Reading Keynes part 1

It was my fortieth birthday recently and I was glad to be presented with many books. Amongst them, courtesy of my father, were The Wealth of Nations by Adam Smith and The General Theory of Employment, Interest and Money by John Maynard Keynes. I decided to start reading the latter book first. This is the first in a series of posts in which I'll try and explain what I've got out of the experience.

First off, I'm not an economist by training, but the problems with economies around the world in recent years have kindled my interest, especially when I began to appreciate that so-called "Keynesian" solutions, as described by the likes of Paul Krugman, seemed to not only stand up to skeptical, rational scrutiny but also had a very solid basis in historical precedent. Before going further, the very first thing I learned is that Keynes is pronounced canes, not keens.

Not being an economist of the early 20th century makes reading Keynes's classic book a bit of a challenge. My first stumble was when I encountered the word "disutility". I tried and failed to understand it from the context and a search of the web kept leading back to extracts from the book itself. It turned out that "utility" is a term in economics used to quantify human satisfaction and that the word "disutility" was either peculiar to Keynes himself, or else is now arcane. The term appears in the context of Keynes disputing the received economist wisdom of his time that workers settle for a real-wage (i.e. in real terms, not in terms of an amount of money) that is just sufficient to make their employed state of greater utility (or lesser disutility) than their unemployed state. If you are struggling with that last sentence, then you have a sense of what it feels like to read Keynes's book.

The point is valid though. An employee will immediately seek redress with their employer if forced to take a pay cut, i.e. the money-wage is reduced, but may not even notice if the real-wage is reduced, say, because prices of everyday items have increased. Even if noticed, the employer is unlikely to see rebargaining the wage as their problem; they too may be faced with increased business costs due to increased prices. This situation is playing out just now across Europe: in Spain and Greece people are understandably furious at having to take money-wage cuts (or else be made unemployed) to solve economic problems that were not of their creation. Meanwhile, outside the land of the Euro, in Iceland, most people implicitly accepted real-wage cuts when the Icelandic currency was devalued.

The next piece of received wisdom at which Keynes takes aim is the notion that "Supply creates its own demand". That strikes me as immediately strange, but nevertheless there are still people who believe it today. One implication of it is that there should be no involuntary unemployment, on the basis that everyone who wishes to work can do, because when they produce something, there will be a demand from someone, somewhere to buy it. This seems so obviously absurd that you may wonder why it would need refuted, either in 1936 by Keynes, or by anyone today. Of course, the absurdity of it is not often as plainly stated as this, but it is implicit in much economic wrong-thinking. In fact, as Keynes sets out, if you believe in "supply creates its own demand" or one of many equivalent variants of that statement then you are actually adopting an economic model that assumes there is no real barrier to full employment. In boom times that might not be so bad a model, but during a depression, like the current one, it's simply the wrong model to adopt. To use an analogy: if a car fails to start, no amount of tinkering with the engine will help if you've incorrectly assumed that it has sufficient fuel in the tank.

But, that said, after only having read books I and II of Keynes' classic text, I have not yet encountered anything else that you would recognise as "Keynesian", e.g. that governments should spend their way out of a recession. Instead, Keynes has merely sketched his ideas in broad brush and then painstakingly set out a series of definitions of net income, investment, saving and something called "user cost" (akin to depreciation, except that no cost is incurred if equipment is idle) so that he can go on to describe his theory in subsequent books. In other words, he found the economic descriptions of his own time too vague and imprecise to formulate his theory and so invented his own.

I am not one who is prone to hero-worship and I certainly do not worship Keynes nor accept his ideas without question. But it is clear Keynes was a very intelligent person and, more importantly, an independent-minded individual. Don't take my word for it - have read (or listen) to what philospher John Gray had to say about him.

Lucentis - a poke in the eye

Yesterday I received my first eye injection to treat the condition that has developed with the retina in my left eye. I can't say I relished the prospect of someone sticking a needle in my eye and squirting liquid into it, but then again, I was nowhere near as aghast or horrified as the people I told about it - one person said "don't tell my husband, he'll throw up on you!".

No doubt, the ghoulish reader will want me to get straight to the bit where I describe the crazed doctor, laughing maniacally, stabbing me in the eye causing me to convulse and scream in agony. Well, there you go, I've just done it. Non-ghoulish readers, read on...

In the week since I'd been diagnosed, the distortion had spread across my retina so that it now affects the centre of my vision. This perturbed me enough so that I returned to the hospital and successfully (and politely) argued with the medics to get the treatment brought forward by a week. If the damage was likely to be permanent, it was paramount to get treatment as soon as I could.

