The Case for Nordic and NATO Realism

To be a realist in international relations is to accept that some states are more sovereign than others. “Strict realism” now requires that Sweden and Finland pause before rushing into NATO’s arms, and that the Alliance take a step back before accepting them.

LONDON – Finland and Sweden have announced that they will apply for NATO membership. But joining the Alliance is more likely to weaken than enhance their security and that of Europe.

Strategic neutrality has preserved Sweden’s independence and freedom from war for 200 years, and Finland’s independence since 1948. Has anything happened to justify ending it?

Swedish and Finnish officials point to two episodes. In December 2021, the Kremlin went from desiring Swedish and Finnish neutrality to, in essence, demanding it, sending a clear and threatening message that an independent foreign policy is a privilege, not a right, for Russia’s neighbors. More important, Russia’s invasion of Ukraine has fundamentally worsened the two countries’ security environment by increasing the risk that Russia will attack or seek to intimidate them. Since they cannot hope to defeat Russia in battle, singly or jointly, they must join an organization that can.

In expert-speak, NATO membership will “raise the threshold of deterrence.” Faced with the certainty of retaliation (including nuclear, if necessary), Russia will desist from attacking, or seriously bullying, Sweden and Finland. This argument strongly implies that, had Ukraine been a NATO member, Russia would not have invaded it, since, as the Swedish foreign and defense ministries point out, “Russia (or the Soviet Union) has never attacked a NATO ally.” But Sweden and Finland’s efforts to strengthen deterrence might be self-defeating, because NATO enlargement could raise the threshold of Russia’s willingness to invade them, at least before they become Alliance members.

Judging the wisdom of further NATO enlargement requires taking a view on two matters. First, is Russia’s invasion of Ukraine (however unjustified in law and brutal in execution) evidence of a general expansionary intent, or is it sui generis? Second, what responsibilities for maintaining peace fall on small countries that abut big countries?

History offers some guidance on both questions. After 1945, Stalin could have absorbed Finland into the Soviet Union, or ruled it through a puppet. Finland had been crushed in a war in which it fought on the side of the Germans – something Finns don’t like to be reminded of, though their alliance with Hitler came about only following Stalin’s 1939 invasion.

Still, Stalin was never interested in restoring Czarist rule over Finland. His concern was strategic. As Stalin said in 1940 following the Soviet Union’s “Winter War” with Finland, “we can’t move Leningrad, [so] we must move the borders.” What he demanded, and eventually got, was some 10% of Finnish territory, including a big slice of Karelia near Leningrad (now St. Petersburg), plus some strategic islands.

After this land grab, Stalin guaranteed Finnish independence in the 1948 Agreement of Friendship, Cooperation, and Mutual Assistance, on condition that Finland promised to “fight to repel” any attack on the Soviet Union “through Finnish territory,” with help from the Kremlin if Finland agreed. Unlike the Soviet Union’s Eastern European satellite states, Finland was not required to join the Warsaw Pact when it was established in 1955.

There is a superficial parallel between Ukraine’s current tragedy and Finland circa 1939-48. Stalin made Finnish neutrality a condition of its independence, while Russian President Vladimir Putin claims that his main demand is that Ukraine renounce the goal of NATO membership.

But the differences between the two cases are greater. Although part of the Czarist empire, Finland was never part of “historic” Russia as Ukraine was, and contained no large Russian minorities. Putin regards Ukraine as an “inalienable” part of Russia, and blames Lenin’s establishment of a Ukrainian Soviet Socialist Republic for creating Ukrainian nationalism. So, while strategic considerations may have been uppermost in Stalin’s mind, it is reasonable to suppose – as Ukrainians and Ukraine’s Western supporters do – that Putin is using the threat of NATO expansion as an excuse to undo what he sees as Lenin’s historic mistake.

If Russia’s fear of NATO is genuine, Sweden and Finland’s membership applications will expose them to the risk of retaliation before they join, and it is at least debatable as to whether a NATO Article 5 guarantee will offer greater real security than neutrality does. If the Russia-Ukraine war is specific to Russian history, with NATO expansion only an excuse, it cannot be seen as a prelude to unlimited territorial expansion, though Putin’s remarks belittling Kazakhstan’s statehood are worryingly similar to his denials of Ukraine’s right to exist. Either way, the case for Swedish and Finnish NATO membership is not open and shut.

This brings us to the second matter, small countries’ responsibilities for peace. The former European Union diplomat Robert Cooper argues in his book The Ambassadors that “strict realism [is] required by small states with big neighbors.” And it is realism that seems to be lacking in the Swedish and Finnish governments’ current policy thinking. Consider the Swedish foreign and defense ministries’ assertion that “The Russian leadership operates based on … a view of history that differ[s] from th[at] of the West,” including “the aim of creating spheres of influence.”1

Attributing that Russian conception simply to totalitarian thinking amounts to a denial of any special obligation of a state to its people arising from its location in the international system – the reverse of Cooper’s “strict realism.” The doctrine of spheres of influence may be alien to today’s international norms, but not to international practice. No powerful state wants a potential enemy on its doorstep. This was (and remains) the basis of the US Monroe Doctrine vis-à-vis the Western Hemisphere. It is supposedly the basis of Russia’s strategic doctrine, though in practice Russia has preferred to have vassal states on its borders.

To be a realist in international relations is to accept that some states are more sovereign than others. The Finns acknowledged this after World War II. “Strict realism” now requires that Sweden and Finland pause before rushing into NATO’s arms, and that the Alliance take a step back before accepting them. Ukraine, whose brave resistance has set the limits on Russia’s territorial expansion, also must now be willing to negotiate some form of peaceful coexistence with its more powerful neighbor.

The False Promise of Democratic Peace

Clinging to the assumption that only dictatorships start military conflicts, proponents of democratization believed that the global success of their project would usher in a world without war. But this theory lacks a sound foundation and has produced one disaster after another when put into practice.

LONDON – Through persuasion, exhortation, legal processes, economic pressure, and sometimes military force, American foreign policy asserts the United States’ view about how the world should be run. Only two countries in recent history have had such world-transforming ambitions: Britain and the US. In the last 150 years, these are the only two countries whose power – hard and soft, formal and informal – has extended to all parts of the world, allowing them plausibly to aspire to the mantle of Rome.

When the US inherited Britain’s global position after 1945, it also inherited Britain’s sense of responsibility for the future of the international order. Embracing that role, America has been an evangelist of democracy, and a central US foreign-policy objective since the fall of communism has been to promote its spread – sometimes by regime change, when that is deemed necessary.

In fact, this playbook dates back to US President Woodrow Wilson’s time. As historian Nicholas Mulder writes in The Economic Weapon: The Rise of Sanctions as a Tool of Modern War, “Wilson was the first statesman to cast the economic weapon as an instrument of democratization. He thereby added an internal political rationale for economic sanctions – spreading democracy – to the external political goal that…European advocates of sanctions have aimed at: inter-state peace.” The implication is that, where the opportunity offers, military and non-military measures should be used to topple “malign” regimes.

According to democratic peace theory, democracies do not start wars; only dictatorships do. A wholly democratic world thus would be a world without war. This was the hope that emerged in the 1990s. With the end of communism, the expectation, famously expressed by Francis Fukuyama’s 1989 article, “The End of History?,” was that the most important parts of the world would become democratic.2

US supremacy was supposed to ensure that democracy became the universal political norm. But Russia and China, the leading communist states of the Cold War era, have not embraced it; nor have many other centers of world affairs, especially in the Middle East. Hence, Fukuyama has recently acknowledged that if Russia and China were driven together, “then you would really be living in a world that was being dominated by these non-democratic powers…[which] really is the end of the end of history.”

