It's been one of those days when trains of thought have taken me to unexpected places, no doubt due to having spent much time in meetings and travelling recently. On the actual (not metaphorical) train today, I was reading Thomas Levenson's marvellous Newton and the Counterfeiter. It prompted a vague memory of an essay by Keynes on Isaac Newton. Browsing on my shelf at home I found there was indeed, in Essays in Persuasion, called 'Newton The Man'. Keynes wrote:
“Newton was not the first of the age of reason. He was the last of the magicians, … the last great mind which looked out on the visible and intellectual world with the same eyes as those which began to build our intellectual inheritance rather less than 10,000 years ago. “
My goodness, my metaphorical train proceeded, was Keynes the last of the economists who could write? He certainly had a cultured hinterland. After all, he was the founding chairman of the Arts Council, married to a ballet dancer.
The next stop on the journey was pondering what this Keynes would have thought of the spending cuts likely to be announced by the coalition government next month. I don't mind the loss or savaging of specific funding organisations, but public spending on the arts – and of course the sciences – goes to the question of both civility and long-term investment in areas of activity whose social return exceeds the private return. The Arts Council was founded in 1946 when Britain was even more bankrupt than we are today.
I'm not a retro-Keynesian who thinks all spending cuts now are bound to end in disaster. The deficit is too big, the debt burden we'll bequeath future taxpayers is unacceptable, the welfare state is ineffective and possibly harmful to some of its supposed beneficiaries, and parts of the public sector are sclerotic and inefficient. One can debate the speed of the cuts – and I don't believe macroeconomists who claim certainty on this front – but not the necessity.
What worries me though is not having any criteria for swinging the Osborne Axe (as it should be called, in a parallel with the similarly savage Geddes Axe). I wish that, like Keynes, we had thought properly about the long-term returns and social returns to public expenditure. This is a preoccupation of my next book, of which more in due course.
Meanwhile, I think I'll escape back to Essays in Persuasion.
It's a wonderful book — you can hear me talking to Thomas Levenson about it here…
http://digitaldebateblogs.typepad.com/digital_money/2010/05/thomas-levenson-mit.html
As for the Osborne Axe, I'm not convinced about public funding of the arts. Perhaps better to scrap it, and in return provide tax relief for bona fide private support?
It depends whether or not you think the social return is higher than the private return, and I do. But in any case, I'd rather subsidise artists and actors than bankers, so we could start there….