2013년 3월 10일 일요일

[발췌: G.R. Steele's] Keynes and Hayek: The Money Economy (2001)

출처: G.R. Steele, Keynes and Hayek: The Money Economy (Routledge 2001)

자료: 구글도서

  1. Introduction
  2. Vision in Economics
  3. Philosophy and Political Economy
  4. Money Issues
  5. Macrodisequilibrium
  6. Keynes and SENIE macromodels
  7. Value Theory and Monetary Theory
  8. Capital, Money and Cycles
  9. Austrians and post-Keynesians
  10. Economic Guidance
* * *


※ 발췌 (excerpts): 

Chapter 3_ Philosophy and political economy


Although the details of the broad sweep of the respective conclusions reached by Hayek and Keynes concerning the proper relationship between government and the economy are widely documented and discussed, there is little recognition of shared precepts of political economy. Indeed, there are striking similarities between the two men. However, whereas Keynes reaches a strong philosophical position long before he gains his reputation in economics, Hayek articulates his philosophy only after his reputation as an economist was bruised by the debates with Keynes and his followers. This is not to infer that the former grew out of the latter. Hayek's philosophy, politics and economics are fully integrated and draw upon his early research into psychology; where the focus is upon 'the central problem of the nature of mental phenomena' (Hayek 1952a: vii). Nevertheless, much of Hayek's exposition is given as an explicit counter to the dirigiste systems that were encouraged by Keynesian economics and the promise of aggregate demand management. 

  Epistemology is an area of philosophy that poses questions about the formation of knowledge. More generally, philosophy seeks a fundamental framework within which a coherent structure of consistent knowledge can be articulate; it examines the relevance of reason (rationalism) and experience  (empircism) to the formation of knowledge. These are age-old considerations. Classical rationalism holds that knowledge lies within ourselves, but required hard intellectual endeavour (mathematics and logic) to draw it forth. Empiricism regards the five senses as the only means to obtain knowledge of the world. There are midpoints between the two fundamentals: in their different ways Keynes and Hayek attempt to show the strengths and the limitations of rationality in drawing sound conclusions from sensory experiences.

Nature, nurture and understanding

Explanations (whether true or false) are manifestations of our knowledge (whether true or false) of the world, both as it is and as it is anticipated to be. Action based upon knowledge is action which can be explained. Explanations are necessarily based upon reason, which is the force of argument. Explanations are false if, given sound argument, the premises are false.

Introspection is a necessary part of explanation. It provides the means by which one individual might understand (have an explanation for) another individual's behaviour. This is illustrated by language. Words have meaning only in consequence of shared precepts. Premises that are empirically based (that is, based upon ^a posteriori^ knowledge contingent upon experience) are generally less reliable than those that are removed from a particular cultural context. Mathematicians who are from different cultures are more likely to break the 'language barrier' than are mystics. Even so, whereas classical rationalism regards ^a posteriori^ knowledge as an inferior approximation to the ^a prior^ centainty of mathematical truths, empiricism regards all understanding as a derivative of the intellectual reorganisation of knowledge that can only originate in the impressions formed from the five senses.

  Plato set the standard for classical rationalism that has endured for more than two thousand years: the still wide-accepted Platonic account of knowledge is that of beliefs that are certified by reason. Platonic forms (ideas) are abstract, independent, timeless, objective entities. Although the truth about forms lies innately within ourselves, hard intellectual endeavour is required to draw forth that truth. The presumption is that we have an ability to access truth by ^anamnesis^ (recollection). Here, our sensory perception might hinder rather than help: any attempt to verify truth by experience is a vain exercise. This is contentious. Contra classical rationalism, empiricism presents a second permanent strand in philosophy. Although concurring with classical rationalism, in regard to the relevance of recollection and introspection, empiricists regard sensory experience as the data upon which the mind must work to gain knowledge of the material world.

  A synthesis of rationalism and empiricism is presented by Immanuel Kant, for whom sensibility and understanding (experience) is conditional upon a conceptual apparatus (reason). Although reason alone gives no access to reality, Kant seeks a rational basis for the interpretation of sensory experience. He argues that experience must conform to the ^a priori^ truths of mathematics. Although knowledge arises from a conjunction of prior disposition and sensory perception, Kant imposes tight limitations upon the former: only the concepts of space, time and causality are logically prior to experience. Yet, these are crucial: there can be no sensory experience of objects that are not spatial and temporal and that do not obey causal laws.