The argument that democracy is inherently “peaceful,” and dictatorship or autocracy “warlike,” is intuitively attractive. It does not deny that states pursue their own interests; but it assumes that the interests of democratic states will reflect common values like human rights, and that those interests will be pursued in a less bellicose manner (since democratic processes require negotiation of differences). Democratic governments are accountable to their people, and the people have an interest in peace, not war.

By contrast, according to this view, rulers and elites in dictatorships are illegitimate and therefore insecure, which leads them to seek popular support by whipping up animosity toward foreigners. If democracy replaced dictatorship everywhere, world peace would follow automatically.

This belief rests on two propositions that have been extremely influential in international relations theory, even though they are poorly grounded theoretically and empirically. The first is the notion that a state’s external behavior is determined by its domestic constitution – a view that ignores the influence the international system can have on a country’s domestic politics. As the American political scientist Kenneth N. Waltz argued in his 1979 book, The Theory of International Politics, “international anarchy” conditions the behavior of states more than the behavior of states creates international anarchy.

Waltz’s “world-systems theory” perspective is particularly useful in an age of globalization. One must look to the structure of the international system to “predict” how individual states will behave, regardless of their domestic constitutions. “If each state, being stable, strove only for security, and had no designs on its neighbors, all states would nevertheless remain insecure,” he observed, “for the means of security for one state are, in their very existence, the means by which other states are threatened.”

Waltz offered a bracing antidote to the facile assumption that democratic habits are easily transferable from one location to another. Rather than trying to spread democracy, he suggested that it would be better to try to reduce global insecurity.

Though there is undeniably some correlation between democratic institutions and peaceful habits, the direction of causation is disputable. Was it democracy that made Europe peaceful after 1945? Or did the US nuclear umbrella, the fixing of borders by the victors, and Marshall Plan-fueled economic growth finally make it possible for non-communist Europe to accept democracy as its political norm? The political scientist Mark E. Pietrzyk contends that, “Only states which are relatively secure – politically, militarily, economically – can afford to have free, pluralistic societies; in the absence of this security, states are much more likely to adopt, maintain, or revert to centralized, coercive authority structures.”

The second proposition is that democracy is the natural form of the state, which people everywhere will spontaneously adopt if allowed to. This dubious assumption makes regime change seem easy, because the sanctioning powers can rely on the welcoming support of those whose freedom has been repressed and whose rights have been trampled underfoot.

By drawing superficial comparisons with postwar Germany and Japan, the apostles of democratization grossly underestimate the difficulties of installing democracies in societies that lack Western constitutional traditions. The results of their handiwork can be seen in Iraq, Afghanistan, Libya, Syria, and many African countries.

Democratic peace theory is, above all, lazy. It provides an easy explanation for “warlike” behavior without considering the location and history of the states involved. This shallowness lends itself to overconfidence that a quick dose of economic sanctions or bombing is all that is needed to cure a dictatorship of its unfortunate affliction.

In short, the idea that democracy is “portable” leads to a gross underestimation of the military, economic, and humanitarian costs of trying to spread democracy to troubled parts of the world. The West has paid a terrible price for such thinking – and it may be about to pay again.

Times letters: The tough act of following Cressida Dick


Sir, In discussing the possible “Finlandisation” of Ukraine, your leading article (“Kyiv’s Cause”, Feb 11) correctly states that it would unacceptable for great powers to enforce such a policy on Ukraine. In his brilliant book The Ambassadors, Sir Robert Cooper explains that Finland’s neutrality was not “enforced” by great powers but was decided by Finland itself, against the wishes of the Soviet Union, which wanted a military alliance. It was the ability of the two Finnish negotiators, Paasikivi and Mannerheim, plus the respect Finland had earned from Stalin by its brave resistance to the Soviet invasion of 1939, which secured more than “nominal” independence in 1948.

The moral of the tale is that it is up to Ukraine to determine the conditions of its coexistence with Russia. They are the two leading actors in this drama; all the rest are bit players.
Lord Skidelsky

House of Lords

Exchange of the week: Did the West create the monster?

To the Financial Times

Martin Wolf is right to say that Vladimir Putin has ignited an indefensible war against Ukraine. That it is worse than a crime is highlighted by your report on Kharkiv, described as “another Stalingrad”. You do not call Ukrainians your brothers then bomb them into submission. Whatever the war’s immediate results, Putin has ensured that Russia’s western borders become “ungovernable”. This is a dreadful legacy.

However, let’s not lose all sense of history. Russia’s desire to retain both Belarus and Ukraine as buffers between Russia and Nato is understandable: one has only to look at the map to understand why. I have never understood why the West – or Ukraine itself – has refused to give Russia the assurance that there would be no forward deployment of Nato forces on its borders. Had such promises been given, the dynamics of post- communist Russian politics would have been very different. As Yegor Gaidar, Russia’s first post communist PM, once said to me: “The best hope for Russian liberals is the distance of Nato from our borders.” Wolf’s piece ignores the argument that Putin’ “the monster” is partly a creation of Western diplomacy.

Robert Skidelsky, House of Lords, London

To the Financial Times

In “Just look at the map to see Moscow’s point of view” Robert Skidelsky asserts that had the West given assurances to Russia that there would be no forward deployment of Nato forces, then Putin would not have needed Ukraine and Belarus to be buffers between Russia and Nato’s “military alliance”. But Nato has never been a “war” alliance; it has always been a ” defence ” alliance, with its member nations acting “collectively” to defend against attacks on any one of its members. Therefore it is disingenuous of Skidelsky to accuse Martin Wolf of ignoring all sense of Russian history. 

Ali M. El-Agraa, emeritus professor of international economic integration, Fukuoka University, Japan

Think Twice Before Sanctioning Russia Further

Despite massive Western economic sanctions against Russia, the chance that they will lead to President Vladimir Putin’s ouster, or even to a drastic change in Russian policy toward Ukraine, is much lower than most people suppose. It is far more likely that punishing will neither stop the war nor secure the peace.

LONDON – The West has imposed massive financial and economic sanctions on Russia in response to its invasion of Ukraine. But are the sanctions supposed to be a way to end the war? Are they a means of punishing Russia for its bad behavior? Or are they simply an expression of moral outrage?

This is the second time in less than a decade that Russia has been sanctioned for violating international law. Following Russia’s 2014 annexation of Crimea and incursion into eastern Ukraine, the United States imposed economic sanctions aimed at “effectively making it a pariah state.” Clearly, this did not have the desired effect of changing the Kremlin’s behavior. Now a new barrage of measures in response to the assault on Ukraine has ramped up sanctions to an unprecedented extent. 1

The current restrictions on Russia include a ban on trade in critical technologies, extensive asset freezes and travel bans, the denial of major Russian banks’ access to international capital markets, travel bans and asset freezes targeting individuals, and the exclusion of Russian aircraft from international airspace. With the sequestration of the Russian central bank’s foreign-exchange reserves and the promised eviction of Russia from the world financial and trading system, oil and gas will remain the country’s lifeline to the global economy.

All of this might seem a necessary moral response to Russia’s lawlessness. But when relatively light-touch sanctions give way to heavy economic bombardment, two key questions should be asked. First, at what point do sanctions become a pathway to war rather than an alternative to it? Second, what are such measures expected to achieve, and how effective are they likely to be? So far, these questions have scarcely been asked, much less answered. 

Governments should consider the first question carefully before imposing sanctions on a great power, particularly one with nuclear weapons. If that power perceives a threat to its means of survival, there is a strong chance that it will fight to overcome the restrictions. 

For example, when the US imposed an embargo on oil and gas exports to Japan in August 1941, following Japan’s seizure of oilfields in Indochina, the Japanese responded by attacking Pearl Harbor. And after OPEC subjected the US to an oil embargo in 1973 in retaliation for American military assistance to Israel during the Yom Kippur War, President Richard Nixon’s administration threatened to invade and occupy OPEC member states’ oil fields. The embargo ended.

