Thomas More Institute

Following the financial crash of 2008 the economic ideas of John Meynard Keynes experienced a revival. Some argue that the recent policies of both the British and American governments are Keynesian. The British Prime Minister at the height of the crisis, Gordon Brown, actually referenced Keynes in announcing a fiscal stimulus. Keynes is well-known for his economic thought concerning the role of government.

A less well-known part of the economic thinking of Keynes concerns ‘social value’: certain investments produce greater societal benefit than others. Short-term investments result in a few individuals benefiting at the expense of wider society. They may be ‘anti-social’ and rooted in the basest of human instincts. An investment with ‘social value’, on the other hand, which generally looks to the long term, has ‘virtuous’ results

Crucial to this approach is the notion that neither business nor governmental spending is undertaken in isolation, since it has an impact upon the health and well-being of society. Investments made solely for personal monetary gain tend to fracture society. Those which seek the good of society tend to develop the skills and purpose of the greatest possible number of individuals and a sense of responsibility towards others. This should enhance the cohesion of societal bonds.

The ‘Big Society’ is often described as the current Prime Minister’s big idea. Supporters of the concept argue that a society wherein individuals have a sense of duty and personal responsibility towards the community will be fairer and more harmonious. Services that were previously the remit of the State, should be provided by charities and voluntary organisations.

In fact, prior to the election of David Cameron to the Conservative leadership, the idea that the State should loosen its grip on service provision already had some traction. Significant figures in the policy world were already suggesting that greater diversity and quality would result from allowing charitable and community organisations to take over the running of certain services. It was thought that such organisations, more sensitive to local needs, would focus primarily upon providing the service, resulting in reduced bureaucracy and greater efficiency. The ‘Big Society’ might fairly be described as a rephrasing or rehashing of such ideas.

Arguments about efficiency and cost are critical to most contemporary argument about the economy. Reference to ‘social value’ does not commonly feature. A government, however, that invests (not only in cash terms) in charitable and community organisations is surely promoting and increasing social value.

Recent economic orthodoxy holds that the pursuit of Keynesian economics results in stagnant economies and bloated States. Its post-crisis revival has provoked surprise and criticism. If only the economist’s notion of social value could be seriously revived we might look to an arguably even more important long-term revival of society and community.