Winnipeg Free Press

Winnipeg Free Press (Newspaper) - June 2, 1983, Winnipeg, Manitoba Keynes is still Worth considering by Stephen Watson special to the free press in Cambridge University re pealed the statute which required its Fellows professors to resign if they the spate of marriages which followed included that of Neville a lecturer in the moral and Florence who had been on of the earliest female students at the the Fol lowing year of june 5 100 years ago next week gave birth to John Maynard both parents would live to see their first son become the most famous and influential economist of this it cannot be said of Keynes that he Rose to prominence from Humble be on the his father was a member of the elite of British and the careers of father and son were quite similar in some both first went to Cambridge As mathematics and both eventually became More interested in both showed their breadth of ability by publishing important books in another the books being Nevilles formal logic and Maynard treatise on pro Babil when the principal British economics the economic was Neville was pressured to accept the he and the Job went to who is now More but Alfred the greatest economist of the wrote to Neville everyone would very much prefer the younger Keynes later succeeded Edgeworth and held that prestigious Post Tor 33 it is also interesting that Marshall consulted frequently with Neville Keynes while writing his principles of which was the most famous and Complete state ment of the classical economic theory which Maynard Keynes would later Challenge with such Mayn Ard May not have had economics in his but it was certainly in his Home Maynard Mother was also re she was at various times Justice of the and mayor of and was the organizer of social services in Aid of the unemployed and victims of chronic she was a practical reformer and this probably had a Strong influence on he was always More interested in practical policy problems than in economic theory for its own Maynard was no child Prodigy and in his Early years there were some Good reports from school and some not so but at he went to and there he performed Bril he won Many prizes and including All the mathematical his Tutor was Able to write no amount of Marks and prizes seem to spoil the sensible Way in which he accepts Success such simplicity and such ability Are not often com after Maynard went up to Kings Cambridge like his father before he gradually shifted from mathematics to logic and after his fourth he wrote the civil service Examina Tion and placed he did Well in psychology and political but poorly in mathematics and he went to the India office for two before returning to Cambridge in 1908 As a lecturer in John Maynard Keynes economic theories have been at this Maynard career began to take off in All directions and we can do Little More than list some of his numerous in despite being unknown outside Cam he was made editor of the economic during the first world War he joined the British trea sury and Rose rapidly to he was sent to the Versailles Confer ence at the end of the War As the principal Treasury but quit in protest Over the victorious allies intention to impose heavy reparations payments on Keynes believed that a carthaginian peace would damage the entire euro Pean Economy and do the allies More harm than he published his criticisms in the economic consequences of the a Book which made him famous and won Many converts to his it was widely regarded As a Brilliant exercise in terms such As Ivory Tower and impractical Are often used to de scribe but these cannot be applied to from he was chairman of the National Mutual insurance he later became director of another insurance company and of an investment he was bursar of Kings College and Man aged to increase its endowment Sev eral times Over through his highly successful investment not Only were All his business activities very but he managed to make himself rather Rich through his Stock Market he used to say that he would never accept a professorial appointment he Only lectured Par time at Cambridge be cause he could not afford to do he was also an Active Patron of the he founded the Cambridge arts was treasurer of the Camar go Ballet chairman of the arts Council of great a director of the National gallery and the list goes he married a russian Lydia Lopo Kova and was part of the famous blooms Bury in Keynes wrote frequently for several and he re turned the Treasury during the Sec Ond world after the War he was the dominant figure in the establish ment of the International monetary fund and the world Bank at the Bret ton Woods the inspiration for this restructuring of the world financial system was largely the foregoing is not a Complete list of Keynes Many what is More remarkable is that he carried on Many of these not in be but the Book which assured Keynes place in history was the general theory of interest and published in its significance is that it overthrew major tenets of the classical economic theory and led to a reorientation of government economic policy throughout the Western the classical economists had argued in a free Market wages and interest rates would always fluctuate so As to keep the total Supply of goods and and investment funds equal to the total demand for involuntary unemployment could Only exist As a result of Market imperfections such As Mono cartels and Short of breaking up Large companies and there was not much that the government could do to reduce Unzem the great depression of the 1930s was a blow to this it was difficult to believe that 30 per cent unemployment could be blamed on Market especially since wages and prices were falling As they were supposed what Keynes provided in the general theory was a of unemployment More consistent with the if the amount of Money which people save is not All