  A modern interpretation of ^anamnesis^ is in terms of the prior knowledge that exists in the form of the genetically determned pre-sensory neurological structure of the central nervous system. (...) p.39

  Neurological adaptations are not solely determined by the 'value system'. The spontaneous development of an infant's physical coordination is implausible as an explanation of (say) Dick Fosbury's high-jump technique; and what is true of conscious movement is true of conscious thought: 'once intelligence has evolved in a species, then thereafter brains have a causal force equal to that of genes' (Plotkin 1994: 177). That consciousness builds upon communication: the ability to share in a collective knowledge allows more rapid adaptation than is offered by biological evolution: 'the guidance of a consciously planned life by some value system more than anything else sets man apart from animals' (Eccles 1984: 118). Yet, conscious planning requires he base of cultural institutions that are themselves moulded by continuous adaptation:
it may be helpful to think of culture as being a third level heuristic, another form of Darwinian machine and hence another means of gaining knowledge of the world based upon evolutionary processes, those same processes that operate for the primary and secondary heuristics but involving separate mechanisms. In this case the complete system of human knowledge would be a three-level control hierarchy, each level operating on evolutionary principles. (Plotkin 1994: 225)
Culturally transmitted knowledge (explicit and tacit) is a tertiary heuristic that removes the need for successive generations to rediscover the speed of light, the precepts of sound hygiene and the features of political fascism and parliamentary democracy.

  Instinctive (primary), intellectual (secondary) and ㅡfor homo sapiensㅡ cultural (tertiary) knowledge may all be regarded as phenotype components that contribute to an organism's adaptational fitness to survive. The modern philosophical construct of 'universal Darwinism' is the notion that processes that drive adaptations have the very widest existence: 'adaptations, and the explanation of adaptations are central to the biological enterprise, and that includes the social science' (Plotkin 1994: 55). Truth lies within ourselves, embedded therein by our evolved genotypal, neurological and cultural inheritance; and we have the capacity to uncover some of the details of that innate truthㅡ'filling in the spaces'ㅡby the use of our intellect.

  Thus are we equipped to act a role within a socio-economic order that, having been extended beyond small hunter-gatherer groupings by specialisation in production and trade, leaves more unfathomables that certainties. Within that order, socio-economic forces are manifest as rapidly changing events for which any precedent is either weak or non-existent. Under such fundamental uncertainty, Keynes and Hayek sought to establish the precepts for a sound political economy and for a scientific approach to guide economic policy.

Action under uncertainty

Human action (decision) is rational if the actor has a coherent explanation for the choice that is made over the options that are rejected. Without rationality, a choice is either instinctive or arbitrary. However, rationality need not imply conscious reason in the manner of a set of specific arguments. Actions and decisions may be based upon conventions or traditions which, though they may defy explanation, give structure to human rationality by providing a context for the exercise of reasoned choice.

  Although complex social interaction may preclude the existence of conscious reason, the widespread observance of conventions, traditions and institutional norms permits purposeful choice and action to be decided within a framework that sets limits to possible outcomes. Such observance creates social cohesion and that 'regularity in the world which makes it possible to predict events correctly' (Hayek 1949: 49). Of course, any reliance upon convention implicitly assumes 'that the existing state of affairs will continue indefinitely' (Keynes [1936]1973: 152). The certainty of the present is projected into the future, modified only to the extent to which there are reasons to believe otherwise: reasons that rest upon an understanding of causation. Only upon that basis, is it possible for rational conduct (actions, decisions, argument) to be undertaken with some confidence in situations of uncertainty.

  From a shared recognition of the pervasive uncertainty that shrouds the consequences of human actions, Keynes and Hayek point to the inadequacy of an economic approach that assumes perfect knowledge and given resources. This is the methodology of neoclassical economics, where rationality is defined in terms of correct deductions from given premises. This has little relevance for social issues; that is, to the human condition in a dynamic and uncertain historical context. The social framework for decisions is open-ended in that the full circumstances are not known and, in principle, may be unknowable. Action is taken under uncertainty.

