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Two aspects of this essay by Keynes seem highly relevant today.
I. Keynes stressed the threat which the slump posed to ‘the social stability of every country alike’.
‘… a series of bankruptcies, defaults, and repudiations which would shake the capitalist order to its foundations … would be a fertile soil for agitation, seditions, and revolution. It is so already in many quarters of the world.’
The only place where I know this aspect of this essay of Keynes and his other writings has been discussed is in Donald Markwell’s book called ‘Economic Paths to War and Peace - John Maynard Keynes and International Relations’ (around pages 172-173).
II. Keynes ended by stressing the necessity of the monetary authorities of the big economic powers acting together.
‘…nor can any one central bank do enough acting in isolation. … the most effectibe remedy would be that the central banks of these three great creditor nations [the United States, France, and England] should join together in a bold scheme to restore confidence to the international long-term loan market; which would serve to revive enterprise and activity everywhere, and to restore prices and profits, so that in due course the wheels of the world’s commerce would go round again.’
As Markwell’s book also shows, this necessity of international economic action is one of the key lessons from Keynes’s thinking, at least from the aftermath of the First World War on.
Does anybody else think these two points from Keynes are of the utmost importance to our current global meltdown?
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