The Power of Ideas

Most of the ideas in John Maynard Keynes' The General Theory of Employment, Interest and Money (1936) have been thoroughly discredited, both in theory and in practice. (Notice he called it THE General Theory and not A General Theory. By contrast, Claude E. Shannon called his famous theory, which underlies all modern communications systems, A Mathematical Theory of Communication. The fields of information theory and communications engineering have since come to acknowledge that the Shannon theory is in fact THE Mathematical Theory of Communication.)

But one idea is still as fresh and as relevant and as important and as true as when Keynes expressed it at the close of that seminal work, namely, the potency and longevity of ideas themselves:

Is the fulfilment of these ideas a visionary hope? Have they insufficient roots in the motives which govern the evolution of political society? Are the interests which they will thwart stronger and more obvious than those which they will serve?

I do not attempt an answer in this place. It would need a volume of a different character from this one to indicate even in outline the practical measures in which they might be gradually clothed. But if the ideas are correct — an hypothesis on which the author himself must necessarily base what he writes — it would be a mistake, I predict, to dispute their potency over a period of time. At the present moment people are unusually expectant of a more fundamental diagnosis; more particularly ready to receive it; eager to try it out, if it should be even plausible. But apart from this contemporary mood, the ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

Keynes' ideas have lived on. His are the ideas behind the IMF and the World Bank, institutions which, it is becoming increasingly clear, have lost an empire and are in search of a role. And there are many governments that are pursuing Keynesian policies, particularly in Africa, that have probably never heard of Keynes. Keynes words have proved remarkably prophetic:

Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist.