Slate Money: "The Price of Peace" (December 26, 2020)

Host: Felix Salmon (Axios)
Guests: Anna Szymanski (Breaking Views), Emily Peck (HuffPost), Zach Carter (author, HuffPost)

Episode Overview

This episode is a deep-dive into the life, work, and legacy of John Maynard Keynes, prompted by guest Zach Carter's recent biography, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes. The hosts unpack Keynes’s transformation of economics, his personal milieu, the enduring debates over his ideas, and the still-contentious relevance of his philosophies—from Bretton Woods to Modern Monetary Theory. The episode interweaves historical narrative with lively discussion, accessible explanations, and sharp contemporary relevance.

Key Discussion Points & Insights

1. Keynes: The Man and His Milieu

[00:10–03:46]

• Felix introduces Zach Carter & his book: The conversation kicks off with Zach introducing his biography of Keynes and a playful tone between the hosts.
• Keynes’s background:
  • “Englishman, a bit of a homosexual. Basically reinvented the entire global economy.” (Felix Salmon, 02:05)
  • Zach discusses Keynes's deep ties to the Bloomsbury Group (Virginia Woolf, other British intellectuals) and the influence of high-minded, upper-class aesthetics and values on his worldview.
• Keynes as public philosopher:
  • Economics for Keynes wasn’t just technical, but “an attempt to express the Bloomsbury credo to the world at large and make it operable as public philosophy.” (Zach Carter, 02:55)
• Keynes’s politics:
  • Didn’t fit neatly into left/right or modern ideological categories.
  • Sought a synthesis of Rousseau’s egalitarianism and Burkean caution about radical change.

2. Keynesian Economics: More than Deficits and Stimulus

[03:17–07:37]

• Amorphous, evolving theories:
  • Keynes’s thinking evolved, responding to the failures and crises of his era, culminating in The General Theory—noted as both ground-breaking and “amorphous.”
  • “He keeps changing his ideas because his ideas keep not working… And eventually, you get to the General Theory, which is the foundation of modern economics, but also a very selective foundation.” (Zach Carter, 05:10)
  • Notably, Milton Friedman (and Nixon) are both quoted as saying “We’re all Keynesians now”—but for different reasons and political ends.

3. Uncertainty, Humans, and the Limits of Economic Science

[07:37–12:12]

• Keynes on uncertainty:
  • Challenged the notion of immutable economic laws.
  • “We live in a condition of radical uncertainty. The basic problem for economic humanity… is not trying to figure out how to rationally deal with scarce resources, it’s trying to figure out how to manage an uncertain future.” (Zach Carter, 09:13)
• Keynes’s focus:
  • Prioritized human needs and societal flourishing over abstract market mechanisms.
  • Emily Peck: “He knew money was kind of made up.” (12:10)

4. Keynes, Money, and Bretton Woods

[12:12–17:01]

• Keynes’s pragmatic approach to money:
  • Money as a tool, not an end in itself.
• Bretton Woods drama:
  • Keynes’s vision for an international system that balanced the interests of deficit and surplus countries—aimed at avoiding deflation and mass unemployment.
  • His proposal for a supernational central bank was overpowered by American interests, leading to the creation of the IMF and World Bank, which later functioned very differently (often enforcing austerity rather than preventing it).
  • “What happens at Bretton Woods is basically a giant geopolitical street fight… and Keynes’s international vision was crushed by the American empire.” (Zach Carter, 12:53–14:48)

5. Keynes’s Trust in Technocracy, Democracy, and Human Nature

[17:01–20:17]

• Keynes’s paradox:
  • Simultaneously skeptical of government and reliant on it for progress.
  • “He has this deep faith in the technocrats who he despises, to lift the world to a higher place. But he also just believes in this kind of deep human rationality.” (Zach Carter, 18:31)
• Naivety about enlightened leadership:
  • Repeated government failures didn’t fully shake Keynes’s idealism for technocratic guidance and democracy.

6. The Legacy and Evolution of Keynesianism

[20:17–27:45]

• Postwar Keynesianism:
  • Fell out of favor in the stagflation era, later rebranded as “neo-Keynesianism”—a more limited, market-oriented version.
• Neo-Keynesians:
  • Saw government intervention as a temporary fix, not a transformative tool.
• Austerity as the opposite of Keynesianism:
  • Keynes opposed austerity, but modern institutions like the IMF often promoted it.
• Modern Monetary Theory (MMT):
  • The “post-Keynesians” embrace a more radical governmental role in markets, with MMT echoing many earlier Keynesian ideas.
  • “I think that the closest thing to Cambridge style economics in the United States today is the MMT crew… And when they talk about how inflation works, to me that seems very broadly Keynesian in the 1936–1944 understanding.” (Zach Carter, 26:00)

Notable Quotes & Memorable Moments

• On Keynesianism's breadth:

  • “The economics is deeply tied up with the whole worldview… If something is Keynesian, it really does sort of mean this kind of left wing, but also like upper class, kind of what? Noblesse oblige.” —Felix Salmon, [03:17]

• On uncertainty:

  • “We live in a condition of radical uncertainty… not trying to figure out how to rationally deal with scarce resources, it’s trying to figure out how to manage an uncertain future” —Zach Carter, [09:13]

• On money and markets:

  • “The important thing is, you know, people not going without… having a sustainable society where, you know, people can thrive and be human… You help hungry people, you figure out the money. Like money’s not real.” —Emily Peck, [11:00–12:10]

• On institutions and disappointment:

  • “He knows just how terrible the British government is… but he also has this kind of idealized vision of the British Empire… He just can’t really let go of that idea that the British government can be this sort of useful guiding hand for progress.” —Zach Carter, [18:31]

Important Timestamps

• [00:10] — Episode intro; Zach Carter joins.
• [02:11] — Keynes’s multifaceted persona and historical context.
• [03:17] — Keynesianism as tied to a larger worldview, not just economics.
• [09:13] — Keynes and “radical uncertainty.”
• [12:53] — Bretton Woods, international economic order, and Keynes’s defeat by U.S. interests.
• [17:48] — Keynes’s faith in government and technocratic solutions.
• [21:09] — Fall and rise of Keynesianism; contrast with neo-Keynesianism and MMT.

Numbers Round: Lighthearted Segment

• [28:04] — Anna: 23,000 letters to Santa via USPS; highlights the hardships for kids during COVID-19.
• [28:26] — Felix: $23 billion in SPAC sponsor proceeds in 2020—massive, possibly speculative finance news.
• [29:31] — Emily: 94 — Marilyn Haggerty’s age, North Dakota’s beloved restaurant critic.
• [30:19] — Discussion of Haggerty’s enduring charm and positive reviews.

Tone and Style

The episode mixes intellectual rigor with warmth and humor, thanks to the regular Slate Money hosts’ rapport and Zach Carter’s engaging narrative skills. The tone is accessible, conversational, and sometimes irreverent, making dense economic ideas both relatable and lively. Frequent asides about contemporary relevance, vivid historical storytelling, and playful banter keep discussions engaging even for non-economists.

Takeaways

• Keynes was not just an economist but a thinker who sought to reshape society, politics, and the role of government.
• His ideas, far from static, evolved throughout his life and inspired multiple, sometimes conflicting, schools of thought.
• The legacy of Keynesianism is a story of continual adaptation, debate, and reinterpretation, with 21st-century echoes in debates over austerity, government intervention, and the nature of money itself.

Summary compiled for those seeking a thorough, time-efficient understanding of this lively episode on John Maynard Keynes’s life, visions, and ongoing influence.