Sphinx

In this morning’s Grauniad, Maurice Glasman seeks to establish the irrelevance, or at any rate limitations, of Keynesian ideas as a response to the ongoing economic crisis by taking a longer historical view, back to classical antiquity:

The practice of counter-cyclical public spending on public works in order to protect the real economy, the status of citizens and the institutions of society, goes back, as does so much else these days, to Athens. It has been a fundamental tool of statecraft for as long as democracy and markets have been negotiating their tortuous settlement. There is nothing distinctively Keynesian about public spending in a recession. What is distinctive is the reliance on the Treasury to achieve this, on taxation and centrally administered spending as a method of generating growth.

It’s difficult to know how to respond to this in a more articulate manner than “Huh? You what?”. There is no trace whatsoever in what can loosely be described as ‘ancient economic thought’ – bearing in mind the complete absence of anything resembling ‘economic theory’ in a meaningful sense – of any concept of economic cycles, such that one could develop policies to cope with them; hell, there’s not even a concept of an economy that could undergo cycles, or which it was the responsibility of the state to manage. There’s a serious debate as to whether credit was ever employed for productive purposes – I think it was, even in Athens, but there are some very credible historians who disagree – and since there wasn’t any system for state debt anyway it’s difficult to see how anyone could have pursued Keynesian policies even if they’d had the idea. In the absence of any detail, one can only speculate as to what on earth Glasman has in mind. Pericles using the resources of the Delian League to fund the Parthenon? Spending the income from the silver mines on triremes and pay for attending the assembly and jury service? Ancient states buying in grain during food crises? Not obvious that any of these is ‘counter-cyclical’…

Of course, one suspects that historical veracity is beside the point; the aim isn’t to say anything useful or relevant about the ancient economy, it’s simply to put the boot into Keynes by any means necessary. It’s all too reminiscent of my favourite anecdote from Reinhart Koselleck, about the Prussian official who intervenes in a debate with the words “But Privy Councillor, do you not remember that Thucydides tells of the evils that followed from the circulation of too much paper money in Athens?” In the early nineteenth century, such spurious appeals to antiquity were perhaps a bit of a risk, given the importance of the classics in the education system and the widespread belief in its authority; today, most people will lack the confidence to call out such claims as bogus, and those who do can be dismissed as pedantic academic irrelevances. (I intend to put this to the test in the Grauniad‘s comments section shortly…).

As almost always happens in such cases, Glasman’s use of antiquity hops backwards and forwards between “the Greeks were wonderfully sophisticated and insightful” – they pre-empted Keynes, and there’s so much more to be learnt from Aristotle’s economic thought than any modern nonsense – and “antiquity was a long time ago and is basically irrelevant” – the only visible contribution of ancient thought to Glasman’s prescriptions is an emphasis on (undefined) ‘value’, along with vocation and virtue, as the true goals of policy. In other words, Aristotle is evoked as a representative of timeless values rather than specific (albeit historically contingent) insights – and, more importantly, as an authoritative figure to be brandished against Keynes. Goodness only knows what Aristotle – or Karl Polanyi, who is also cited – would have made of a sentence like “Decentralised vocational institutions is the way ahead and that involves statecraft rather than statism.” As it happens, I do believe that the study of the ancient economy has important lessons for understanding the present state of things, but not like this…