  In the context of neoclassical economicsㅡthe textbook microeconomics of marginal analysisㅡrational decisions relate either (in a mathematical context) to logical deductions from the basis of axiomatic certainties or (in a statistical context) to risk calculations founded upon well-defined probability distributions. With both, rationality is a characteristic that pertains, not to an individual, but to the problem situation in which the individual makes decision. However, even with the clarity of those abstractions, it has become commonplace to represent rationality as a ^psychological^ attribute. In that context, the rational economic man of neoclassical economics is one who is endowed with a set of enviable abilities: to select a well-defined objective; to deduce logically the action that is necessary; and, finally, to put that action into effect. Other than in highly contrived circumstances, such as probabilistic games of chance, the opportunity for an individual to enact that kind of rationality is generally remote.

  In a social context, it is more usual for action to be decided on the basis of a subjective appraisal of incomplete and inexact information that often amounts to little more than a hunch. The social context brings environmental, psychological and social behavioural elements into consideration. In circumstances far removed from the certainties of neoclassical economics, the relevant determinants of decision-making are the cultural and physical environment, genetically based instinctive predispositions, human intelligence and the five sense perceptions. All of these contribute to the formation of knowledge that is relevant to decisions in a social context.

Hayek: the knowledge problem

In the winter of 1919-20, Hayek 'worked for a few weeks in the laboratory of the brain anatomist von Monakow, tracing fibre bundles through the different parts of the human brain' (Hayek 1994: 64). There he gained a crucial insight: 'what I had from he beginning been unable to swallow was the conception that a sensory fibre could carry or a nerve cell store, those distinctive attributes that we know mental phenomena to possess' (Hayek 1952b: 289). He realized that an alternative conceptual approach was required, but he made only limited progress: 'though I felt that I had found an answer to an important problem, I could not explain precisely what the problem was' (Hayek 1952b: v). It was not until 1948 (and for the ensuing three years) that Hayek returned to issues raised by that early experience. In rejecting the orthodox notion that seonsory fibres transmit mental phenomena to be stored in nerve cells, The Sensory Order (1952a) is an early statement of the 'connectionism' paradigm, according to which memory and thought engage (potentially) the whole brain, by the variable strength of interneural impulses.

  The proposition is that memory and thought are indistinguishable neurological processesㅡparticular configurations of an intricate neural networkㅡthat comprise an understanding of the external world. The mind is not a store of 'sense data' that reflect (or are correlated with) characteristics of elements in the physical world:
We do not first have sensations which are then preserved by memory, but it is a result of physiological memory that the physiological impulses are converted into sensations. The connections between the physiological elements are thus the primary phenomenon which creates the mental phenomena. (Hayek 1952b: 53)

 Sensory qualities are determined by (...)

(... ...)
(... ...)

(...) Although, at face value, Hayek's war-time and post-war writing might be seen to confirm his categorisation as the right-wing apostle of laissez-faire economics, further reflection would be invited by consistent remarks made over many years:
  • 'while the presumption must favor the free market, laissez-faire is not the ultimate and only conclusion' (Hayek 1933b: 134); 
  • 'probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumbs, above all the principle of laissez-faire' (Hayek 1944: 13); 
  • 'Our main problems begin when we ask what ought to be the contents of property rights, what contracts should be enforceable, and how contracts should be interpreted or, rather what standard forms of contract should be read into the informal agreements of everyday transactions'(Hayek 1949: 113);
  • 'laissez-faire was never more than rule of thumb. It indeed expressed protest against abuses of governmental power, but never provided a criterion by which one could decide what were the proper functions of government ' (Hayek 1973: 61-2).
Even so, each of these comments is consistent with the presumption that, under liberalism, the market process of modern capitalism offers the most secure basis for economic and social harmony: 'the proletariat which capitalism can be said to have "created" was ... an additional population which was enabled to grow up by new opportunities for employment which capitalism provided' (Hayek 1954b: 16).

  Hayek regards himself as a liberal 'in the European 19th-century meaning of the word'; that is, one whose fundamental concern is 'with limiting the coercive powers of all government' (Hayek 1960: 103). (... ...)

(... ...)

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