The sanctions imposed so far on Russia do not yet threaten the survival of the Russian state. But President Vladimir Putin may regard a Western attempt to cut off the remainder of Russia’s international trade, especially in energy, as an existential threat. 

As for the second question, the objective of economic sanctions is reasonably clear: to prevent or stop war by imposing unacceptable costs on the aggressor state. But while there is no doubt that the Western sanctions on Russia have greatly raised the costs to ordinary Russians of Putin’s war, no one expects that this will end the conflict. 

The West instead hopes that the costs of the sanctions to Russia’s elite will achieve this result. Rather than lose their wealth, the argument goes, the elites may overthrow Putin or force him to end the war. This is the only rationale for the current sanctions that makes sense. 

But the likelihood of Putin’s ouster, or even of a drastic change in Russian policy, is much lower than most people suppose. Essentially, it depends on Russia’s defeat in Ukraine, a prolongation of the conflict without any resolution, or a growing perception among Russia’s military that Putin has failed them. Far more likely is a ceasefire and at least the appearance of a Russian victory. In that case, economic sanctions will have done nothing either to stop the war or secure the peace.

A 2007 UK House of Lords report concluded that, “economic sanctions used in isolation from other policy instruments are extremely unlikely to force a target to make major policy changes.” Even sanctions’ rare success in forcing South Africa to abandon apartheid depended on two special circumstances, neither of which applies to Russia today: worldwide enforcement and South Africa’s inability to retaliate. Turkey, India, and China are the most notable of the states that have not sanctioned Russia, and potential Russian counter-sanctions include cutting off the oil and gas supplies on which most of Europe depends. 

But that is not all. Among the “other policy instruments” mentioned in the House of Lords report, the foremost is the “threatened or actual use of force.” In other words, the inefficacy of economic sanctions on their own to change state behavior implies a high risk that they become part of an escalator to war. That is why Western countries have so far not acceded to Ukraine’s request to impose a no-fly zone. 

Economic sanctions against Russia are supposed to be an alternative to war, but they can reasonably be expected to change the Kremlin’s behavior only by becoming tactical components of the conflict. The sad truth is that Western countries cannot help Ukraine except by threatening to go to war with Russia. But to admit this is to call into question the whole logic of their sanctions policy. 

More generally, economic sanctions have become a greatly overused tool of preventive diplomacy. By cutting off parts of the world from international commerce, they promote the formation of antagonistic blocs, and destroywhatever promise globalization still holds. 

Samuel Johnson famously observed that, “There are few ways in which a man can be more innocently employed than in getting money.” His French contemporary, Montesquieu, spoke of the douceur of commerce. True, a lot of trade is criminal, and much of it benefits corrupt and oppressive governments. But forcing countries back to pre-modern economic conditions is not a formula for improvement.

Letter: Just look at the map to see Moscow’s point of view

Martin Wolf is right to say that Vladimir Putin has ignited an indefensible war against Ukraine (Opinion, March 2). That it is worse than a crime is a folly highlighted by your report about Kharkiv, described as “another Stalingrad” (March 3). You do not call Ukrainians your brothers, then bomb them into submission. Whatever the war’s immediate results, Putin has ensured that Russia’s western borders become “ungovernable”. Belarus will be next on the list for “brotherly” persuasion, once Alexander Lukashenko has gone. This is a dreadful legacy.

However, in our condemnation of Russia’s current actions, let’s not lose all sense of history. Russia’s desire to retain both Belarus and Ukraine as buffers between Russia and Nato’s military alliance is understandable and reasonable: one has only to look at the map to understand why. I have never been able to understand why the west — or Ukraine itself — has refused to give Russia the assurance that there would be no forward deployment of Nato forces on its borders. Had such promises been given at any time since the fall of communism, the dynamics of post-communist Russian politics would have been very different. As Yegor Gaidar, Russia’s first post-communist prime minister, once said to me: “The best hope for Russian liberals is the distance of Nato from our borders.” Wolf’s piece completely ignores the argument that Putin “the monster” is partly a creation of appalling western diplomacy.

Wolf also shows an unjustified faith in economic sanctions to secure regime change. What he does show is that the kind of sanctions being imposed on Russia today will be highly damaging to the world economy, not that it will change Russia’s behaviour.

I agree with Mikhail Fridman, one of the sanctioned Russian billionaires, who said this week sanctions “will not have any impact for political decisions in Russia” (Report, March 2) because he, Fridman, has no influence over Putin.

Letters in response to this letter:

Worth heeding Keynes and the German parallels / From William Dixon, London SE18, UK

Why Nato assurances on troops is missing the point / From Ali M El-Agraa, Emeritus Professor of International Economic Integration, Fukuoka University, Japan

A Kyiv refugee’s plea for solidarity in face of attack / From Alex Levak, Refugee from Kyiv, Ukraine

Letter: Just look at the map to see Moscow’s point of view

Martin Wolf is right to say that Vladimir Putin has ignited an indefensible war against Ukraine (Opinion, March 2). That it is worse than a crime is a folly highlighted by your report about Kharkiv, described as “another Stalingrad” (March 3). You do not call Ukrainians your brothers, then bomb them into submission. Whatever the war’s immediate results, Putin has ensured that Russia’s western borders become “ungovernable”. Belarus will be next on the list for “brotherly” persuasion, once Alexander Lukashenko has gone. This is a dreadful legacy.

However, in our condemnation of Russia’s current actions, let’s not lose all sense of history. Russia’s desire to retain both Belarus and Ukraine as buffers between Russia and Nato’s military alliance is understandable and reasonable: one has only to look at the map to understand why. I have never been able to understand why the west — or Ukraine itself — has refused to give Russia the assurance that there would be no forward deployment of Nato forces on its borders. Had such promises been given at any time since the fall of communism, the dynamics of post-communist Russian politics would have been very different. As Yegor Gaidar, Russia’s first post-communist prime minister, once said to me: “The best hope for Russian liberals is the distance of Nato from our borders.” Wolf’s piece completely ignores the argument that Putin “the monster” is partly a creation of appalling western diplomacy.

Wolf also shows an unjustified faith in economic sanctions to secure regime change. What he does show is that the kind of sanctions being imposed on Russia today will be highly damaging to the world economy, not that it will change Russia’s behaviour.

I agree with Mikhail Fridman, one of the sanctioned Russian billionaires, who said this week sanctions “will not have any impact for political decisions in Russia” (Report, March 2) because he, Fridman, has no influence over Putin.

Robert Skidelsky House of Lords, London SW1, UK

Economic Recovery in the Age of COVID-19

The COVID-19 pandemic is an invitation to what the economist Joseph Schumpeter called creative destruction: a chance to liquidate obsolete investments and to create something new, better, and, in the jargon, more ‘resilient’ and ‘sustainable’. Schumpeter understood that humankind does not progress in a balanced way, rather it lurches from one extreme to another, each extreme producing its own reaction.

In political economy, the subject of this contribution, the excesses of the Keynesian social democracy in the 1970s brought about the extreme reaction of neo-liberalism. The hubris of neo-liberalism – its failure to guard against the ever present possibility of collapse, its inattention to social justice, its reckless embrace of globalisation, its Faustian pact with consumerism – has in turn bred a reaction, but to what is as yet unclear. Populist forces of Right and Left, made up of fragments of old and new discontents, compete for the succession. The balance remains elusive.

We have both a short-term and long-term crisis on our hands. In the short term we run the risk of what some analysts are calling the Third Great World Depression. In the long run the risk is of the exhaustion of Nature’s tolerance for our profligate habits. The prize is to enfold our pandemic recovery measures into a long-term strategy for a sustainable way of life – I will not say growth, for growth as we understand it may not be sustainable.

