Joan Robinson Was the First Bastard Keynesian: There Is No ‘Perhaps’
30 Pages Posted: 25 Nov 2020
Date Written: September 9, 2020
Joan Robinson was the first Bastard Keynesian. There is no “…perhaps…”(Aslanbeigui & Oakes, 2009, p.219) at all involved in that conclusion. The conflict between J M Keynes and J. Robinson was fundamental and basic. Keynes did not believe that his models and theories were true, since no theory or model can be true, given that models and theories are, at best, approximations of reality. Any scientist, either physical, life, behavioral or social, who believes that his theories and models are true, is a pseudo scientist at best and probably holds anti scientific views. This characterization is especially apropos when considering orthodox and heterodox economists, who believe that their models and theories are true.
Keynes believed that his models (multiplier, D-Z, IS-LM (LP), interval valued probability, inexact measurement, weight of the argument) were better, more reliable, more general and more useful than the Classical (excluding Adam Smith, who was never a classical economist) and Neoclassical models and theories because they allowed one to explain far more about what was actually happening in the real world (reality).
Robinson, on the other hand, did not understand what models and theories are, since she thought that equilibrium models that conflicted with history had to be false. For Keynes, models and theories are not true and false. Some are better than others. For Robinson, models are either true or false, in much the same way that rational expectationists believe that their hypothesis is true: This was not Robinson’s conception of The General Theory. Unlike other work in economics, it should be read sub species aeternitatis. Keynes had discovered a body of economic truths that could be applied to resolve economic problems and provide the basis for a new pedagogy. Robinson had no doubts about what these truths were and how they should be understood. Doubts were inconsistent with her agenda. They would forestall her plan to indoctrinate beginning students, “uncontaminated” by training in economics. They would also compromise her own Keynesian research program.... These uncertainties dictated a commitment to the solidity of The General Theory. As regards fundamentals, Robinson wrote confidently that “we know near enough where we are” (in Keynes 1973b, 149). Confirmation of basic Keynesian truths did not depend on the controversy produced by a general conflagration in economics. These truths were revealed hermetically through personal contact with the master and his intimates. The qualification for understanding The General Theory was not participation in a disciplinary dialogue but membership in a charismatic (sic) set of the chosen, the privileged experience of being one of the Cambridge illuminati—“we happy few in Cambridge . . . we and Maynard,” as Robert Solow characterized the gnostic ethos of Keynes disciples…” (Aslanbeigui & Oakes, 2009, pp.224-225).
Of course, Keynes NEVER believed at any time in his life that he had discovered “… a body of economic truths”. Robinson was not a follower of Keynes. Joan Robinson was committed to setting up an approach to economics that Keynes totally rejected during his lifetime.
Due to her extreme mathematical illiteracy, major portions of the General Theory had to be jettisoned and replaced with other substitutes which she could defend. Robinson decided to make the claim that she had worked carefully with Keynes in the writing of the General Theory and that only she knew exactly what he meant-which was her concept of fundamental uncertainty. Both Orthodox and Heterodox economists fell for this rationale. This allowed them to skip Keynes’s direct link between uncertainty and the evidential weight of the argument as contained in chapters 6 and 26 in the A Treatise on Probability, and the connection between uncertainty, confidence and the liquidity preference theory of the rate of interest that are clearly displayed in the Keynes-Townshend correspondence of 1937-1938. Keynes’s heavy emphasis on pp.148 and 240 to Townshend represents a complete and total rejection of Robinson’s talk about “fundamental uncertainty”. Robinson jettisoned the investment multiplier, the D-Z model, the IS-LM model, the page 148 definition of uncertainty as an inverse function of the evidential weight of the argument, the concept of equilibrium, and liquidity preference theory of the rate of interest, about which she was completely ignorant.
In its place, she created her own definition of uncertainty that she claimed had come from Keynes’s 1937 QJE article. This definition is called fundamental uncertainty. It was developed by G L S Shackle. According to Shackle and Robinson, there was a complete lack of any knowledge of any part of the future, be it either the immediate, near, far or distant future. Therefore, Keynes’s weight of the argument definition of uncertainty on p.148(p.240) is eliminated. With no relevant partial knowledge or evidence, equilibrium could not exist in such a future. There was no way that any use of formal mathematics or probability or statistics could specify any equations. She claimed that Keynes had made actual history the main topic of discussion in the General Theory, so that no equilibrium analysis was possible. J. Robinson confused the use of equilibrium analysis, which is a useful model, with actual reality. This error was how many unsophisticated neoclassical economists viewed their work. However, this was not how Keynes viewed the concept od equilibrium. It was simply a useful model.
She replaced Keynes’s IS-LM theory of interest rate determination with Keynes’s preliminary, beginning, introductory, initial equation from chapter 13 on page 168 of the General Theory. Keynes’s theory of the rate of interest became a purely monetary one. Most importantly, she eliminated the appendix to chapter 19 of the General Theory, since it showed that Pigou‘s model was missing a multiplier, D-Z model, and IS-LM model.
I am unaware of any orthodox or heterodox economist who does not accept the Joan Robinson version of the General Theory. This intellectual failure is usually defended with the comment that “Well, didn’t Keynes himself thank J. Robinson for her help in writing the General Theory in the preface?” Keynes’s own annihilating and obliterating rejection of the intellectual mess that J. Robinson had made of his theory of liquidity preference on pp.134-148 in Volume 14 of Keynes’s CWJMK should have alerted economists that Robinson did not know what she was talking about. Unfortunately, these exchanges have been deliberately covered up by heterodox economists and have never been cited by any orthodox economists.
Keywords: J Robinson, J M Keynes, Liquidity, Approach to the rate of interest pp. 134-148, Vol.14, CWJMK(1973)
JEL Classification: B10, B12, B14, B16, B18, B20, B22
Suggested Citation: Suggested Citation