Economics and Ethics: Keynes on the Purpose of Economic Activity and the Justice of Economic Exchanges

Templeton Lecture Series

Lord Robert Skidelsky
University of Warwick

Date: February 20, 2001
Location: Gasson 305


On February 20, 2001 the second speaker in the Boisi Center's Templeton Lecture series, Professor Lord Robert Skidelsky, addressed a gathering of students and faculty in the Fulton Debate Room of Gasson Hall. Lord Skidelsky, whose third volume on the life of the economist John Maynard Keynes will be published in the U.S. this spring, focused on the relationship between ethics and economic science in Cheyenne's work.

Skidelsky recalled for the audience that in its infancy, economics was considered a "moral science." Keynes himself was strongly influenced by G.E. Moore's Ethica Principia, whose ethical criteria appears throughout much of Keynes' work. Keynes was ultimately interested in the kinds of social and economic relationships that would lead to a moral society. He saw the pursuit of capital as a means to an end, but not necessarily as a "good" end in and of itself, ranking it below public service in the natural hierarchy of values. For Keynes a life devoted to making money requires that avarice be the highest value, whereas he felt the pursuit of money needed to be tempered by a sense of fairness and justice.

Skidelsky argued that Keynes would endorse several medieval laws against usury and avarice. Keynes believed that charging interest was justified only to the degree that the lender recaptured their lost "opportunity" cost for that money, but not in order to make large profits. Skidelsky also noted that Keynes felt inflationary measures were unjust. He equated instability in the value of money within justice. Extreme inflation or deflation robbed hard-working individuals of the medieval notion of a "just price.”

During the question and answer period, Skidelsky and several audience members discussed the de-coupling of ethics and economics, and how they could be reunited. To that end, Skidelsky advocates a return to a more liberal arts curriculum in the universities. He views the study of philosophy and especially history as a way to offset the over-specialization of fields like economics and business in general which have little room for ethics.

In addition to his work on Keynes, Skidelsky is also the author of numerous works on post-collectivization including, The Road From Serfdom: The Economic and Political Consequences of the End of Communism. His career in public life includes a stint as a counselor to former British Prime Minister Margaret Thatcher and he currently serves in the House of Lords as a Conservative spokesman on the Treasury. He also serves as the chairman of the Social Market Foundation and is professor of political economy at the University of Warwick.