The short-term threat to jobs and livelihoods is clear enough. Much of Europe is on a life-support system. The world economy will have shrunk by about 5% in 2020, and hopes of a V-shaped recovery have been put on hold. This means that unemployment is set to go on rising through 2021. In the UK, we expect an unemployment rate of close to 10%. Everyone is waiting for the end of the coronavirus pandemic so that we can get back to ‘normal’. But the virus is no longer the main problem: it is the scarring of the economy produced by a prolonged and continuous period of non-work which will damage the recovery.

And what about the further future? Suppose by a heroic effort we succeed in reopening economies much as they were before. Can anyone say they were in a healthy or sustainable situation before the pandemic struck? Debt-driven growth models which produced consumption and asset booms followed by financial busts: that was the pre-pandemic normal.

I am often asked, what would British economist John Maynard Keynes have said? I will try to give my answer, though I hasten to add that Keynes, from beyond the grave, has not authorised me to do so. Nor is Keynes the last word on the matters I will deal with.

Then and now

My book Keynes: The Return of the Master (Skidelsky, 2009) was published in the autumn of 2009. It was published the year after the global banking collapse of 2008 and the massive rescue operations undertaken by governments all round the world – not just the bailout of a bankrupt banking system, but also large monetary and fiscal stimulus. This activism was in contrast to the ‘do nothing’ stance of governments following the Wall Street crash of 1929. I believe that it prevented another Great Depression: the fall in output following the 2008 collapse was limited to four quarters, whereas output went on falling for thirteen quarters after the collapse of 1929.

Long before recovery was secure, however, our own stimulus was terminated. Alarmed by the deficits they had incurred, governments started to slash public spending. The ‘return of the master’ proved brief. “I guess everyone is a Keynesian in a foxhole” said Robert Lucas, high priest of Chicago economics. Keynes was for emergencies only.

And we have the same reaction today. Compelled to close down a large fraction of their economies to stop the spread of the coronavirus contagion, governments have spent money freely to keep up the incomes of millions of people prevented from working. But they continue to hope that as the economy reopens, a V-shaped recovery will relieve them of their fiscal burden. The talk is of ‘fiscal sustainability’, the need for consolidation and debt reduction even as the economy is set to shrink.

Many would see this as a reasonable position. Most economists view the market system as fundamentally healthy. It will get sick from time to time and therefore need medication, but it is basically self-healing, like the human body. So treatment should be limited in scope and duration. This is particularly the case given the unreliability of political medicine. Keynes rejected this analogy between the market system and the self-healing body and believed rather that a market system left unattended by the state could never be healthy.

Keynes for beginners

Keynes’s revolutionary insight was that capitalist market economies do not have an automatic tendency towards full employment. This assertion shocked the economists of Keynes’s day, whose models taught them that persisting unemployment was impossible if wages were flexible. Keynes’s Cambridge colleague Arthur Pigou expressed the typical belief of 1933: “With perfectly free competition…there will always be a strong tendency for wage-rates to be so related to demand that everyone is employed” (Pigou, 1933). Based on this argument, unemployed workers must be choosing not to work. Seeing the millions unemployed all around him during the Great Depression, Keynes thought: There is something wrong with your model! These people are not choosing not to work. They cannot find work at any wage.

Keynesian economics starts with this blinding shaft of common sense. People are unemployed when there is no demand for their services. Yet this insight never fully converted the economics profession, who went on cooking up all kinds of fancy reasons to demonstrate that what looked like unwanted unemployment was really a ‘choice for leisure’. Today I would wager that most economists believe, deep down, that most unemployed people could find work if they really wanted to, or if state benefits did not provide them with an alternative income.

But why do economies not quickly bounce back from collapses? Surely, if an employer does not want to employ me at £500 a week, I can always lower my wage requirement till it becomes profitable for him to employ me. By insisting on unrealistic wages, workers are ‘pricing themselves out of employment’. But Keynes gave two reasons why even flexible wages will not maintain or restore full employment.

Wages and demand

Keynes’s first argument was that every producer is also a consumer: my wages are your income, because my wages buy your goods. If my wages go down, your income goes down, too. The general principle is that cuts in production costs (whether by cutting wages or by laying off workers) deepen a slump by simultaneously cutting total demand or spending power. A fall of income in one part of the economy reduces production in another part, and so on, in a downward spiral as unemployment spreads rapidly throughout the economy. Eventually spending power is stabilised at a much lower level as people stop saving. But nothing has happened to stimulate consumption, and therefore to promote a recovery. The weird idea that the way to revive an economy is by getting everyone to stop spending comes only to a well-trained neo-classical economist.

Confidence and money

Keynes’s second argument against the V-shaped recovery model had to do with the behaviour of money. It is characteristic of a slump that instead of investing their money, businesses ‘hoard’ it, or ‘add to their cash reserves’. The greater this ‘liquidity preference’ is, the higher the rate of interest that owners of money will charge to lend it out. But to stimulate production, borrowers need lower rates, not higher rates. So when confidence is low, the higher rates demanded by the banks for loans mean even less investment, less consumption and less employment.

In this way, flexibility of wages and stickiness of interest rates combine to deepen the slump. Contrary to Robert Lucas, without government ‘stimulus’ the economy will remain stuck in the foxhole.

But the mainstream economist has a comeback: depressions or deep recessions are very rare events, like Nassim Taleb’s ‘black swans’ (2008). So it is absurd to organise economic life as if the next slump is just around the corner. Market economies have built-in stability so powerful that slumps will be very rare. This is exactly what Keynes denied: black swans can fly out of a clear blue sky at any time. We have just seen a large flock of them in 2020.

The reason, Keynes said, was that the theory of the ‘self-equilibrating’ market economy depends on the idea that everyone, and particularly investors, can accurately predict the future. If they can accurately calculate what assets they buy today will be worth in ten years time, they would never buy things at the wrong prices. As Keynes (1937) wrote: “The calculus of probability…was supposed to be capable of reducing uncertainty to the same calculable status as certainty itself”. But this was a myth. “Actually…we have as a rule, only the vaguest idea of any but the most direct consequences of our acts” (Keynes, 1936). This was the second huge shaft of commonsense to pierce the mathematical precision of forecasting models.

And a huge consequence followed. Because the future is uncertain, private investment – which depends on the expectation of future yield – will be unsteady. Prosperity will depend on peoples’ ‘animal spirits’. When they are feeling confident, they hire more workers; when they are pessimistic, they hire fewer.

Stabilisation policy

Two conclusions follow from this account of market behaviour: 1) Collapses are always possible because the future is uncertain; and 2) When they happen, there are no ‘automatic’ market mechanisms to ensure a quick bounce back.

That is why governments are indispensable ‘balancers’ of market economies. They add and subtract spending power as and when needed.

This explains why there is no virtue in trying to balance the budget as such. Being Keynesian means having a theory of the economy that justifies the use of the state budget to balance economic activity at an optimal level of output and employment. This can mean either a budget surplus or a budget deficit or a balanced budget, depending on what is happening in the economy. It is the accounts of the economy that it needs to balance. Without this balancing act the economy will have a spontaneous tendency not to full employment but to underemployment.

To maintain economic life on a balanced, even keel, governments need to do two things.

First, they need to steady the rate of investment. They can do this through public investment programmes. Keynes (1936) wrote: “I expect to see the state, which is in a position to [take] long views…taking an ever greater responsibility for directly organising investment”. This happened in the 25 years after World War II, but since the 1980s, the state’s share in total investment has fallen drastically, increasing economic instability. Notice that a large state investment share is not just a policy for the foxhole but a permanent part of economic management.

