Friday morning brought my first speaking engagement on my new book, The Economics of Enough, at the Institute for Public Policy Research. Ann Pettifor of the New Economics Foundation had been invited to comment on my book before we opened up for the general discussion, and she was as thought-provoking and full of insight as ever.
At one point, Ann noted that this year is the 75th anniversary of the publication of The General Theory, and – as a firm Keynesian – bemoaned the lack of attention being paid to this milestone (although I blogged about it recently). However, she went on to say that one of Keynes's writings she most admires is a less well known essay, National Self Sufficiency. As an environmental and development campaigner, Ann argued that developing countries need to focus more on growing and processing food for their own consumption, at a time when agricultural commodity prices are rocketing, and less on shipping cash crops (often by air) to western markets. Britain should be growing its own green beans, and Kenya growing staples its own people can eat.
I haven't read the 1933 essay for years, possibly decades, although I know it was popular with the anti-globalisation crowd in the 1990s, so turned back to it. Keynes writes that he – like all economists – sees the case for free trade as a moral as well as logical truth. But he adds:
“Looking again to-day at the statements of these fundamental truths
which
I then gave, I do not find myself disputing them. Yet the orientation
of my
mind is changed; and I share this change of mind with many others.”
And the famous passage is:
“But let goods be homespun whenever it is reasonably and conveniently
possible,
and, above all, let finance be primarily national.”
No wonder these words strike a chord again. But the thrust of the essay is to argue that policies need to be right for their times. Free trade was important to improve living standards for workers in the mid-nineteenth century and – Keynes argued – less international entanglement appropriate for the fraught 1930s. At the time he wrote, Keynes did not foresee the scope for further international specialisation that would come about because of information and communication technologies, and he did not foresee the growth of trade in services. It's a magnificent essay and I agree with much of his argument – for example:
“We destroy the beauty of the countryside because the unappropriated
splendours of nature have no economic value. We are capable of shutting
off the
sun and the stars because they do not pay a dividend.”
The conclusion I draw is that the problems of our own times demand their own solutions. Let us make sure we do price the splendours of nature, and let a minimum carbon price make shipping green beans by air freight too expensive. Let the US regulators ban the inclusion of staple foods in heavily-traded commodity indices so rich American investors are not causing starvation as crop prices soar. But nobody else should tell Kenyans they can't engage in trade.