A Brief History of Political Economy
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A Brief History of Political Economy

Tales of Marx, Keynes and Hayek

Lars Magnusson and Bo Stråth

Investigating the ideological dimension and exploring the continued impact of Marx, Keynes and Hayek, the authors demonstrate how these three economic narratives became entangled over time and under increasing complexity, overlapping and competing with each other. The book reflects on the meaning of the historical legacy of the three narratives and investigates their significance today. All three outlined the prospects for a better and more economically efficient world with increased social justice. Magnusson and Stråth argue that they constitute a legacy on which a new economic tale must be based, a legacy to draw on or confront.
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Chapter 2: The tale of Keynes

Lars Magnusson and Bo Stråth


John Maynard Keynes thematised the problem of uncertainty in the economy and how to cope with the human condition. He shared with Marx the vision of social harmony, with the difference that Keynes looked for harmony through pragmatic copying with the imperfect functioning of the world as it is rather than through a big bang revolution that would change everything. Keynes’s intellectual goal was the unification of the seemingly irreconcilable: uncertainty and social harmony. His economics of harmony was both national and international, which, however, in the latter respect had little in common with the later harmony of the globalisation narrative after 1990. Full employment at home through investment and income redistribution in order to take the pressure off foreign trade, slow down the pace of globalisation, and ease the social tensions in its wake, were some of his prescriptions for social harmony. Keynes was a cosmopolitan European, who looked forward to an era of small political and cultural units combined into larger and more or less closely knit economic units. Keynes was more than an economist. He was a radical and unconventional visionary thinker in a time full of conventions but with few visions. He explored the world, the economy in the world, and the economy in its historical, social, cultural, and political context. It is important to separate Keynes from the Keynesianism after World War II where the technocratic application of his theories made him a mechanic provider of a toolkit for the maintenance of economic growth where growth was a goal for its own sake. Indeed, Keynes had envisaged something beyond the economy as the arena of an endless rat race.

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