I arrived at the eye clinic at 8.45am on a Tuesday morning for my injection, but was kept waiting for an hour. It's beyond me how you can be an hour behind at the start of the day, but the lumbering, administration-heavy machine that is the NHS is like that. That said, in my experiences, and as this story will demonstrate, the care that machine facilitates, to every citizen of the UK, regardless of income or means, is very definitely not broken.

My fellow eye-patients probably had an average age of well above seventy, and these veterans of the eye clinic, and life in general, sat there looking relaxed and possibly slightly bored. I have to marvel at the stoicism of elderly Glaswegians. If these old codgers and codgerinas could stick it, so could I.

The substance to be injected into my eye is called Ranibizumab, though it is more commonly known by its brand name Lucentis. It is derived from an antibody found in mice and inhibits the growth of blood vessels which may leak fluid into the eye, causing the edema (swelling) that is distorting my retina. Apparently Lucentis costs over $1000 per dose, whereas there exist alternatives priced at $40 per dose that are claimed to be as effective. I suspect massive profiteering is going on here and plan to investigate further.

Anyway, after 45 minutes in the large, main waiting room, and 15 minutes sat in a chair in a corridor, I was called into the small room. There was a reclining, padded chair, much like one you'd find in a dentist's surgery, a table and a cabinet stuffed with packets of medical equipment. It was soon apparent who the doctor was, as he swept around the room, talking in a clear, confident voice, not a hint of doubt coming into anything he said. There was also a specialist nurse and he too seemed sure of what he was doing, but spoke less and was more garbled. And there was another nurse who, after than showing me into the room, seemed to be waiting quietly in the corner.

I lay down on the chair and it whirred and reclined me. I asked the doctor a few questions about my condition and he gave me clear, matter-of-fact answers. Apparently, some people thought eating leafy greens helped this condition and, he said, it was always good to be trying things that made you think you were helping yourself. After I said I wasn't a smoker, he spoke a bit about how bad smoking was for macular edema and health in general.

Through all of this conversation, he and the specialist nurse were buzzing about me, swabbing my eye, preparing the eye and giving me a few anesthetic drops. I think this went on for about ten minutes and the chat not only informed me but helped keep me distracted. Since I wasn't wearing my glasses I couldn't really see much, but I was thinking "is the needle coming now?" They placed something like a large plaster over my eye and peeled a layer away to reveal a transparent layer. I think this was to hold my eye in place with the eyelid clamped back, but I was already doing my level best to keep my eyes still. I suspected the moment was coming when the nurse took my hand and began to squeeze and stroke it gently. Simultaneously, the doctor who was hovering around behind me and to my left began to move something towards my eye. Being so myopic I couldn't see it, which was probably a good thing, and then there was a strange sensation - not pain, more like a dull ache. A giant floater appeared in my eye and I mentioned it. The doctor apologised, saying that a wee bit of air had got in, but it should be harmless and would sink to the top of my vision when I stood up (the image on the retina is inverted, the brain reverts for you).

So that was it. I really couldn't fault the way it was done: friendly, professional and caring. If I was a macho man, I might have rejected the nurse's hand-holding, but I'm not and it helped. She was doing more than a job, she was caring about her job and the human before her. I could easily imagine a bean-counter, administrator saying "we don't need two nurses in the Lucentis clinic", but if they did, someone with more sense prevailed.

For the rest of the day, it felt like there was something in my eye and so I was blinking a lot and it was very teary. I suspect that the "something" in my eye was a little rough spot on my eyeball where the needle went in and that was irritating my eyelid. The eye was a little red, but other than that and a slightly dull ache around my eye, I experienced no other untoward symptoms.

The distortion in my left eye has got no better or worse in the last week or so, but it is quite possible that it stabilised by itself before the injection.  My brain is doing a better job at compensating: unless I consciously look for it, the distortion isn't apparent to me most of the time. My binocular vision is still a little compromised as my brain struggles to reconcile the different images coming from my left and right eyes, but I think it's improving too. I try to give it a helping hand by increasing font sizes on the computer, for which the zoom function in my web browser (firefox) comes in very handy. So far, so good.

But, I'm remarkably lucky. Does every human on Earth get such treatment? Would I have got it 100 years ago in this country, without the NHS? No. I'm very, very grateful and I hope that one day everyone can expect at least this level of heath care.