Must-Read: John Maynard Keynes (1938): On Tinbergen. To Harrod http://economia.unipv.it/harrod/edition/editionstuff/rfh.34a.htm: “My dear Roy…

…I think we are a little bit at cross purposes. There is really nothing in your letter with which I disagree at all. Quite the contrary. I think it most important, for example, to investigate statistically the order of magnitude of the Multiplier, and to discover the relative importance of the various facts which are theoretically possible.

My point against Tinbergen is a different one. In chemistry and physics and other natural sciences the object of experiment is to fill in the actual values of the various quantities and factors appearing in an equation or a formula; and the work when done is once and for all. In economics that is not the case, and to convert a model into a quantitative formula is to destroy its usefulness as an instrument of thought. Tinbergen endeavours to work out the variable quantities in a particular case, or perhaps in the average of several particular cases, and he then suggests that the quantitative formula so obtained has general validity. Yet in fact, by filling in figures, which one can be quite sure will not apply next time, so far from increasing the value of his instrument, he has destroyed it. All the statisticians tend that way. Colin, for example, has recently persuaded himself that the propensity to consume in terms of money is constant at all phases of the credit cycle. He works out a figure for it and proposes to predict by using the result, regardless of the fact that his own investigations clearly show that it is not constant, in addition to the strong a priori reasons for regarding it as most unlikely that it can be so.

The point needs emphasising because the art of thinking in terms of models is a difficult–largely because it is an unaccustomed–practice. The pseudo-analogy with the physical sciences leads directly counter to the habit of mind which is most important for an economist proper to acquire.

I also want to emphasise strongly the point about economics being a moral science. I mentioned before that it deals with introspection and with values.[3] I might have added that it deals with motives, expectations, psychological uncertainties. One has to be constantly on guard against treating the material as constant and homogeneous in the same way that the material of the other sciences, in spite of its complexity, is constant and homogeneous. It is as though the fall of the apple to the ground depended on the apple’s motives, on whether it is worth while falling to the ground, and whether the ground wanted the apple to fall, and on mistaken calculations on the part of the apple as to how far it was from the centre of the earth.

But do not be reluctant to soil your hands, as you call it. I think it is most important. The specialist in the manufacture of models will not be successful unless he is constantly correcting his judgment by intimate and messy acquaintance with the facts to which his model has to be applied.

I have every intention of writing my paper for Cambridge,[4] but whether I shall turn up to read it in person is very much more doubtful. As regards your own address,[5] I would strongly urge on you that it would be a much better plan to read a curtailed version and leave the audience to study a complete text of it later, than to recite the printed version at a great pace, relying on the audience to follow in the text. In fact audiences do not follow in the text, if only for the reason that reading pace is quite different from speaking pace, even when the latter is accelerated. You want to catch the attention of the audience to the impact of your own personality on the text. The details of the latter they can pick up much more satisfactorily and completely when they get home[a].

Yours ever,

J M Keynes


Notes:

[1] The letter (misdated 16 July 1938 in Keynes’s Collected Writings) was only received by Harrod two weeks later: see letter 799.

[2] C. Clark, “Determination of the Multiplier from National Income Statistics”, Economic Journal XLVIII, September 1938, pp. 435-48.

[3] Letter 787.

[4] “The Policy of Government Storage of Foodstuffs and Raw Materials” (1938), which was eventually read by G. Shove (see letter 812 ). Keynes had originally suggested a different topic: see letter 749.

[5] Harrod, “Scope and Method of Economics” (1938:15).

[a] TLS with autograph corrections, four pages on four leaves numbered from the second, in HP II-79. Further copy, marked “CO/15” at the top of the page, in HP II-200. CcI in JMK CO/11/277-80. The letter is printed in Keynes, Collected Writings, vol. XIV, pp. 299-301. Reproduced by kind permission of the Provost and Scholars, King’s College, Cambridge.