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October 18, 2010 6:57 am
Keynes: The Return of the Master, by Robert Skidelsky, Penguin RRP£9.99, 228 pages
Three factors caused the recent near-collapse of global finance, Skidelsky suggests: “banks mutated from utilities into casinos”, there was an intellectual failure of mainstream economics and a moral failure of worshipping growth for its own sake.
Bankers who wolfed down the “poisoned sausages” of unquantifiably securitised mortgage risk that toppled US institutions are not to blame so much as the prevailing classical economists’ mistaken belief that all risk can be correctly priced in an efficient, self-regulating market. Enter the mercurial Keynes, fired by Cambridge philosophers and the Bloomsbury Group’s social radicalism. An early hedge fund pioneer, Keynes was nearly wiped out by the Great Depression, which shaped his economic philosophy into a moral rejection of short-termism.
Skidelsky’s succinct, lively, unashamed paean analyses Keynes’s core values and offers a persuasive pitch for the contemporary relevance (and necessity) of his ideas.
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