Keynes on the reform of capitalism (notes for school)

"As Chick and Dow (2013) have recently maintained, Keynes sees not only love of money, but the criterion of profit itself, as a problematic issue of capitalism...

Keynes saw capitalism as an economically efficient system—or, more precisely, an ‘indispensable’ (JMK/A/2/6; also reported in O’Donnell, 1992, p. 809) economic system that has to be efficient—which is however ‘morally objectionable’ (ibid.).  His critique rests on the concept of money fetishism. The problems raised by capitalism, in this vision, have to do with the instincts it tends to promote, that obstruct the way towards the resolution of the economic problem. Capitalism is in fact primarily responsible, in positive, for our coming gradually but incessantly closer to a destiny of abundance and leisure. But it is also profoundly unjust, in Keynes’s vision, and causes bad instincts like the ‘sanctification of saving’ and the tendency to ‘sacrifice the present to the future’ without being sure that the exchange is worthwhile (reported in Skidelsky, 1992, p. 21)...".

Elaboration on Keynes

"Keynes’s view of ethics is an Aristotelian ethics of virtues (see Carabelli, 1998; Carabelli and Cedrini, 2011), which concerns the whole conduct of human life. Like Aristotle, Keynes believes that a good life is a life worth being lived: a moral life made up of friendship and affiliation, which are endowed with intrinsic worth. Yet, human flourishing (eudaimonia) cannot materialize in the absence of certain material and institutional preconditions….

The benefit of a successful struggle against the economic problem will accrue only, he observed, to those who ‘believe at all in the real values of life’ (CW 9, p. 327), who ‘can keep alive, and cultivate into a fuller perfection, the art of life itself and do not sell themselves for the means of life’ (p. 328)...

A society that is solving the economic problem requires, in Keynes’s view, a new, ‘religious attitude to life’ (to use Skidelsky’s words), one built around new values. Can capitalism survive Keynes’s desired revolution in values? Liberal in character, Keynes’s desired society is inspired to a new form of socialism, as O’Donnell (1992) rightly points out. ‘Keynes’s general position was that socialism should follow the example of liberalism in modifying its ideas and policies to adapt to changed historical conditions’ (ibid., p. 782). A ‘practical’ (CW 20, p. 475), pragmatic socialism, a form of ‘liberal socialism’ (CW 21, p. 500) with new, revolutionary values—knowing that the transition from the old to the new society might be ‘catastrophic’ (‘An Examination of Capitalism’, JMK/A/2/3; also reported in O’Donnell, 1992, p. 808).

Source:

Anna M Carabelli, Mario A Cedrini, Great Expectations and Final Disillusionment: Keynes, ‘‘My Early Beliefs’’ and the Ultimate Values of Capitalism, Cambridge Journal of Economics, Volume 42, Issue 5, September 2018, Pages 1183–1204, https://doi.org/10.1093/cje/bey017