Secondly, governments should pursue counter-cyclical policy to limit the effect of remaining fluctuations. This means injecting extra spending into the economy when private spending falls and curtailing it when it rises. It can be done on the tax side, or spending side, or both. The ‘multiplier’, based on what is called ‘the marginal propensity to consume’, tells governments what the multiplied effect of any spending they add to or subtract from the economy will be.

The answer to the failures of both old-fashioned Keynesianism and newfangled monetarism is not to abandon the balancing role of the state, but to make it as automatic as possible. The state should commit to two things: a rolling programme of public investment and a public sector job guarantee.

The first would reduce fluctuations in investment to much narrower limits; the second would provide a buffer stock of jobs, which would automatically expand in a downturn and deplete in an upturn.

Public investment does not require public ownership. Much of it could be done by quasi-state institutions like public investment banks or funds or state-holding companies. These would operate under a broad central government mandate or ‘mission’ to use Mariana Mazzucato’s word, that reflects national purpose, but which insulates commercial decisions from political meddling.

The ‘counter-cyclical’ public sector job programme would be centrally financed, but with projects chosen and administered locally. The result of both policies pursued together would be to abolish unwanted unemployment for the first time since the Industrial Revolution.

These two balancing functions, public investment and counter-cyclical policy, are needed to ensure the full employment and stability of capitalist market economies. And the fuller the use of a country’s human resources, the more prosperous the country will be, the greater the social contentment and the less the danger of political extremism. This – in a nutshell – is the message of Keynes for our day.

Three objections

Now let us consider three neoclassical objections to Keynesian theory and policy.

First, as we have seen, economists believe the market economy to be much more naturally stable than Keynes supposed. Hence they view Keynesian demand management as inherently destabilising. History does not support them. The most stable period in modern times, with the fullest employment and fastest growth rate, has been the period from 1950 to1975, when Keynesian theory and policy was in control.

Second, anti-Keynesian economists teach that public investment ‘crowds out’ private investment. This is true if a government adds to public spending when all the economy’s resources are already fully employed. It is a cousin of the idea that public borrowing merely adds to the burdens of future generations. But whenever there is spare capacity, public investment can ‘crowd in’ private investment by increasing total demand for goods and services. Most governments drastically cut public investment after the 1970s. Growth was halved and unemployment rose. Some public investment is bound to be ‘wasted’, but this has to be compared with the waste of unemployment.

Third, monetarist economists – descendants of Milton Friedman – claim that Keynesian counter-cyclical policy is inherently inflationary. Vote-catching will lead Keynesian politicians to print too much money, resulting in creeping and eventually accelerating inflation.

Behind the monetarist argument is the belief that there is only one shock against which policy has to guard: government, which is governments ‘monkeying around’ with money. Instability in the price level can delude people into trading at false prices, disturbing the natural equilibrium of market transactions. If the key to economic stability is a low and constant rate of inflation, then control of the money supply (or equivalently) of interest rates needs to be taken out of the hands of politicians and vested in independent central banks.

History gives only qualified support to the monetarist thesis. Inflation was subdued throughout the 25 years of the Keynesian era and only started to rise at the end of the 1960s, for reasons much more connected with the Vietnam War than with Keynesian economics. As for the inherent stability of an economy with stable money: a decade of low inflation did not prevent the financial collapse of 2008-09.

Nor did quantitative easing – flooding the economy with central bank ‘base money’ or M0 in 2009-12 – bring about a robust recovery after the collapse. The aim of quantitative easing was to lower the cost of borrowing by forcing up the price of bonds. Its fallacy lay in the belief that the ‘money supply’ (which includes ‘broad money’ or bank credit) is directly under the control of the central bank. How much bank credit an expansion of base money brings about depends on Keynes’s ‘animal spirits’. A very high rate of interest can sometimes kill off a boom; but even a negative rate of interest might not produce recovery if expectations of profit from increased investment are zero.

Neoclassical economists are not the only critics of Keynesianism. Marxists would claim that such an updated Keynesian programme is just pie in the sky. A capitalist economy needs a ‘reserve army of the unemployed’ to keep up profits by keeping down wages. Only a fully socialised economy, they say, can abolish unemployment and maintain wage growth. The answer is that between 1950 and 1975, Keynesian-managed capitalist economies averaged unemployment rates of 2% to 3%, half of what they have been since; they had doubled the growth rates we have since had, with rising rather than stagnating wages; and at a cost in inflation only slightly higher than we have experienced under monetarist management.

No system of political economy is perfect. But it should be judged not by comparison with some ideal system, but with the realistic alternatives. Keynes set out to save democracy from the two challengers of his day – fascism and communism. He said that if we continued with laissez-faire in the face of massive unemployment, political freedom would not survive. “But it may be possible by a right analysis of the problem to cure the disease whilst preserving efficiency and freedom” (Keynes, 1936).

I would echo him today. I doubt if western populations will for much longer tolerate a political economy that delivers persisting underemployment, frequent crashes, stagnant wages, and extreme inequalities of wealth and income.

In thinking about our post-COVID-19 world, Keynes is an excellent start, but he did not solve all economic problems. Although he assumed that the desire to consume more would eventually be satiated by abundance, he had no inkling of long-run ecological constraints on growth. Keynes understood that inequality was both an economic and ethical problem, but his theoretical work was directed to overcoming unemployment, the big problem of the day, and he did not link it to the unequal distribution of wealth, which we are much more likely to do today.

European context

Let me conclude by putting what I have just said into a European context. This is a serious question, because while the rules of the European Union prevent member states from pursuing Keynesian policies at the national level, there is no provision for European-wide Keynesianism.

The fundamental design flaw of the eurozone has often been pointed out; it created a monetary union without three crucial tools which are needed to stabilise economies: a budget big enough to act as a balancer, a fiscal transfer capacity to deal with asymmetric shocks and a lender of last resort for the banking system. These were not accidental omissions. The European Economic and Monetary Union was built on the belief that they were unnecessary. The creators of the Union accepted the Friedman monetary doctrine that rule-governed market economies are naturally stable, which was consistent with the long-standing anti-inflationary views of the German Bundesbank. But it was worse than that: the eurozone treaty forbade the use of stabilising tools at the national level. What this meant is that the Union as a whole was badly equipped to deal with the kinds of shocks to which market capitalism is prone.

The conventional, or German, view of the financial crisis of 2008-09 was that it resulted from excessive public debts and fiscal profligacy of the Mediterranean countries. Had these countries balanced their budgets as the rules prescribed, the financial shock could have been avoided. The alternative, and I think correct, view, is that the Union provided no non-deflationary mechanism for adjusting current account imbalances between its members. Keynes’s remark of 1941 applies very accurately to the EU: “The process of adjustment is compulsory for the debtor, and voluntary for the creditor: the debtor must borrow; the creditor is under no such compulsion.” His Clearing Union set out to remedy this design flaw in the global system by providing for creditor adjustment, but no such mechanism was established in Europe. As result, Germany in particular was left free to pile up current account surpluses without limit. The system was maintained by an unstable system of creditor loans which dried up the moment debtors got into trouble.

With the fiscal policy of all member states constrained by balanced buget rules and public debt ceilings, monetary policy – the weaker stabilisation instrument – was the only macro policy available. Mario Draghi, European Central Bank (ECB) president, found a way of bending the rules of the ECB sufficiently to rescue the EU from collapse in 2015. But he recognised the limitations of a purely monetary stimulus. In an interview with Financial Times, Draghi (2019) said:

I [have] talked about fiscal policy as a necessary complement to monetary policy since 2014. Now the need is more urgent than before. Monetary policy will continue to do its job but the negative side effects as you more forward are more and more visible. Monetary pumping worked, but more feebly that fiscal pumping would have.

Draghi proposed a budget for the eurozone large enough to be a stabilising tool: this has not been acted on.

