The Aporetic

Recently economic historian Niall Ferguson claimed that J. M. Keynes was a bad economist because he was gay. Lacking children, Ferguson claimed, Keynes didn’t care about the long term. Further, Keynes was “effete,” married to a ballerina, fond of poetry and thus, for unclear reasons, a bad economist. You can find a good account here.

Mrs. Keynes

When I saw this I couldn’t quite believe it. Although there was apparently no recording made, attendees confirmed the gist of it, and soon, Ferguson issued an apology; it seems to be sincere and thorough. The question, of course, is why did he say this in the first place, at a gathering of very wealthy finance types who were no doubt paying him a very very large sum of money for his economic wisdom?

Brad Delong pointed out that Ferguson was not only snide, glib, inaccurate and bigoted: he was unoriginal as well. Delong quotes Gertrude Himmelfarb saying the  same thing: because Keynes was gay and an aesthete and childless he was personally profligate, and so his economics are morally flawed. Just read it if you don’t believe me.

It’s  as if we are back in 1905, listening to Theodore Roosevelt preach about the menace of race suicide. The logical conclusion here is that the more kids you have, the better an economist you’ll likely be, and the Nobel committee must consider the nature and vigor of any candidates monogamous heterosexual activity, and also we want economists who watch Nascar, not wed ballerinas..

I’m not a big fan of Ferguson. I think he’s one of those guys, like Tom Freidman, who get paid well to offer flattering platitudes about the naturalness of the status quo. Here’s an example, from the introduction to  The Ascent of Money.

“If the financial system has a defect, it is that it reflects and magnifies what we human beings are like. As we are learning from a growing volume of research in the field of behavioral finance, money amplifies our tendency to overreact, to swing from exuberance when things are going well to deep depression when they go wrong. Booms and busts are products, at root, of our emotional volatility.”

-Niall Ferguson, The Ascent of Money

If the financial system has a defect? If? Throughout this book Ferguson claims the modern financial system is the product of natural selection, like, say, antibiotic-resistant tuberculosis, and thus is the best of all possible systems and a natural inevitability. Further, “behavioral science” has shown that the economic system is simply a larger expression of our biological selves, and of course by implication any inequalities must also be expressions of our biological selves. That is, the poor are biologically poor.

In 2008, the year the book was published, we suffered a massive economic collapse due to the fact that bond ratings agencies were colluding to misrepresent mortgage bonds, “collateralized debt obligations,” as “AAA” when they knew them to be junk. It’s manifestly absurd to describe a collateralized debt obligation as “natural” in any way at all. So Ferguson would reduce deliberate lying to something called “our emotional volatility.” That is, it’s not the fact that Standard & Poor’s willfully gave AAA ratings to bonds it knew to be garbage that matters: it’s that “we” all have “emotional volatility” which the market reflects.

Thinking about 2008, some of you might be asking “waddya mean “we,” professor?” Because I, probably like you, wasn’t experiencing  “emotional volatility:” I was trudging along paying my mortgage like millions of other people,  when lo, greedy dishonest cheats wrecked the financial system.

So the offensive part of the Ferguson schtick isn’t just the gay-baiting, which he seeks to squirm out from under: it’s the consistent effort to naturalize inequality, and turn economic malfeasance into some motive-less natural process, some “emotional volatility” we all share, rather then the result of two decades of deregulation and a culture of ruthless mendacity.

And this of course is why Niall Ferguson gets paid large amounts of money to talk to a roomful of people who helped break the economy: he tells them it’s not their fault, it’s human nature. His argument about Keynes is entirely consistent with his claim that the economy is a natural expression of our biological selves. No need for regulation, or punishment; this is how things have to be, because “emotional volatility,” and gay people make bad economists because they aren’t part of natural selection, which is pretty much exactly what he said to the roomful of wealthy people he was paid to entertain.

This and the fact that large numbers of of weak-minded Americans are still suckers for a british accent.

Note: I’m sure that Keynes “being gay” had a lot to do with who he was. I’m totally skeptical that being gay can be reduced to some kind of predictive formula, like “gay people are profligate and don’t care about the future because they can’t have kids.” No amount of “emotional volatility” can explain such an asinine statement.