J.M.Keynes went to Eton. Studied mathematics at Cambridge and then took civil service examinations, resulting in a move to the India office. This appointment was not greatly to his liking and he worked on a theory of probability in his own time. He moved on to teaching economics at Cambridge.

Negri on Keynes:

Treaty of Versaille lost opportunity.

“Keynes position, against the classical liberal separation of politics, was a generic insistence on the interioziation of the political element within the economy.”

“With Keynes, capitalist science takes a remarkable leap forward. It recognizes the working class as an autonomous moment within capital. With his theory of effective demand, Keynes introduces into political economy the political notion of a balance of power between classes in struggle. Obviously the ideological (but also necessary) aim of Keynes’s argument is toward shoring up he system. For Keynes the problem is how to establish a balance of effective demand, in a context where the various balances of power making up effective demand are conceived of as unchanging. This political objective, however, which would require working class autonomy to be forever constrained within a given existing power structure, is precisely the paradox of Keynesianism. It is forced to recognise that the working class is the driving motor of development, and that therefore Keynes’s statically defined notions of equilibrium can in fact never be attained in static terms. Any attempt to define an equation of static equilibrium is, and will remain, a laborious search for equilibrium within what has to be a developing situation. In effect, as Keynes appears to recognize, the system functions not because the working class is always inside capital. But because it is also capable of stepping outside it, because there is the continual threat that it will in fact do so. The problem for science, and the aims of politics, must be to contain and absorb this threat, this refusal, and absorb it at ever new levels. Capital must ensure that the dynamic factors of growth are controlled, in such a way that the balance of power remains the same. The problem, in other words, is never resolved, only postponed. Looking closely, one can see that capital’s dynamism at this point only results from a continuous struggle, in which the thrust of the working class is accepted, and new weapons are forged in order to prevent the class form acting outside capital, and to make it act within a framework whose outlines are continually being drawn anew.” (Negri 43-44)

For Negri the manner that Keynes continuously considers the political is not explicit. It lies however in the notions of effective dermand. For Keynes the one independent variable that is the foundation of his mode of thinking is the ‘downward rigidity of wages…the the wage-unit as determined by the bargains reached between employers and employed” (Negri pp 44).

In political terms the struggle over wages is the form of the class struggle, and the power over the determination of the wage, the autonomous power of the working class. Keynes assumes this as a basic postulate of his analytical system. The response of the capitalist class then must take into account this power of the working class, the capitalist class must extend is power in more diffuse ways throughout society, the planning of the state represents the extension of control over the whole of society. Society then reproduces the figure of the factory. (Negri 45)

This is the era of social capital, which paradoxically reintroduces the power of the labour law of value. For social capital forces the economist to perceive the generality of capital, rather than the individual actions of capital wherein the law of value has no effectivity. This restatement of the law of value is only quasi-Marxist, a social democratic version of the theory. For Keynes, without revolution capital moves to point where interest and profit disappear, and money becomes only a symbol of equivalence, an ‘accounting unit’ for different commodities. Negri: “Capital becomes communist: this is precisely what Marx terms the communism of capital (Capital Vol 3 pp 436ff)” (Negri 47) But Keynes now contradicts himself, as his premises of the law of value are forgotten when it becomes apologia for capital in the form of Bourgeois moral utopianism. Negri: “To put ones faith in the full realization of the law of value is effectively to put one’s faqith in the full realization of the capitalist law of the extraction of surplus value.” (Negri 48) Keynes ends up mystifying the exploitative relationship in capital

Reduction of monetary theory to theory of production (money wages and real wages tend to converge).

From “Keynes and the Capitalist Theory of the State” in Labour of Dionysus and Red Notes (selected writings of Antonio Negri. Written in 1967.

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Resources		Large bibliography and related books at bottom of this site’s page: Review of John Maynard Keynes, The Economic Consequences of the Peace by Thorstein Veblen Political Science Quarterly, 35, pp. 467-472.
Bibliography	Indian Currency and Finance - 1913 Tract on Monetary Reform (1923), “Am I a Liberal?” & “The end of laissez-faire” & “liberalism and labour” In Essays in persuasion. Macmillan, London 1931 “Dr.Melchior: a defeated enemy” & “Newton the man” In Essays in Biography, Macmillan 1933 “The economic consequences of the peace” Macmillan 1919 “A revision of the treaty”, Macmillan, London 1922. “A Treatise on money.” 2 vols. Harcourt, Brace and Company, New York, 1930. “The general theory of employment, interest and money”. Macmillan, London 1936.	e-text

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