The COVID-19 crisis has brought one promising institutional innovation. In July of this year, the European Commission proposed a €750 billion European Recovery Fund, dubbed Next Generatioan EU. This would authorise the Commission to borrow in the capital markets on the EU’s behalf and disburse the loans raised as grants and loans, split half-and-half to its members.

However, it has two obvious limitations. The European Council called the fund ‘an exceptional response to temporary but extreme circumstances’. In other words, it is not intended to become a permanent part of the EU’s institutional structure, so it is limited in size, scope and duration.

And secondly, it still has to be agreed by all 27 member states. As a result of continuous wrangling, no budgetary allocations have yet been made. What seemed like an imaginative leap forward looks like a quagmire. As one analyst has remarked “a sword of Damocles therefore hangs over the whole plan”.

Many member states are still betting on that V-shaped recovery. Germany and France are planning to cut their deficits next year (Germany from 6.35% to 4.25%) with the ‘peak of the stimulus’ seemingly past. The calls for consolidation are like those leading to self-induced double dip of 2011.


With the world on the brink of yet another steep recession, and with ecological disaster looming, we can no longer afford the luxury of an economic policy which concentrates on the fight against inflation, leaves unemployment to emergency measures, distribution of wealth and income to the market, and ignores ecological challenges.

Overcoming the scourage of unemployment, connecting its treatment to issues of just distribution nationally and globally, and linking both to a Green New Deal: this tripartite task is the biggest politico-economic challenge facing us.

* This article is based on Robert Skidelsky’s keynote speech at the Intereconomics/CEPS online conference “COVID-19: From Lockdown to Recovery”, 27 October 2020.


Draghi, M. (2019, 30 September), Mario Draghi declares victory in battle over the euro, Interview, Financial Times.

Keynes, J. M. (1936), The General Theory of Employment, Interest and Money, Macmillian.

Keynes, J. M. (1937), The General Theory of Employment, The Quarterly Journal of Economics, 51, 212-223.

Pigou, A. C. (1933), The Theory of Unemployment, Macmillian, 252.

Skidelsky, R. (2009), The Return of the Master, Allen Lane.

Taleb, N. N. (2007), The black swan: The impact of the highly improbable, Random House.

Keynes: die erneute Rückkehr des Meisters

In der aktuellen Corona-Krise wiederholen sich die Muster früherer Krisen. Vor dem Hintergrund sinkender Produktion und steigender Arbeitslosigkeit versuchen Notenbanken und Staaten weltweit ihre Ökonomien vor einem größeren Absturz zu bewahren. Die Rezeptur für diese Stabilisierungspolitik basiert auf der Lehre des britischen Ökonomen John Maynard Keynes, die dieser vor dem Hintergrund der Großen Depression im Jahr 1936 in seiner „Allgemeinen Theorie der Beschäftigung, des Zinses und des Geldes“ beschrieb. Doch nicht nur in der Krise, auch darüber hinaus empfehlen sich die wirtschaftspolitischen Ansätze von Keynes für das 21. Jahrhundert.

Mein Buch „Keynes: Die Rückkehr des Meisters“ erschien im Herbst 2009, ein Jahr nach dem globalen Bankenkollaps von 2008 und den massiven Rettungsaktionen, die von Regierungen auf der ganzen Welt unternommen wurden. Damit gingen der Bailout eines bankrotten Bankensystems sowie umfangreiche geld- und fiskalpolitische Konjunkturprogramme einher. Anders als nach dem Wall-Street-Crash 1929 blieben die Regierungen in der Krise 2008/2009 nicht passiv. Ich gehe davon aus, dass durch diese Eingriffe eine weitere Große Depression verhindert werden konnte: Während die Wirtschaftsleistung nach dem Zusammenbruch 1929 über 13 Quartale in der Rezession blieb, beschränkte sich der Produktionsrückgang nach dem Zusammenbruch von 2008 auf vier Quartale.

Mit dem Rücken zur Wand ist jeder ein Keynesianer

Bevor die Wirtschaft sich wirklich erholen konnte, wurden die Maßnahmen infolge der Krise 2008/2009 bereits wieder zurückgefahren. Die Angst vor einer möglichen Überschuldung ließ die Regierungen die öffentlichen Ausgaben kürzen und die „Rückkehr des Meisters“ erwies sich als kurzlebig. „I guess everyone is a Keynesian in a foxhole“, sagte Robert Lucas, der Hohepriester der Chicagoer Wirtschaft. Keynes war offenbar nur für Notfälle gedacht.

Heute ist das Muster ähnlich. Die Regierungen waren gezwungen, einen großen Teil ihrer Volkswirtschaften zu schließen, um die Ausbreitung der Coronavirus-Pandemie zu stoppen, und haben großzügig finanzielle Mittel bereitgestellt, um die Einkommen der Unternehmen und Millionen von arbeitenden Menschen zu sichern. Aber sie hofften, dass der Staatshaushalt bei der Wiedereröffnung der Wirtschaft entlastet wird, wenn der Aufschwung v-förmig verläuft. Damit die Staatsverschuldung nicht außer Kontrolle gerät, wird nun bereits wieder über Steuererhöhungen gesprochen.

Dies scheint vernünftig. Viele Unternehmer und Ökonomen halten das Marktsystem für grundsätzlich gesund. Es wird zwar von Zeit zu Zeit krank und braucht daher Medikamente, aber im Grunde ist es selbstheilend, wie der menschliche Körper. Deshalb sollte die Behandlung in Umfang und Dauer begrenzt sein. Dies gilt insbesondere angesichts der Risiken der politischen Medizin. Der britische Ökonom John Maynard Keynes (1883-1946) lehnte diese Analogie zwischen dem Marktsystem und dem selbstheilenden Körper ab und glaubte stattdessen, dass ein vom Staat unbeaufsichtigt gelassenes Marktsystem niemals gesund sein könne.

Keynes für Anfänger

Die meisten, die vom Keynesianismus gehört haben, glauben, dass diese ökonomische Schule darauf abzielt, Haushaltsdefizite zuzulassen. Das ist falsch. Keynesianismus ist eine Wirtschaftstheorie, die ein ausgeglichenes Produktions- und Beschäftigungsniveau mithilfe des Staatshaushalts ermöglicht. Das kann entweder mit einem Haushaltsüberschuss, einem Haushaltsdefizit oder einem ausgeglichenen Haushalt einhergehen, je nachdem, wie die wirtschaftliche Lage sich gerade darstellt. Es ist nicht von sich aus erstrebenswert, den Staatshaushalt auszugleichen. Vielmehr sollten konjunkturelle Auf- und Abschwünge ausgeglichen werden. Aber warum ist diese Balance so wichtig?

Keynes‘ revolutionäre Einsicht war, dass kapitalistische Marktwirtschaften nicht automatisch zur Vollbeschäftigung tendieren. Ihr Normalzustand tendiert zur Unterbeschäftigung, die sich bei einer ernsthaften Depression verschlimmert. Diese Behauptung schockierte die Ökonomen zur damaligen Zeit, deren Modelle lehrten, dass anhaltende Arbeitslosigkeit bei flexiblen Löhnen unmöglich sei. Keynes‘ Kollege aus Cambridge Arthur Pigou drückte diese Überzeugung so aus: „With perfectly free competition among workpeople and labour perfectly mobile … there will always be at work a strong tendency for wage-rates to be so related to demand that everybody is employed“ (Pigou, 1933). Ausgehend von diesem Argument, müssen sich arbeitslose Arbeitnehmer dafür entscheiden nicht zu arbeiten, indem sie auf Löhne bestehen, die die Arbeitgeber ihnen nicht zahlen können. Als Keynes während der Großen Depression die Millionen von Arbeitslosen um sich herum sah, bemerkte er, dass etwas mit den Modellen nicht stimmen kann! Die Leute wollen nicht arbeitslos sein. Sie finden unabhängig vom Lohn keine Arbeit.