borrowed by others and invested in Plant and then total spending will be less than the total Supply of goods and services and firms will Start laying off the classical had argued that inter est rates would thereby Persuad ing people to save less and businesses to borrow More for but Keynes pointed out that businesses make their investment decisions More on the basis of expected profits than interest there is no necessary relation Between saving and investment and the two will not be equal except when investment is less than firms will not be Able to sell All they have in the reason Why our Economy fluctuates so much is that investment fluctuates so and the great depression was due at least in part to a Sharp decline in invest Keynes analysis caused a revolution in the economics profession and by the when the old generation of economists had largely passed keynesian theory had become the orthodox even president Richard Nixon declared himself to be a Keynes policy prescriptions were changed along the keynesian policy makers believed that the governments responsibility was to increase aggregate demand during a either by increasing government or by cutting taxes and thereby encouraging Consumers to spend Keynes focus on investment Digap Keynes had argued during a the task of government was to increase the level of invest and As he wrote in 1943 the very reason that capital expenditure is capable of paying for itself makes it much better budget Wise and does not involve the progressive increase of budgetary which Defi Cit budgeting for the Sake of con sumption May bring More Keynes argued in the general theory that the govern ment had to reduce the chronic instability of the Only Way to do he was to socialize he did not mean by this he meant that the by some had to ensure that the flow of investment remained he would have approved of the swedish policy of placing a tax on firms during a Boom and repaying it to them during a recess Ion if they spent it on Many people have a Strong Nega Tive reaction to the words socialization of it is often argued that increased government intervention in the Economy is to blame for our current government Regula Tion of investment sounds like a big step in the wrong and fur ther proof that Keynes is the Patron Saint of big but we May reply on Keynes behalf that it is not the extent of government intervention that is to blame so much As its there Are countries which have Fol Lowed policies much More in step with Keynes theories than has Cana these countries West Sweden not Only outperformed Canada eco they also have a greater degree of government involvement in the it is not big government which causes economic problems it is bad in some ways Keynes Fate has been similar to that of Karl both Are criticized for ideas and policies that were attached to their names Only after their Given that Bas Tard keynesianism As one of Keynes colleagues described it has not worked very that the conservative alternative As implemented by president Ronald Reagan and prime minister Margaret Thatcher has so far Only made things and that the most successful coun tries Are those which have hewed closer to Keynes original Sugges we in Canada would be Well advised to reconsider what Keynes himself had to Stephen Watson is a lecturer in economics at the University of Manito Winnipeg free june 1983 t Lack of French is a drawback for Crosbie tories Rushing in where Angels fear to tread is not one of Pete Adams charac when someone jokingly Calls him it is a reflection of his dogged determination to ensure that plans Are close to perfect before pres enting them to the that attitude was evident in his departments main Street Manitoba which was supposed to assist Rural communities in revitalizing their downtown although it was originally announced in the 1982 the first agreement was not signed until this and two others received approval in Princi ple last while critics jibe the minister about his slowness in fulfilling Adam insisted that it did not make sense to inflict a program on the Public without being aware of All its ram Ifica he preferred to a similar attitude is evident in regard to municipal be cause of problems which had existed Lor the tory government set lip a special review Public some time i Madea count of the reasons i would not become a Candi Date for the leadership of the conservative All there were of including that of my not being fluent in the French this is not to say that someone else run for the leadership just for Lack of fluency in one of Canadas official but what stopped me was the having won the of going on to become prime i suspect the life of a prime minister would be considerably More difficult were he unilingual not but damned try i recently attended a communications seminar in Montreal at which almost All the proceedings were con ducted in so they had simultaneous but for All the wonders of modern my ear was simply not designed As a receptacle for a plastic the thing keeps falling out there is always difficulty getting the volume adjusted and i find listening to Robert for speaking in French while a woman Speaks English in my ear to be wildly it is in a curious i know a few people who refuse to use the ear plug essential for simultaneous considering it something like a prosthetic device for an affliction however much they May need they Are determined not to admit so they with feigned attentive or applauding on Cue from the audience just As though they understand what was going Mackenzie King was prime minister for nearly an eternity and his knowl Edge of French was limited to the Brief though useful phrase Mes but King lived in another one of relatively primitive communications and he really got along quite Well by hardly speaking to anybody except his in Kings and for some time a anglophone prime minister could get