Abstract
What does macro mean in macroeconomics? This is a philosophical question that cannot be answered within the discipline of economics. The young Keynes’s work, A Treatise on Probability, was a theoretical and historical study of probability and induction that curiously ignored the creative imagination as well as his mentor, Whitehead. After exploring the monetary economy, he published a book that would establish macroeconomics: The General Theory of Employment, Interest and Money. While emphasizing the role of entrepreneurship, or animal spirits, in economic activities, the author had to admit that it is often suppressed by the market. What is the primary force that determines market trends? It seems to be a ‘general will’ of the economy and politics in society. The eighteenth-century philosopher Rousseau used this concept to ask who should be the subject in charge of the will of society. With the rise of nation-states, national sovereignty was taken for granted, and few thinkers dared to ask what the general will was. Yet the difficulty of identifying the social will is rooted in this question. Who or what moves society? This article re-reads Keynes and probes the relevance of the “Jean-Jacques Rousseau problem” in today’s world.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Similar content being viewed by others
Notes
- 1.
Keynes (1921/2013a, XXV).
- 2.
Morinaga (2021). This paper is a continuation of my article in Japanese. There are some overlaps.
- 3.
For a detailed analysis of Whitehead’s assessment of Keynes’s thesis, see Ito (1999), an excellent study of the philosophical aspects of Keynes.
- 4.
Keynes (1921/2013a, p. 3).
- 5.
Keynes (1921/2013a, p. 4).
- 6.
Keynes (1921/2013a, p. 5). “Dire qu’un fait passé, présent ou à venir est probable, c’est dire qu’une proposition est probable.”
- 7.
Keynes (1921/2013a, p. 9).
- 8.
Fisher (1956, pp. 51–52). This founder of modern statistics conjectures the reason for the convoluted line of argument in Keynes’s probability theory. Keynes uses the term probability exclusively for the truth of a proposition. The occurrence of an event matters insofar as its probability coincides with such a truth. What he sees as the basis for his theory is a kind of probability that, when increased infinitely, reaches 0 or 1: in the end, a statement without indeterminacy. Simply put, it’s not real.
- 9.
Whitehead (1929/1978, p. 18). His definition is as follows: “‘Actual entities’― also termed ‘actual occasions’―are the final real thing of which the world is made up.”
- 10.
Keynes (1921/2013a, p. 12).
- 11.
Keynes (1921/2013a, p. 11).
- 12.
Keynes (1921/2013a, p. 15).
- 13.
Keynes (1921/2013a, p. 57).
- 14.
Keynes (1921/2013a, p. 56).
- 15.
See Santayana (1923).
- 16.
Keynes (1921/2013a, p. 20).
- 17.
Although he was the last and only student to attend Whitehead’s Cambridge lectures to the end, Keynes eventually sided with Russell’s theory of the logical atom; he may have thought that Whitehead was unlikely to win in the short run. While his true reason is not known in detail, the master left Cambridge, and a group led by Russell would take over the leadership of British philosophy.
- 18.
Keynes (1936/2013b, pp. 149–150).
- 19.
Laplace (1814, p. 68).
- 20.
Corona vaccine is effective in most of the world’s population, and the side effects may be generally or macroscopically negligible. But I do not know if that is safe for me or my loved ones. In calculating probabilities, society must inevitably exclude the fate of each individual; in some cases, an individual would be crushed by his society.
- 21.
The following description is based on the seminal work of Riley (1986).
- 22.
Malebranche (1674/1979, p. 160). “In the same way, as soon as the soul wants the arm to be moved, the arm is moved, although it does not necessarily know what to do to move it. And as soon as the animal spirits are agitated, the soul is affected, although it does not necessarily know if there are animal spirits in its body.”
- 23.
For a discussion of the differences between Rousseau and his contemporaries, including his view of natural law, see the following excellent book: Derathé (1992).
- 24.
See Bataille (1945/1992, p. 125). “Où échuent la force et la tension de la volonté, la chance rit.”
- 25.
Heidegger (1961/1989, p. 46). “Das Seiende nach seinem Grundcharakter als Willen begriffen, ist keine Ansicht von einzelnen Denkern, sondern eine Notwendigkeit der Geschichite des Daseins, das sie begründen.”
- 26.
Deleuze (1962/2012, p. 161).
- 27.
‘Will’ was even a buzzword in the fascist States. On Hitler’s orders, Leni Riefenstahl made the documentary Triumph des Willens (1934), which was shot during the Nazi’s Sixth National Party Congress in the same year.
- 28.
He often uses ‘Vorstellung’ as an image or representation and ‘Wille’ as a desire or emotion. The shifting of meaning or blurring of these terms accounts for the apparent ambiguity of his logic.
- 29.
See the following voluminous study: James Franklin (2001).
- 30.
Rousseau (1762/1959, p. 361). “Chacun de nous met en commun sa personne et toute sa puissance sous la suprême direction de la volonté générale; et nous recevons en corps chaque membre comme partie indivisible du tout.”
