THE CONSEQUENCES OF MR KEYNES.pdf - Institute of Economic ...

operating to render the surpluses fictional and the deficits disproportionately
large or ill-timed. The ruling 6lite would be
guided by the presuppositions of Harvey Road; they would not
act as competitors for electoral favour in a democratic political
environment.
There was little awareness that the dictates of political survival
might run contrary to the requirements of macroeconomic
engineering (assuming for now that the economic
order is aptly described by the Keynesian paradigm). It was
tacitly assumed either that the political survival of politicians
was automatically strengthened as they came to follow more
fully the appropriate fiscal pohcies, or that the ruling glite would
act without regard to their political fortunes. But what happens
when we make non-Keynesian assumptions about politics?
What if we commence from the assumption that elected
politicians respond to pressures emanating from constituents
and the state bureaucracy ? When this shift of perspective is
made in the political setting for analysis, the possibilities that
policy precepts may unleash political biases cannot be ignored.
On this score, it should be noted that Keynes's own biographer
seemed prescient, for in continuing his discussion of the presuppositions
of Harvey Road, he mused:
'If, owing to the needs of planning, the functions of government
became very far-reaching and multifarious, would it be possible
for the intellectual aristocracy to remain in essential control?
Keynes tended till the end to think of the really important decisions
being reached by a small group of intelligent people, like
the group that fashioned the Bretton Woods plan. But would
not a democratic government having a wide multiplicity of
duties tend to get out of control and act in a way of which the
intelligent would not approve?
This is another dilemma—how to reconcile the functioning of
a planning and interfering democracy with the requirement that
in the last resort the best considered judgement should prevail.
It may be that the presuppositions of Harvey Road were so
much of a second nature to Keynes that he did not give this
dilemma the full consideration which it deserves.' 1
1 Ibid., p. 193.
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