by with what was called a French but that is now something from an old times have changed and a unilingual prime minister would face the dreary Prospect of spending a Good part of his life in Public with his ear connected by a Hose to some unseen or living with the omnipresent translator hovering Over his engaged in notto Voce such As Dalton Camp what did the mayor say he say Welcome to to what to the Tell him Ive been Here Mes there is a further awkwardness since a unilingual prime minister is perforce incapable of communicating directly with his francophone cons Titu he is obliged to rely upon the Media to translate a perilous and with the result that a Good part of the population will never really hear their prime minister address add to the anguish and agony of the francophone Media radio Ana the French language and radio spending their Days acting As conduits while condemning and translating the views of the nations the unilingual Issue has buffeted John whose Campaign until recently had been such smooth in the growing momentum of Crosbie candidacy has brought the Issue to the front having emerged from the pack to Challenge the presumed front runners Joe Clark and Brian Mulroney Crosbie is now get Ting the question his two rivals most want him to be but also in part because Crosbie has handled a Sensi Tive Issue with the facility of a Man trying to open a can with a screw Riv unilingual ism in any Federal Politi Cian is a but in a prime minister its a Crosbie would have been Wiser to have admitted to this and to have said he would apply himself to learning no one would doubt that a two time Gold med Alist and one with his gift of his native Tongue could bring it unfortunate what Crosbie seems to be saying is that he Doest see the need and he Doest intend to reality suggests that should he be come the next prime and following one or two sallies into Quebec and a few scrums with the French Crosbie would be found lining up for enrolment at Why not say so John Crosbie inability to speak French is made worse by his apparent Lack of intention to learn by Sneed Vad under the dome Arlene Billinkoff hearings were held throughout the along with nearly 400 meet Ings with representatives of municipal councils and school divisions in order to arrive at a system which would be understandable and after tworan Dahal the re port from that committee was presented to the newly elected new demo but the massive document was not exactly what the government want last Adam announced his intention to appoint yet another committee to hold hearings in order to dialogue with the Public on the implications of recommendations in that the Basic recommendations called for assessments to be based on Market value rather than two thirds of assessed thus eliminating inequities and bringing assessments up to Adam was concerned because that move would shift the tax Burden from commercial to residential property he could not provide a specific Date when the government would take a position about changes in assessments or whether those recommendations would even be he wanted to give local municipalities sufficient time to Analyse the report and offer a until such time As we can have some feedback its not the intention of the government to do critic Doug Gourlay admitted it was not fair to Rush into the but believed there was a certain amount of urgency because of severe problems in dont leave it too Long and drag it on he the minister realized there was some need to proceed As quickly As we will certainly try and do we dont intend to have any undue delay on the that comment was made May a month later Adam introduced a Bill extending the freeze on municipal assessments to a time to be determined by the thus underlining the fact that there was no end in sight to the because of that Nona concern grew outside the Legisla As the patience of various Munici pal officials was wearing thin with this cautious despite that the minister continued along his chosen a series of hearing were held in Early 19r3 and when his department spending estimates came up for consideration last Little had Albert Driedger wanted to know about the ministers total unwilling Ness to once Adam admitted it was but did not want to discuss the after the municipal affairs which had heard Public would be meeting on this according to the there should not be duplication of he under Normal Circum that might make retorted Don but it lacked reality this time because the minister had refused to Call the he did not like this the committee will insisted and there would be ample Opportunity to but when per haps sooner than later Union the tories continued to question the who said they not proceed too quickly on such a Complex patience was required until a subcommittee and the Cabinet considered and approved the with that vague the tories seemed ready to delay consideration of the estimates and argument after a supper the minister had second thoughts and announced the committee would meet june he hoped that would Cut off any More debate for the but several tories wanted a few in answers about urged wait is always your noted As he provided a history of the ministers handling of the main Street Manitoba nothing was done for almost a year because he had wanted a perfect the same thing was occurring he with the minister insisting that nothing would happen until there was perfect assessment there was a problem which required he it was time to get off the quietly and Adam de fended his slow and precise noting that because of such the main Street program was exciting and at there was not enough information and More work was needed on but we Are moving on with a Date set for a the politicians would move a the minister did not say at what Speed they would judging by past no one should hold ones breath until the plan becomes a reality ;