Keynes and Gesell: Political and Social Philosophy, Epistemology and Monetary Reform

Abstract

It is conventional now to understand Keynes’s economics in terms of his philosophy. The particular connection has been made between his epistemology and his theory of liquidity preference and his approach to policy. Here we widen the scope to include social and political philosophy as well as epistemology and consider how these influenced Keynes’s position on monetary reform. We consider monetary reform particularly in terms of Gesell’s proposal for stamped money, effectively for a negative rate of interest. It is argued that Keynes and Gesell had much in common in terms of social and political philosophy. But Keynes’s epistemology generated a different approach to monetary theory and policy advice, and thus to monetary reform from that of Gesell. In particular Keynes came to different conclusions about monetary reform depending on context.