- 31.
Cassirer (1932/1954, p. 126).
- 32.
Boyer (2014) notes that in Rousseau, the de-naturalization of humanity, or the transformation of man into a citizen, appears as a “miracle” or pure ideal (p. 279). Probably Hobbes would have said the same thing. First of all, Rousseau himself saw this civic transsubstantiation as an ideal; it was a program to be achieved through education. As history has shown, his idea has driven the modernity.
- 33.
Arendt (1958/2018, p. 105).
- 34.
Arendt (1958/2018, p. 117).
- 35.
Keynes (1930/2012, p. 3).
- 36.
Keynes (1930/2012, p. 6). “(…) it is of the essence of a debt to be enforceable in terms of something other than itself.”
- 37.
Keynes (1936/2013b, pp. 223–224).
- 38.
Keynes (1936/2013b, p. 230).
- 39.
Keynes (1936/2013b, p. 212).
- 40.
Keynes (1936/2013b, p. 12).
- 41.
No one would deny that the economy, not philosophy, drives the world today and that the financial and stock markets are at the heart of it. Yet very few studies have outlined their history. Preaching the need for a mature “equity culture”, B. M. Smith begins his remarkable book (2003) as follows: “To make money from money is a sin. Or so it was widely believed for centuries.” (p. 9). There was no rigorous academic study of the stock market until Louis Bachelier published his work The Theory of Speculation in 1900. He was the first to use mathematical techniques to explain that the stock market is efficient, saying that “the price considered most likely by the market is the true current price.” His approach to analyzing stock price fluctuations is similar to the formula used by physicists to describe the random collisions of molecules in space. Mark Smith credits him as a pioneer in probability theory: “Bachelier concluded that stock price movements were essentially unpredictable, and often could not be explained even after the fact.” (p. 98). During his lifetime, Bachelier never received the recognition he deserved. Banks began turning to more liquid rather than long-term investments. Insurance companies increased their investments in publicly traded securities. By 1913, international financial markets had reached their peak, and capital moved freely across international borders. “The globalization of the early twentieth century fostered an optimistic belief that growing interdependency among nations would reduce, and eventually eliminate, the possibility of war, leading to a permanent era of peace and prosperity.” (p. 103). And then World War I breaks out.
- 42.
See the brilliant work of McNeill (1982). In Great Britain, there was a nationwide commercial network, stimulated by British naval contracting and sustained by the Bank of England’s credit. In France, such a network had not been established, and the government, as in Great Britain, was running up against the limits of its fiscal resources. “The costs of the American war put what proved to be an unmanageable strain upon existing forms of government credit and tax income. The effort to meet the resulting financial shortfall led, as is well known, to the summoning of the Estates General in May 1789 and to the outbreak of the French Revolution.” (p. 184).
- 43.
Roger Caillois stated that modern war resembles a fête and causes a climax of excitement similar to it; the “absolute war” (guerre absolue) is violent and frightens humans as well as fascinates them. See Caillois (1963/2012). “L’État s’affirme et se justifie, s’exalte et se renforce en affrontant une autre totalité. C’est pourquoi la guerre ressemble à la fête, constitue un égal paroxyme, apparaît à son exemple comme un absolu et suscite à la fin, avec le même vertige, la même mythologie.” (p. 243).
- 44.
Keynes (1936/2013b, p. 152).
- 45.
Reading Kindleberger’s famous book Manias, Panics and Crashes (1978/2011), you may suspect that there is nothing but deceit, fraud, and injustice in the market. We expect it to be rational, but States and central banks are affected by the irrationality of human desire or unconsciousness, so they do not always act rationally. See also Kindleberger (1984/2007).
- 46.
Keynes (1936/2013b, pp. 149–150).
- 47.
Keynes (1936/2013b, p. 155).
- 48.
Keynes (1936/2013b, p. 156).
- 49.
Keynes (1936/2013b, p. 156).
- 50.
Keynes (1921/2013a, pp. 244–245).
- 51.
Keynes (1921/2013a, p. 245).
- 52.
This is directly relevant to the problem of imagination in Kant. I would like to ask: Would Kant accept that the imagination can be fancy, or rather can only be so? Can the productive imagination (produktive einbildungskraft) be creative? Can it be free of probability and animal spirits?
- 53.
Keynes (1936/2013b, p. 157).
- 54.
Keynes (1936/2013b, p. 158).
- 55.
Keynes (1936/2013b, p. 161).
- 56.
Keynes (1936/2013b, p. 163).
- 57.
Akerlof and Shiller (2009, p. 168). This book is useful in correcting a bias among economists, but it does little to answer our concern: The significance of animal spirits in Keynes’s writings.
- 58.
Akerlof and Shiller (2009, p. 173).
- 59.
Akerlof and Shiller (2009, p. 137).
- 60.
For the best summary of the relationship between these two economists, see Matsubara (2011).
- 61.
Iwai (2000/2009, pp. 185–186).
- 62.
Maruyama (2020, pp. 94–95).
