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A Critical Reorientation of Keynes's Economic and Philosophical Thoughts

Izumi Hishiyama


To Keynes, probability is a property, not of natural and social events, but of an individual's knowledge; an idea that originated, it would appear, from the views of Locke and Hume.1 That position is clearly distinguished from the character of 'frequency theory'.

Probability in Keynes is not the 'probability of events' but the 'probability of propositions', stated in the same way as in the case of Wittgenstein. Note that Keynes does not mention Wittgenstein in the index of A Treatise on Probability (TP) (Keynes, 1973a [1921]). Probability is, however, a property inherent not in propositions themselves but in our 'degrees of rational belief'. We entertain these in the conclusive propositions that are arrived at, in virtue of our inferences based on the premise, that is, of 'a corpus of knowledge, actual or hypothetical' (TP, p. 4).

To this extent, Keynes's probability is subjective, but he considers it as objective and logical by emphasizing the logical relation between propositions. Keynes states:

What particular propositions we select as the premises of our argument naturally depends on subjective factors peculiar to ourselves; but the relations, in which other propositions stand to these, and which entitle us to probable beliefs, are objective and logical.

(TP, p. 4)

According to Keynes, this 'objective and logical' concept of probabil- ity23 has not been treated as a subject worthy of consideration. He is, nevertheless, sure that such 'probable beliefs' are the basis of arguments in almost all the empirical sciences and serve in the decision-making process of our everyday lives. In other words, in order to consider the principal logical properties of probability through a consistent scheme, we must establish 'une nouvelle espece de logique qui traitroit des degres de probabilite', as Leibniz wrote (TP, p. 3). And that is precisely Keynes's main theme in TP.

This chapter, among other things, breaks through the difficult core of Keynesian thought - the 'logical justification' of inductive methods (TP, p. 241). It focuses on the assumption of methodological individualism, or the 'atomic' hypothesis,4 with regard to the 'whole' versus 'parts' question both in TP and in The General Theory of Employment Interest and Money (GT) (Keynes, 1973b [1936]). Emphasis is then placed upon clarifying whether, and to what extent, inductive methods justify methodological individualism, and what differences and limits with respect to that assumption exist in those works. Moreover, as for the whole-parts question, this chapter examines the viewpoints of eminent scientists and scholars selected from the fields of natural and moral sciences, and compares them with Keynes' s conception. The chapter concludes by proposing a way to critically reorient Keynes's economic theory in order to coordinate and integrate it with Sraffa's theory.

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