The Philosophy of Keynes' Economics: Probability, Uncertainty, and Convention.

Author:Wilson, Matthew
Position:Book Review

edited by Jochen Runde and Sohei Mizuhara. London and New York: Routledge. 2003. Paper, ISBN: 0415312442, $31.95; cloth ISBN: 0415281539, $95. 240 pages.

The Philosophy of Keynes' Economics is a collection of essays, written by distinguished Keynesian scholars, on the philosophy of John Maynard Keynes and its relation to his economics. The book provides a good, up-to-date starting place for institutionalists and others interested in exploring this vast topic. Dialogue between institutionalists and Post Keynesians has led to fruitful cross-fertilization, but it also has given rise to issues, probably unfamiliar to some readers, around basic philosophical differences, which will require careful assessment in going forward. This may come as a surprise to some readers among institutionalists who are familiar with Keynes' economics but not his philosophy.

Late in his career, Keynes self-critically described his philosophy as a form of neo-Platonism, which derived indirectly from the influence on him of G. E. Moore (in the book under review, contributors who interpret Keynes' theory this way include Rod O'Donnell, John B. Davis, Donald Gillies, Guido Fioretti). However, there is deep controversy over the unresolved question of whether or not at some point Keynes recanted his Platonism. There are some reasons to believe that he abandoned his early philosophy (for arguments supporting this thesis, see essays by Bradley W. Bateman, Ted Winslow, Davis, Gillies), but there are other reasons to think that he did not (see essays by O'Donnell, Anna Carabelli, Bill Gerrard).

In his Treatise on Probability, published in 1921, Keynes argued that probability relations are objective logical relations (now widely interpreted as Platonic entities), which are perceivable through direct intuition. This framework yields a rationalistic conception not only of probability but also of uncertainty (although Carabelli disputes this, to some extent). Uncertainty is when direct intuition of these Platonic entities fails or is fuzzy because (1) our faculties of intuition are weak, (2) the evidence is flimsy, or (3) the probability relation does not exist or is not numerical.

The essay by Davis is especially notable for its candid discussion of the problems with Keynes' philosophy. He builds on Ludwig Wittgenstein's criticism, which is "applied to Keynes's idea that 'probability' named some transcendent Platonic entity, namely the relation of something being probable. One...

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