Friday, 19 February 2016
Keynes on banks.
Strikes me he got several things right in this passage:
“This talk of mine follows on addresses from Sir Josiah Stamp [technocrat and progressive] and Lord D’Abernon [financier and diplomat]. They have told you in different ways how the behaviour of the financial system and the banking system is capable of suddenly going off the rails, so to speak, and interfering with everyone’s prosperity for obscure and complicated reasons which are difficult to understand and probably impossible to explain in a popular way. It is a matter which ought to be left to the experts. They ought to understand the machine. And they ought to be able to mend it when it goes wrong.
It is hopeless to expect the man in the street even to discover what is amiss; far less to put matters right. Unhappily, however, the machine is not well understood by anyone. In a sense there are no experts. Some of those representing themselves as such seem to me to talk much greater rubbish than an ordinary man could ever be capable of. And I daresay there are people – I am sure there are – who will say the same about me and my ideas. In other words, the science of economics, of banking, of finance is in a backward state.” (Keynes, Radio Address, ‘The Slump’, 12 April 1931).
(Hat tip to Geoff Tily)