Die keynesianische Ökonomik beginnt mit einem Paradigmenwechsel. Keynes geht davon aus, dass Menschen arbeitslos sind, weil es keine Nachfrage nach Arbeit gibt. Doch diese Überlegung hatte die Wirtschaftswissenschaftler nicht wirklich überzeugt. Sie führten alle möglichen ausgefallenen Gründe an, um darzulegen, dass das, was wie unerwünschte Arbeitslosigkeit aussah, tatsächlich eine „Entscheidung für Freizeit“ war. Noch heute würde ich davon ausgehen, dass die meisten Ökonomen tief im Inneren glauben, dass fast alle Arbeitslosen einen Arbeitsplatz finden könnten, wenn sie es wirklich wollten oder wenn ihnen staatliche Sozialleistungen kein alternatives Einkommen bieten würden.

Aber warum erholen sich Volkswirtschaften nicht schnell von Zusammenbrüchen? Was ist mit der Idee der v-förmigen Erholung? Sicherlich kann ich, wenn ein Arbeitgeber mich nicht mit 500 Pfund pro Woche einstellen will, meine Lohnforderung so lange senken, bis es sich für ihn lohnt, mich einzustellen. Der orthodoxe Wirtschaftswissenschaftler hat eine fertige Antwort parat: Indem Arbeitnehmer auf unrealistische Löhne bestehen, nehmen sie sich selbst die Beschäftigung. Gegen diese Annahme führte Keynes zwei Gründe an, warum selbst flexible Löhne die Vollbeschäftigung nicht aufrechterhalten oder herstellen können.

Kaufkrafttheorie der Löhne

Sein erstes Argument lautete, dass jeder Produzent auch ein Konsument sei: Mein Lohn ist dein Einkommen, denn mit meinem Lohn kaufe ich deine Waren. Wenn mein Lohn sinkt, sinkt dein Einkommen. Eine Senkung der Produktionskosten (sei es durch Lohnkürzungen oder durch Entlassungen von Arbeitnehmern) vertieft also einen Einbruch, in dem gleichzeitig die Kaufkraft und die Gesamtnachfrage verringert wird. Ein Einkommensrückgang in einem Teil der Wirtschaft reduziert die Produktion in einem anderen Teil usw. Es entsteht eine Abwärtsspirale, da sich die Arbeitslosigkeit in der gesamten Wirtschaft rasch ausbreitet. Schließlich wird die Kaufkraft erst auf einem deutlich niedrigeren Niveau stabilisiert, wenn die Menschen aufhören zu sparen. Aber nichts passiert, um den Konsum anzuregen und damit eine Erholung zu fördern. Nur ausgebildete Ökonomen kommen auf die verrückte Idee, dass der Weg in den Wirtschaftsaufschwung darin besteht, dass alle die Ausgaben kürzen.

Vertrauen und Geldhaltung

Keynes‘ zweites Argument gegen die Idee der v-förmigen Erholung hatte mit der Geldhaltung zu tun. Es ist charakteristisch für eine Krise, dass Unternehmen ihr Geld horten bzw. ihre Barreserven aufstocken, statt zu investieren. Je größer diese „Liquiditätspräferenz“, desto höher ist der Zinssatz, den die Kreditgeber verlangen. Um die Produktion anzukurbeln, brauchen Kreditnehmer aber niedrigere, nicht höhere Zinsen. Wenn also das Vertrauen gering ist, bedeuten die höheren Zinssätze, die z. B. von den Banken verlangt werden, noch weniger Investitionen, weniger Konsum und weniger Beschäftigung.

So führen flexible Löhne und unflexible Zinssätze zu einer Vertiefung des Einbruchs. Anders als bei Robert Lucas bleibt die Wirtschaft ohne staatliche „Stimulierung“ in der Rezession. Aber die Mainstream-Ökonomik erlebt ein Comeback: Depressionen oder tiefe Rezessionen sind sehr seltene Ereignisse, wie die „schwarzen Schwäne“ von Nassim Taleb (2008). Es wäre absurd, das Wirtschaftsleben so zu organisieren, als stünde der nächste Einbruch unmittelbar bevor. Marktwirtschaften würden eine innere Stabilität aufweisen, sodass Krisen sehr seltene Ereignisse wären. Das hat Keynes jedoch bestritten: Schwarze Schwäne können jederzeit aus dem Nichts auftauchen.

Der Grund dafür ist laut Keynes, dass die Theorie der „sich selbst ausgleichenden“ Marktwirtschaft von der Vorstellung abhängt, dass jeder, und insbesondere Investoren die Zukunft genau vorhersagen können. Wenn sie den Wert der Vermögenswerte, die sie heute kaufen, in zehn Jahren genau berechnen könnten, würden sie niemals Dinge zu falschen Preisen kaufen. Wie Keynes (1937) schrieb: „The calculus of probability … was supposed to be capable of reducing uncertainty to the same calculable status as that of certainty itself.“ Aber das ist ein Mythos. „Actually, however, we have, as a rule, only the vaguest idea of any but the most direct consequences of our acts“ (Keynes, 1936). Dies ist ein zweiter Paradigmenwechsel, der vielen Ökonomen die Augen öffnete. Dies hatte erhebliche Konsequenzen. Weil die Zukunft ungewiss ist, werden private Investitionen – die von der Erwartung künftiger Erträge abhängen – unstetig sein. Der Wohlstand hängt von den „animal spirits“ der Menschen ab. Wenn sie sich zuversichtlich fühlen, stellen sie mehr Arbeiter ein; wenn sie pessimistisch sind, stellen sie weniger ein.


Aus dieser Darstellung des Marktverhaltens ergeben sich zwei Schlussfolgerungen: Erstens, Zusammenbrüche sind immer möglich, weil die Zukunft ungewiss ist; und zweitens, wenn sie geschehen, gibt es keine „automatischen“ Marktmechanismen, die einen schnellen Aufschwung gewährleisten. Deshalb muss der Staat als „Ausgleichsmechanismus“ in der Marktwirtschaft wirken. Er steigert oder senkt die Nachfrage je nach Bedarf.

Diese zwei Dinge sollten Regierungen tun, und zwar nicht nur im Notfall, sondern dauerhaft:

  1. Sie sollten die Investitionen stabilisieren. Dies können sie durch öffentliche Investitionsprogramme erreichen. Keynes (1936) schrieb: „I expect to see the state, which is in a position to [take] long views … taking an ever greater responsibility for directly organising investment.“ Dies geschah in den 25 Jahren nach dem Zweiten Weltkrieg, doch seit den 1980er Jahren ist der Anteil des Staates an den Gesamtinvestitionen drastisch zurückgegangen, was die Instabilität der Investitionen erhöht.
  2. Die Regierungen sollten eine „antizyklische“ Politik verfolgen, um die Wirkung weiterer Schwankungen zu begrenzen. Das bedeutet, die Wirtschaft mit zusätzlichen Staatsausgaben anzukurbeln, wenn die privaten Ausgaben sinken, und sie zu drosseln, wenn diese steigen. Dies kann auf der Einnahmen- oder auf der Ausgabenseite oder auf beiden Seiten geschehen. Der „Multiplikator“, der auf der „marginalen Konsumneigung“ basiert, zeigt den Regierungen, welchen Gesamteffekt die zusätzliche oder reduzierte Nachfrage auf die Wirtschaft haben wird.

Diese beiden ausgleichenden Funktionen, öffentliche Investitionen und antizyklische Politik, sind notwendig, um Vollbeschäftigung und Stabilität in kapitalistischen Marktwirtschaften zu gewährleisten. Und je mehr Ressourcen kontinuierlich genutzt wurden, desto höher ist die Wachstumsrate und desto größer die soziale Zufriedenheit. Dies war – kurz zusammengefasst – die Botschaft von Keynes.