- 63.
I adopt the concept of the Japanese thinker Takaaki Yoshimoto with a slight twist.
- 64.
Kindleberger and Robert (1978/2011, pp. 40–41).
References
Akerlof, A., & Shiller, R. J. (2009). Animal spirits: How human psychology drives the economy, and why it matters for global capitalism. Princeton University Press.
Arendt, H. (2018). The human condition (2nd ed.). The University of Chicago Press. (Original work published 1958)
Bataille, G. (1992). Sur Nietzsche. In Œuvres Complètes VI. Gallimard. (Original work published 1945)
Bergson, H. (1984). L’ Évolution créatrice. In Œuvres. Presses Universitaires de France. (Original work published 1907)
Boyer, A. (2014). Chose promise: Étude sur la promesse, à partir de Hobbes et de quelques autres. Presses Universitaires de France.
Caillois, R. (2012). Bellone ou la pente de la guerre. Flammarion. (Original work published 1963)
Cassirer, E. (1954). The question of Jean-Jacques Rousseau (G. Peter, Trans.). Columbia University Press. (Original work published 1932)
Deleuze, G. (2012). Nietzsche et la philosophie. Presses Universitaires de France. (Original work published 1962)
Derathé, R. (1992). Jean-Jacques Rousseau et la science politique de son temps. J.Vrin.
Fisher, R. A. (1956). Statistical methods and scientific inference. Oliver and Boyd.
Franklin, J. (2001). The science of conjecture: Evidence and probability before Pascal. The Johns Hopkins University Press.
Heidegger, M. (1989). Nietzsche I. Neske. (Original work published 1961)
Ito, K. (1999). Keynes no Tetsugaku (the philosophy of Keynes) [in Japanese]. Iwanami-Shoten.
Iwai, K. (2009). Nijuiiseiki no Shihonshugiron (Theory of capitalism in the 21st century) [in Japanese]. Chikuma-Shobo. (Original work published 2000)
Keynes J. M. (2012). A treatise on money I. In The collected writings of John Maynard Keynes V. Cambridge University Press. (Original work published 1930)
Keynes, J. M. (2013a). A treatise on probability. In The collected writings of John Maynard Keynes VIII. Cambridge University Press. (Original work published 1921)
Keynes J. M. (2013b). The general theory of employment, interest and money. In The collected writings of John Maynard Keynes VII. Cambridge University Press. (Original work published 1936)
Kindleberger, C. P. (2007). A financial history of Western Europe. Routledge. (Original work published 1984)
Kindleberger, C. P. & Robert, Z. A. (2011). Manias, panics and crashes: A history of financial crises (6th ed.). Palgrave Macmillan. (Original work published 1978)
Laplace, P. S. (1814). Essai Philosophique sur les Probabilités. Courcier.
Malebranche, N. (1979). De la recherche de la vérité. In Œuvres I. Gallimard. (Original work published 1674)
Maruyama, S. & NHK “Capitalism of Desire” Production Team. (2020). Iwai Katsuhito “Yokubō no Kaheiron” wo kataru (Iwai Katsuhito talks about “Monetary theory of desire”) [in Japanese]. Toyo Keizai INC.
Matsubara, R. (2011). Keynes to Hayek: Kahei to Sijou he no Toi (Keynes and Hayek: Questions about money and markets) [in Japanese]. Kodansha.
McNeill, W. H. (1982). The pursuit of power: Technology, armed force, and, society since A.D.1000. University of Chicago Press.
Morinaga, N. (2021). Absence of Whitehead in Keynes’s theory of probability [in Japanese]. Process Studies, 21, 125–141. https://www.jstage.jst.go.jp/article/processthought/21/0/21_125/_article/-char/ja
Riley, P. (1986). The general will before Rousseau: The transformation of the divine into the civic. Princeton University Press.
Rousseau, J.-J. (1959). Du Contrat Social. In Œuvres complètes III. Gallimard. (Original work published 1762)
Santayana, G. (1923). Scepticism and animal faith: Introduction to a system of philosophy. Charles Scribner’s Sons.
Smith, B. M. (2003). A history of the global stock market: From ancient Rome to Silicon Valley. The University of Chicago Press.
Whitehead, A. N. (1978). Process and reality. The Free Press. (Original work published 1929)
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2023 The Author(s), under exclusive license to Springer Nature Singapore Pte Ltd.
About this chapter
Cite this chapter
Morinaga, N. (2023). Between Probability and Animal Spirits: Reading Keynes. In: Urai, K., Katsuragi, M., Takeuchi, Y. (eds) Realism for Social Sciences. Translational Systems Sciences, vol 36. Springer, Singapore. https://doi.org/10.1007/978-981-99-4153-7_3
Download citation
DOI: https://doi.org/10.1007/978-981-99-4153-7_3
Published:
Publisher Name: Springer, Singapore
Print ISBN: 978-981-99-4152-0
Online ISBN: 978-981-99-4153-7
eBook Packages: Social SciencesSocial Sciences (R0)