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Monday June 17th 2019Tim Candler9

 

    Keynes' understanding of price fluctuations in equity markets, which very much includes an intellectual devotion by share holders to 'anticipating what average opinion expects the average opinion to be' in the decision to buy or sell shares in a stock exchange, does in some ways reflect what can be thought of as a "General Will." The argument is a political populist argument that goes something like this: Individuals are subject to error and seduction, but not the general mass of people, who know what they want and they understand the level of their own independence, or freedom, without being told, and because of this the judgment of the people, as opposed to an elite, is pure and less corrupt. Which is why, the argument goes, "the people" or the "general will" take precedence over the elites.

 

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   Historically one of the issues with populism is the extent to which the general will tends to degrade the role of institutions, dismiss them as far too dominated by elites and as a result a long way from pure. Historically with populism it very easily becomes dogmatic and ethnic, rather than pluralist, in nature. And of course the general will, like market places, is subject to manipulation. Before Keynesian economic thinking, in the classic free market economic model, boom and bust was considered an entirely rational process of disciplining, or perhaps purifying, markets. And it's also very true that members of the political class who devote themselves to achieving power through populist movements do tend toward tyrannical impulses. And generally speaking, history suggests tyrannical regimes are prone to a cycle of boom and bust. The question is the extent to which tyrannical regimes can manage boom and bust of the general will. It's also the case that Liberal Democracy, free elections, free press and so on has over time been good at managing the General Will. Pretty sure Keynes would agree.

  

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