Lassen Sie uns nun die wesentlichen Einwände gegen die keynesianische Theorie und Politik betrachten. Der erste ist, wie wir gesehen haben, dass Mainstream-Ökonomen glauben, dass Marktwirtschaften eine natürliche Stabilität aufweisen, anders als es Keynes annahm. Aber es gibt auch Argumente gegen einzelne keynesianische Instrumente.

  1. Anti-keynesianische Ökonomen lehren, dass öffentliche Investitionen weniger effizient sind als private. Sie verdrängen (crowd out) sogar private Investitionen. Dies trifft zu, wenn alle Ressourcen der Wirtschaft voll ausgeschöpft werden. Wenn jedoch freie Kapazitäten vorhanden sind, können öffentliche Investitionen private Investitionen steigern (crowd in), indem sie die Gesamtnachfrage nach Gütern und Dienstleistungen erhöhen. Die meisten Regierungen haben die öffentlichen Investitionen nach den 1970er Jahren drastisch gekürzt. Das Wachstum wurde halbiert und die Arbeitslosigkeit stieg an. Tatsächlich wird ein Teil der öffentlichen Investitionen nicht effizient eingesetzt, aber das sollte mit der Ineffizienz von Arbeitslosigkeit abgewogen werden.
  2. Monetaristische Ökonomen – Nachfahren von Milton Friedman – behaupten, dass die keynesianische „antizyklische“ Politik zwangsläufig inflationär sein muss. Regierungen können den Konjunkturzyklus nicht steuern; und selbst wenn sie es könnten, würden sie im Bemühen Wählerstimmen zu gewinnen, so viel Geld drucken, dass es zu einer schleichenden und schließlich beschleunigten Inflation führen würde.

Diese monetaristische Kritik ist teilweise berechtigt. Aber auch hier müssen wir das keynesianische System mit der monetaristischen Alternative vergleichen. Monetaristen behaupten, dass die Märkte „antizyklisch stabil“ seien, wenn es keine „Schocks“ gäbe, da die Menschen rational in die Zukunft vorausschauen können. Der wichtigste „Schock“, gegen den Vorkehrungen getroffen werden müssen, sind unerwartete Änderungen des Preisniveaus. Diese können die Menschen dazu verleiten, zu falschen Preisen zu handeln. Der Schlüssel zur wirtschaftlichen Stabilität ist daher eine niedrige und konstante Inflationsrate. Dies macht es erforderlich, dass die Kontrolle der Geldmenge oder der Zinssätze aus der Verantwortung der Politiker genommen und unabhängigen Zentralbanken übertragen wird. Dieses System wurde in den 2000er Jahren in den meisten Ländern getestet. Es hat 2008 bis 2009 einen wirtschaftlichen Zusammenbruch nicht verhindert.

Selbst die Politik der quantitativen Lockerung – die Überschwemmung der Wirtschaft mit Zentralbankgeld oder M0 in den Jahren 2009 bis 2012 – führte nach dem Zusammenbruch nicht zu einer v-förmigen Erholung. Der Trugschluss der Monetaristen besteht darin, dass die Geldmenge (zu der die erweiterte Geldmenge oder Bankkredite gehören) nicht direkt unter der Kontrolle der Zentralbank steht. Wie viel Bankkredit eine Ausweitung der Geldbasis bewirkt, hängt von Keynes‘ „animal spirits“ ab. Ein sehr hoher Zinssatz kann einen Boom beenden, aber selbst ein negativer Realzinssatz führt möglicherweise nicht zu einer Erholung, wenn die „animal spirits“ sich verdunkeln.


Die Antwort auf das Scheitern sowohl des altmodischen Keynesianismus als auch des neumodischen Monetarismus besteht nicht darin, die ausgleichende Rolle des Staates aufzugeben, sondern sie so automatisch wie möglich zu gestalten. Der Staat sollte sich zu zwei Dingen verpflichten: zu einem öffentlichen Investitionsprogramm und zu einer Arbeitsplatzgarantie im öffentlichen Sektor.

Das erste würde die Investitionsschwankungen enger begrenzen; die zweite würde einen Puffer an Arbeitsplätzen schaffen, der sich in einem Abschwung automatisch ausweiten und in einem Aufschwung reduzieren würde. Öffentliche Investitionen bedeuten nicht zwingend öffentliches Eigentum. Ein Teil davon könnte durch quasi-staatliche Institutionen wie öffentliche Investitionsbanken oder Unternehmen mit staatlicher Beteiligung getragen werden. Diese würden unter einem weit gefassten zentralstaatlichen Mandat stehen und damit nationale Ziele widerspiegeln, aber unternehmerische von politischen Entscheidungen trennen. Die öffentliche Arbeitsplatzgarantie würde zentral finanziert, aber mit Projekten, die lokal ausgewählt und verwaltet werden. Das Ergebnis beider Politiken gemeinsam wäre, dass zum ersten Mal seit der industriellen Revolution unerwünschte Arbeitslosigkeit abgeschafft würde.

Marxisten würden behaupten, dass ein solches aktualisiertes keynesianisches Programm nur ein Wunschtraum ist. Eine kapitalistische Wirtschaft braucht eine „Reservearmee der Arbeitslosen“, um die Profite zu erhöhen und die Löhne zu senken. Nur eine vollständig sozialisierte Wirtschaft, so sagen sie, kann die Arbeitslosigkeit abschaffen und das Lohnwachstum aufrechterhalten. Tatsächlich wiesen die keynesianisch geführten kapitalistischen Volkswirtschaften von 1950 bis 1975 eine durchschnittliche Arbeitslosenquote von 2 % bis 3 % auf, halb so hoch wie seither, mit steigenden statt stagnierenden Löhnen, und die Inflation war nur geringfügig höher als während monetaristischer Führung.

Kein System der politischen Ökonomie ist vollkommen. Aber es sollte nicht im Vergleich mit einem idealen System beurteilt werden, sondern mit den realen Alternativen. Keynes machte sich daran, die Demokratie vor den beiden Herausforderern seiner Zeit – Faschismus und Kommunismus – zu retten. Er sagte, wenn wir angesichts der Massenarbeitslosigkeit mit der Laissez-faire-Politik fortfahren würden, würde die politische Freiheit nicht überleben. Wird das Problem aber richtig analysiert, könnte es möglich sein, die Krankheit zu heilen und gleichzeitig Effizienz und Freiheit zu bewahren.

Diese Überlegungen sind auch heute aktuell. Ich bezweifle, dass die westliche Bevölkerung über längere Zeit eine politische Ökonomie tolerieren wird, die dauerhafte Arbeitslosigkeit, häufige ökonomische Abstürze, stagnierende Löhne und extreme Ungleichheiten bei Vermögen und Einkommen mit sich bringt. Der Keynesianismus löst nicht alle wirtschaftlichen Probleme. Keynes (1936) schrieb, die beiden großen Fehler der kapitalistischen Gesellschaften seien das Versagen, Vollbeschäftigung zu schaffen, und seine arbiträre und ungleiche Verteilung von Einkommen und Vermögen. Er machte sich daran, den ersten Fehler zu überwinden, was das große Problem der damaligen Zeit war. Diese beiden Therapien mit dem Green New Deal zu verbinden, bleibt die größte wirtschaftliche Herausforderung unserer Zeit.


Keynes, J. M. (1936), The General Theory of Employment, Interest and Money, Macmillian.

Keynes, J. M. (1937), The General Theory of Employment, The Quarterly Journal of Economics, 51, 212-223.

Pigou, A. C. (1933), The Theory of Unemployment, Macmillian.

Taleb, N. (2008), Der schwarze Schwan: Die Macht höchst unwahrscheinlicher Ereignisse, Hanser.