Keynes John Maynard (1883–1946), English economist and public servant who revolutionized economic theory and the application of economic theory in government policy. His most philosophically important works were The General Theory of Employment, Interest and Money (1936) and A Treatise on Probability (1921). Keynes was also active in English philosophical life, being well acquainted with such thinkers as Moore and Ramsey. In the philosophy of probability, Keynes pioneered the treatment of propositions as the bearers of probability assignments. Unlike classical subjectivists, he treated probabilities as objective evidential relations among propositions. These relations were to be directly epistemically accessible to an intuitive faculty. An idiosyncratic feature of Keynes’s system is that different probability assignments cannot always be compared (ordered as equal, less than, or greater than one another). Keynesian economics is still presented in introductory textbooks and it has permanently affected both theory and practice. Keynes’s ecoimportant dimensions. While his theorizing was in the capitalistic tradition, he rejected Smith’s notion of an invisible hand that would optimize the performance of an economy without any intentional direction by individuals or by the government. This involved rejection of the economic policy of laissez-faire, according to which government intervention in the economy’s operation is useless, or worse. Keynes argued that natural forces could deflect an economy from a course of optimal growth and keep it permanently out of equilibria. In the General Theory he proposed a number of mechanisms for adjusting its performance. He advocated programs of government taxation and spending, not primarily as a means of providing public goods, but as a means of increasing prosperity and avoiding unemployment. Political philosophers are thereby provided with another means for justifying the existence of strong governments.
One of the important ways that Keynes’s theory still directs much economic theorizing is its deep division between microeconomics and macroeconomics. Keynes argued, in effect, that microeconomic analysis with its emphasis on ideal individual rationality and perfect competition was inadequate as a tool for understanding such important macrophenomena as employment, interest, and money. He tried to show how human psychological foibles and market frictions required a qualitatively different kind of analysis at the macro level. Much current economic theorizing is concerned with understanding the connections between micro- and macrophenomena and micro- and macroeconomics in an attempt to dissolve or blur the division. This issue is a philosophically important instance of a potential theoretical reduction.
See also PHILOSOPHY OF ECONOMICS , PROBABILIT. A.N.
