Friday, January 28, 2011

Why We Are Not Called Keynesian Economics and Literature

I use Austrian economics in my analyses of literature and in understanding literary and artistic production because as far as I can tell it is the only tradition in economics which most closely matches the reality of human action and of our social existence in the extended order. I reject Marxism precisely because its metaphysics, epistemology, ethics, sociology, and economics are about as unconnected to reality as one could imagine (even Marx more or less admitted this when he argued that the point was not to understand the world, but to change it). But there are other economic theories that are much more closely related to reality, such as those of Milton Friedman, J. M. Keynes, and Samuelson. So why not them?

Well, one can't deal with every tradition, so let us then deal with one of the most dominant competitors to Austrian economics, Keynesianism.

What would a Keynesian sociology of literary or artistic production look like? First, we would have to figure out what it means for there to be aggregate demand for and supply of literature. Then one would have to figure out how one would boost the aggregate demand for literature, and under what conditions one would want to do so. But then, what would that even mean? Would a loss of interest in surrealistic poetry result in an attempt to boost consumer demand? Or, since focusing on surrealism would mean one has disaggregated the data, would it just be a general loss of interest in poetry, meaning there is a poetry recession, if you will? How would one go about boosting consumer demand for poetry?

Let us ignore these difficulties and think about what would happen in a Keynesian literary economy. If our government could figure out how, and we did boost aggregate demand for literature, that would result in more people going into writing, resulting in a misallocation of human resources into the arts, where they find they now are able to make a good living. Since the field is currently dominated by those who are only obsessed enough to create literary works, any boost in demand would result in more supply being required, meaning more people would be pulled into literary production. These would be people looking to make money rather than good art. The result would be a general reduction in the quality of literature. The result would be a literature bubble, with an inevitable bust (people can only read so much). So a Keynesian approach to literary production would result in a proliferation of bad writers producing bad literature, resulting in a literature bubble and subsequent crash, where the reputation of the literary arts would be harmed, having been exposed as something people are doing not because they love the art, but because they thought they could make a quick buck. A Keynesian approach to literature would do nothing but harm the art. It may help a few good artists during the boom, but it's not likely that the great artists would be the ones to survive the recession. And it would take years to recover the reputation the artists had before. Of course, in the meantime, Keynesian policies would try to reinflate the bubble, making the problem even worse over time.

So, what would a Keynesian sociology of literary or artistic production look like? It certainly doesn't look anything like real artistic production. I hope I have made the case in my paper on The Spontaneous Orders of the Arts and my posts on this blog that the assumptions of Austrian economics result in a theory of artistic production that most closely resembles reality. It would be strange if the underlying structures of one social order were not fundamentally the same as those of the rest of the social orders -- the scientific order, the religious social order, the economy, etc. These are all theories of humans interacting on fairly large scales. So any social theory which resulted in a bizarre description of one order would be expected to give rise to a bizarre description of another. On the other hand, one may argue that while the literary order does work according to the strictures of Austrian economic/social theory, that it ought to work according to the strictures of Keynesian theory. Of course, I have already pointed out what the consequences of that would be.


  1. Does Keynes's understanding of the role of investors in society not figure into this at all for you?

    Does Keynes's thoughts on the good life and the uses of leisure not figure into this at all for you?

    Does Keynes's excavation of essential aspects of character in his numerous biographical essays not play into this at all for you?

    Does his association with Bloomsbury developments in literature not play into this at all for you?

    Certainly the stark contrast between individual goals and social outcomes in some circumstances (and the resonance of individual goals with social outcomes in others) has important thematic applications for someone interested in literature - does it not?

    Troy, I think this is less analysis and more hit piece on your part. You shouldn't degrade your own blog with that sort of post - particularly when you do it so transparently. If you showed some interest in actually figuring out what a Keynesian literary criticism might look like, perhaps it would be different - but you're clearly not interested in that at all. So don't write about it as if you were.

  2. I don't deny that there may be aspects of Keynesian economics that could be enlightening. I admit as much about Marxism, which I think is about as bizarrely unconnected to reality as any ideology can be. My analysis here involved looking at what a sociology of artistic production would necessarily look like under Keynesian economics -- much as I had done in my paper on The Spontaneous Orders of the Arts for Hayekian economics. The Hayekian model results in something that looks remarkably like reality. The Keynesian model looks nothing at all like reality. (I note that you don't critique anything I actually say -- you just point to other things I could have talked about).

    Now, if I were to focus on these other elements, there is no doubt that one could have a lot to say that would illuminate characters' behaviors, depictions of economic conditions, etc. Frederick Turner writes about the Bloomsbury Group in his book Natural Classicism, if you are interested in another free market literary theorist's take on the group.

    My suspicion is that a Marxist would come to this blog and accuse me of being entirely unfair toward Marx. Well, this is Austrian Economics and Literature, not Marxism and Literture. Nor is it, as I said, Keynesian Economics and Literature. As a possible sociology, it simply does not match reality. And I showed what would happen if we tried to impose that system onto the artistic order. The only reason you don't think it's fair is because you don't like what you see.

