The crisis, Keynes and sustainability
The Fundación Ramón Areces is hosting a series of conferences on the economist John Maynard Keynes this month. The first of these, “A Keynesian perspective of the slump of 2007-8 and how to recover from it”, was delivered by Professor Robert Skidelsky on October 4th. In the face of the current economic crisis Skidelsky suggested that we have two possible scenarios: disintegration and the fragmentation of the global economy with the rise of trade and currency wars; or coordination in which greater international cooperation by governments results in reforming the world financial system and stimulating private sector investment and growth. Skidelsky’s sombre expectation is that disintegration is most likely because of lack of political leadership and a complete inability to rethink our ways of living.
This latter point is reinforced in Skidelsky’s recent book Keynes: The Return of the Master and gives much food for thought. The crisis, he argues, is not just an economic one but also a moral one. “At the heart of the moral failure is the worship of economic growth for its own sake, rather than as a way to achieve the “good life”. “Good life” as defined by Keynes, is not about having money to be better off but in order to live “ethically”. While we may debate what “ethical living” means in today’s context, it is clear that we have reached a point where wealth accumulation and consumerism need to be viewed in relation to sustainability. And sustainability needs to be seen not just in terms of environmental management, but also of poverty reduction and social inclusion.