Keynes and the Russian Revolution

In the popular view two economists are accepted as having had an outstanding influence on events of the last half-century- Marx and Keynes. Marx is supposed to have guided the aims and policies of the Russian government since the Communist Party came to power in 1917 and Keynes’ preaching of full employment and the way to achieve it has been more or less closely followed by most of the political partis in the Western world, including all the Tory and Labour governments in Britain since the end of the war.

Here, of course, is one of the issues on which Marx and Keynes came into conflict. Marx held that unemployment is a necessary feature of capitalism, while Keynes held that it should and could be reduced almost to the point of disappearance. It is nit our purpose to deal with that aspect except to say that there is nothing in the post-war rises and falls of unemployment to justify the claims of Keynes’ admirers, which does not deter them from claiming that his discoveries have revolutionised economics and politics.

There is, however, a striking difference between the relationship of Marxism to Russia and that of Keynesian to Britain and other countries. It is that British politicians and their advisers have indeed been trying to apply Keynes’ theories in their conduct of affairs, but Russian governments have been acting in complete disregard to Marx’s theories.

Marx saw that the overthrow of Tzarist autocracy would clear the way for the development of capitalism. This has indeed happened, but while the Communist Party rulers in Russia had presided over the building up of a great capitalist power they have chosen to pretend that it is Socialism.

What did Keynes make of all this? It happens that he set out what he thought in a series of articles in the NEW STATESMAN republished in a booklet A Short View of Russia published by the Hogarth Press in 1925. This was some years earlier than Keynes’ book THE GENERAL THEORY OF EMPLOYMENT, INTEREST AND MONEY but after he had made a name for himself with his ECONOMIC CONSEQUENCES OF THE PEACE and his TRACT ON MONETARY REFORM. He was already regarded as a major figure in the world of economics.

Keynes had nothing but contempt for Marx but we can now compare the maturity and accuracy of Marx’s views of developments in Russia with the superficiality of Keynes’ judgements.

For Keynes the Russian revolution was not a stage in the development of capitalism, but the emergence of a new world religion; not based on changes in the real world but engendered in the minds of the leaders, Lenin and his associates. Keynes had something in common with the Russian leaders; he shared their belief that progress comes from the “intellectual minority”. Here are two typical passages:

Like other new religions, Leninism derives its power not from the multitude but from a small minority of enthusiastic converts whose zeal and intolerance make each one the equal in strength of a hundred indifferentists”.

But quite apart from other factors, it was the indifferent multitude – indifferent that is, to Socialism -who, as the Socialist Party of Great Britain said at the time, made nonsense of the Utopian dreams of introducing Socialism in Russia in 1917.

The second quotation is an attack on Marx’s Capital, chiefly revealing for what it tells us about the smug intellectual superiority of Keynes:-

How can I accept a doctrine which sets up as its bible, above and beyond criticism, an obsolete textbook which I know to be not only scientifically erroneous but without interest or application for the modern world? How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above bourgeois and intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human advancement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values”.

Keynes had no sense of the historical development of society and showed little appreciation of the problem which faced Russia, as it does all countries in the early stages of capitalism, of accumulating capital to build up large-scale industry. His advice to the Russian government was to lower the wages of town workers, and “get itself into a sufficiently strong financial position to be able to pay the peasant more nearly the real value of his produce”. As the town workers were a small minority and the peasants the vast majority of the population, it certainly wouldn’t have solved the problem. It was about as useful as telling a starving man that what he ought to do is to get rid of a large sum of money without telling him how.

Although, for Keynes, Leninism was a religion he did not wholly approve of it, but he did believe that it would create a society in which money making and love of money would lose their hold, especially among the new generation -though not to the extent of making “Jews less avaricious or Russians less extravagant”.

But although this might be right for the Russians it was not congenial to “an educated decent, intelligent son of Western Europe”. (Who incidentally made a fortune by financial speculations). He disliked the “mood of oppression” in Russia, for which he had a simple explanation:

In part, no doubt, it is the fruit of Red Revolution…In part, perhaps, it is the fruit of some beastliness in the Russian nature – or in the Russian or Jewish natures when, as now, they are allied together”.

What can one say of such a shallow interpretation of history except that if Keynes had troubled to understand Marx, he might have known what was really taking place in Russia.

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Object and Declaration of Principles


The establishment of a system of society based upon the common ownership and democratic control of the means and instruments for producing and distributing wealth by and in the interest of the whole community.

Declaration of Principles


1. That society as at present constituted is based upon the ownership of the means of living (ie land, factories, railways, etc.) by the capitalist or master class, and the consequent enslavement of the working class, by whose labour alone wealth is produced.

2. That in society, therefore, there is an antagonism of interests, manifesting itself as a class struggle, between those who possess but do not produce and those who produce but do not possess.

3.That this antagonism can be abolished only by the emancipation of the working class from the domination of the master class, by the conversion into common property of society of the means of production and distribution, and their democratic control by the whole people.

4. That as in the order of social evolution the working class is the last class to achieve its freedom, the emancipation of the working class will involve the emancipation of all mankind without distinction of race or sex.

5. That this emancipation must be the work of the working class itself.

6. That as the machinery of government, including the armed forces of the nation, exists only to conserve the monopoly by the capitalist class of the wealth taken from the workers, the working class must organise consciously and politically for the conquest of the powers of government, national and local, in order that this machinery, including these forces, may be converted from an instrument of oppression into the agent of emancipation and the overthrow of privilege, aristocratic and plutocratic.

7. That as all political parties are but the expression of class interests, and as the interest of the working class is diametrically opposed to the interests of all sections of the master class, the party seeking working class emancipation must be hostile to every other party.

8. The Socialist Party of Great Britain, therefore, enters the field of political action determined to wage war against all other political parties, whether alleged labour or avowedly capitalist, and calls upon the members of the working class of this country to muster under its banner to the end that a speedy termination may be wrought to the system which deprives them of the fruits of their labour, and that poverty may give place to comfort, privilege to equality, and slavery to freedom.