  3. re: "My analysis here involved looking at what a sociology of artistic production would necessarily look like under Keynesian economics"

    My whole point is that doesn't seem to be what you've done. What you seem to have done is taken a few cliches about aggregate demand and fiscal policy and written an unserious post about it to try to discredit the very idea of a Keynesian application to literature. If you can say something like Keynesianism looks nothing at all like reality, you're clearly not going to come up with an application to literature that anyone could take seriously (well, aside from people that agree with you from the start, I suppose).

    You want me to critique what you actually wrote rather than offering productive suggestions? You seem to act like fluctuations in relative demand have something to do with aggregate demand, and you don't mention at all the monetary mechanism through which a decline in aggregate demand has a depressionary impact on the economy. You don't mention money. You don't mention the interest rate. That has lead you to a very non-Keynesian exposition of demand fluctuations. You also completely ignore a Keynesian understanding of investment which leads you to talk about demand for literature as some sort of disconnected fiat, which of course is also a fairly non-Keynesian way of talking about real creative investments in art and literature. I don't even know what this sentence is supposed to mean:

    "Since the field is currently dominated by those who are only obsessed enough to create literary works, any boost in demand would result in more supply being required, meaning more people would be pulled into literary production"

    Troy, you've never demonstrated any interest in engaging Keynesians fairly or taking a word of what they have to say about economics or society at face value. You have a very limited caricature of Keynesianism, and that's what you always argue against at Coordination Problem, and that's also what you employ here. Keynes probably offers a lot to the literary theorist, but you don't even try to grapple with what that might be. You really oughta just stick to your Austrian work.

    I'm not critiquing you because I have a problem with your attempt - I'm critiquing you because I really don't feel like you're making a sincere attempt.

  4. In understanding artistic production, things like money and interest rates are, quite frankly, completely irrelevant -- until they are made relevant. No artist does what they are doing for the money, even if they hareldy turn it down when it comes available. Out of my short stories and poems published and play produced, I have made a total of $25. That's not why I do it. Nor is it a way to determine success in the arts. Van Gogh was unsuccessful financially, but obviously a brilliant, influential artist. For actual artists, the marketplace does not come into consideration at all -- even if the ideal audience does. The finished work may enter the market when finished, at which point one has to consider catallactic conditions, not artistic ones per se. The value of the Austrian approach is that it provides a sociological structure that, like with the sciences (see Butos & McQuade), does not have money as the thing with which people valculate value. It is applicable to thee catallaxy as well as to other social orders. What I am trying to point out here is that a Keynesian approach would turn artistic production into consumerism. It would end up turning the artistic order into a government-influenced economic order. As it would do with the sciences (and which we see in the pharmaceutical industry, with the government responding to the "surprising" drop in new pharmaceuticals -- caused by endless government interference in the pharmaceutical market -- by propsing the government step in and invest, since government spending is the same as consumer spending in the Keynesian calculus).

  5. "What I am trying to point out here is that a Keynesian approach would turn artistic production into consumerism."

    It's crystal clear this is what you're saying.

    What I'm not clear on is why you're saying that - why you're reaching to one small part of his thought (and explaining it very poorly - that's why I mention your omission of money and interest), and expecting it to be relevant to art.

    Keynes was a great patron of the arts (a private patron) - far more than any Austrian I'm aware of. He wrote a lot about creative uses of and enjoyment of leisure (as in non-market time), and the growing importance that this creative leisure would play in society as capital accumulation progressed. You ignore all of this - which I would have assumed would have been more relevant - for a botched version of the General Theory - which isn't especially relevant.

    "It would end up turning the artistic order into a government-influenced economic order."

    Again, I know you are saying this - I'm wondering how you could possibly come to this conclusion.

    You don't need to repeatedly clarify your argument for me. The point is I find your argument completely absurd.

  6. Really? His General Theory is one small part of his thought? If one is interested in understanding what an economist's ideas on how an economy is (or ought to be) structured, his biographies he wrote, no matter how lovely they may be, or his patronage, no matter how generous that may be, are completely irrelevant. And why would I be interested in this beyond the borderlands where literary production and the economy meet? Because human social network structures are the same at the structural level. It's all humans interacting and pursuing their values. Thus, a structural description of an economy should be able to be used to describe the social structure of literary production as well. What does a Keynesian economy look like? That description should be able to be stripped down to its structural fundamentals and have other social orders built on it, whether it be science or any one of the arts. If there is discontinuity between Keynes' ideas on what an economy does or should look like and his ideas on what the social structure of artistic production does or should look like, then Keynes is wrong about one or the other -- if not both. That is a different posting altogether, though.

    I come to the conclusion that the artistic order would become consumerist and a government-influenced order precisely because that's what happens to the economy underKeynesian policies. If that is what the economy fundamentally looks like with Keynesian structure, then that is what the artist order would look like as well. This is logical is you understand that all social orders are structurally identical. Only if you disagree with that claim is my argument completely absurd. But then you would have to explain why humans act completely differently in one social order vs. another.