Keynes
- Episode aired Sep 17, 2012
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Economics with a human face
For most people, John Maynard Keynes is identified with the antics of the Bloomsbury group far more strongly than he is with economic theory. If they think of Keynesianism at all, it is only to dismiss it as sloppy housekeeping, unsound borrowing with a whiff of the Marxist planned economy about it.
This is one of many ironies about Keynes, who was actually a keen capitalist, but who saw the dangers of laissez-faire, and believed in timely government investment where it would stimulate a 'multiplier' effect, or what we call the trickle-down. It was his work at the Treasury in World War I that brought home to him the interdependence of national economies, causing him to oppose the punitive fines demanded of Germany, which that starving nation could not begin to pay off. In his book 'The Economic Consequences of the Peace', he predicted a breakdown of government and possibly another world war.
Stephanie Flanders is the ideal choice for this one-hour profile of Keynes. She is recognisably a product of St. Paul's School, whose training always shows up well in female presenters - brisk and articulate, with that nimble and appealing diction, but a dress-down makeover that signals the underlying feminism at the heart of the culture. Her facial expressions are as eloquent as her words, with subtle nuances that enrich many an argument.
We can't immediately understand why she wants to take us on a car-rally in Cumbria, until we see that those lightning manoeuvres are made possible only by heavy-duty tyres manufactured in Carlisle by Pirelli, who have just been persuaded to remain in the UK by means of a Keynesian handout. On a larger scale, the world's biggest solar energy plant has just cost the American government nearly a trillion dollars, which we only hope it can recoup.
Flanders tries to figure-out what Keynes would make of some modern situations. (The sub-prime crisis and 2008 crash were front-of-mind when this film was made.) For example, the fate of the corrupt Greek economy, waiting to be baled out by powerful Germany, where the boot is now on the other foot. Could history be repeating itself?
Keynes's unique insight came from realising that economies were not purely mechanical. They were part-human, with an irrational element that he called 'animal spirits', which can be seen in spontaneous optimism or pessimism that defies logic. But infallible he was not. He almost bankrupted himself speculating too early against the German mark. And his forecasts managed to overlook a little thing called the Wall Street crash of '29, in which he lost almost everything.
This is one of many ironies about Keynes, who was actually a keen capitalist, but who saw the dangers of laissez-faire, and believed in timely government investment where it would stimulate a 'multiplier' effect, or what we call the trickle-down. It was his work at the Treasury in World War I that brought home to him the interdependence of national economies, causing him to oppose the punitive fines demanded of Germany, which that starving nation could not begin to pay off. In his book 'The Economic Consequences of the Peace', he predicted a breakdown of government and possibly another world war.
Stephanie Flanders is the ideal choice for this one-hour profile of Keynes. She is recognisably a product of St. Paul's School, whose training always shows up well in female presenters - brisk and articulate, with that nimble and appealing diction, but a dress-down makeover that signals the underlying feminism at the heart of the culture. Her facial expressions are as eloquent as her words, with subtle nuances that enrich many an argument.
We can't immediately understand why she wants to take us on a car-rally in Cumbria, until we see that those lightning manoeuvres are made possible only by heavy-duty tyres manufactured in Carlisle by Pirelli, who have just been persuaded to remain in the UK by means of a Keynesian handout. On a larger scale, the world's biggest solar energy plant has just cost the American government nearly a trillion dollars, which we only hope it can recoup.
Flanders tries to figure-out what Keynes would make of some modern situations. (The sub-prime crisis and 2008 crash were front-of-mind when this film was made.) For example, the fate of the corrupt Greek economy, waiting to be baled out by powerful Germany, where the boot is now on the other foot. Could history be repeating itself?
Keynes's unique insight came from realising that economies were not purely mechanical. They were part-human, with an irrational element that he called 'animal spirits', which can be seen in spontaneous optimism or pessimism that defies logic. But infallible he was not. He almost bankrupted himself speculating too early against the German mark. And his forecasts managed to overlook a little thing called the Wall Street crash of '29, in which he lost almost everything.
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