 which we will resume very shortly with Professor Ronald Hayden Preston's lecture. Before I call on my colleague for the introduction of Professor Preston, let me mention one aspect of the conduct of our program that will be responsive to some of the suggestions that I've been receiving as the program has continued. I again invite you to submit questions for our consideration and for the panel to take up. We are aware that we have not been able to devote as much time to questions from the floor as we hope to and expect to before the program has finished. We very much invite your questions and we will try very hard, henceforth, to see that they get some attention. My colleague, Professor Garrett Paul, then to introduce Professor Preston. On two separate occasions during this conference, it has been remarked to me that economics and theology seem to have a great deal in common. I may be mistaken, but I do not think that the comparison was intended to be complementary for either discipline. But economics and theology do have much in common for their concerns overlap at several points. The questions of political economy have been very much at the heart of theological ethics throughout this century and it is safe to predict that the same will be true for the remainder of the century. The reason for this is, as Professor Booner reminded us yesterday, that economics involves a normative vision of human being and that question occupies theologians as well. Both economics and theology ask, what is a person? What should a person be and do? What should be the relationship of an individual person to the communities that sustain her or him? Our next speaker is eminently qualified to address the legacy of Keynes with ethical questions in view. Ronald Hayden Preston has had a long and distinguished career in the church and the academy during which he has maintained his interest in that stimulating and frustrating area where theology, economics, politics, and ethics meet. His first academic degree was the Bachelor of Science in Economics from the London School of Economics. This was followed by graduate study at Oxford and Manchester. He has held numerous important ecclesiastical positions in addition to his academic appointments at the University of Manchester where he was lecturer in Christian ethics until 1970, Samuel Ferguson Professor of Social and Pastoral Theology from 1970 to 1980 and is now Professor Emeritus. Professor Preston's involvement in social and economic questions dates back to the crisis of the Great Depression. Indeed, when Keynes' general theory was published in 1936, then student Preston was already serving as Industrial Secretary of the Student Christian Movement. Also in that same year, 1936, Professor Preston published an essay titled The Christian Case Against Capitalism which appeared in Reinhold Niebuhr's Journal Radical Religion. His activity reaches from that epic age down to the present as indicated by two of his more recent books entitled Religion and the Persistence of Capitalism and Church and Society in the late 20th Century. With the rich and varied background in theology and economics that reaches back to the era of Keynes himself and extends to present day social questions, the Reverend Cannon Professor Preston is eminently qualified to address us today on his chosen topic of the ethical legacy of John Maynard Keynes. Please join me in welcoming Professor Preston. Ladies and gentlemen, as you know, I am the odd man out in this conference, the amateur among the professionals. I must say I found this a matter of some apprehension in advance and it is not entirely dissipated by the experience of participating. But I must say the task of thinking about the ethical legacy of John Maynard Keynes is one that I have found extremely interesting and I hope I will be able to convey some of that interest to you. At a recent colloquium in Canada, I heard Keynes referred to as ethically an empty box yet he himself took ethics seriously. It will be wise if this adverse verdict is in our minds as we consider his ethical legacy. There are three stages in our inquiry. First, what was his general ethical position? What was the intellectual and social context in which he acquired it and which made it so cogent to him? Did he modify it in later life? Then we must look at the way in which he applied his general moral philosophy to the economic order in the shape of laissez-faire and his hopes and forecasts for its future. And third, we need to appraise his views on the relation of ethics to economics and on the ethical problems of living with uncertainties in making economic decisions on which he laid so much stress. There is no doubt where to begin. In September 1938, at his home in Sussex, Keynes read a paper, My Early Beliefs, to a memory club, the members of which were friends of his. The paper was not published in his lifetime, but in his will he expressed the wish that alone of his unpublished writings, this should appear. Together with a memoir, Dr. Melchior, a defeated enemy, who was a German Jew with whom he negotiated at the peace conference in 1919 and for whom he came to feel a distinct rapport. Both are very fine pieces of writing, showing Keynes' sensitivity and his skill in the use of words to express it. Keynes arrived at Cambridge University as a fresher in 1902. Immediately he came under the influence of G.E. Moore, a moral philosopher whose book Principia Ethica was published in 1903. This book had an immense influence the decades among moral philosophers in the Anglo-Saxon world, and it is still constantly referred to in any survey of 20th century moral philosophy. It was in a private club, the Apostles, which Keynes was soon invited to join, that he met Moore. In My Early Beliefs he says, Now what we got from Moore was by no means entirely what he offered us. He had one foot on the threshold of a new heaven, but the other foot in Siegwick and the Benthamite Calculus and the general rules of correct behavior. There was one chapter in the Principia Ethica of which we took not the slightest notice. We accepted Moore's religion, so to speak, and discarded his morals. Indeed, in our opinion, one of the greatest advantages of his religion was that it made morals unnecessary, meaning by religion one's attitude towards oneself and the ultimate, and meaning by morals one's attitude to the outside world and the intermediate. He adds, Our religion closely followed the English Puritan tradition of being chiefly concerned with the salvation of our own souls. Our religion was altogether unworldly. With wealth, power, popularity, or success, it had no concern whatever. They were thoroughly despised. He goes on to say, I have called this faith a religion, and some sort of relation to neoplatism it surely was, but we should have been very angry at the time with such a suggestion. We regarded all this as entirely rational and scientific in character. Under a branch of science, it was nothing more than the application of logic and rational analysis to the material presented as sense data. Our appreciation of good was exactly the same as our appreciation of green, and we perpated to handle it with the same logical and analytical techniques which was appropriate to the latter. Bertrand Russell's Principles of Mathematics came out in the same year as Moore's Principia Ethica, and the former in spirit furnished a method for handling the material provided by the latter. The aim was to make vague notions clear by using precise language and asking exact questions. What exactly do you mean? Was a question often asked in the club? There can of course be no quarrel with this. Its error was the further assumption that if precise questions could be formulated, issues long in dispute would be seen to have a clear answer. And a problem with it was the exclusion of the realm of mystery, ambiguity and imagination from serious consideration. In preoccupation with extreme literalness in the use of everyday words, ambiguity appeared slipshod. In his chapter The Ideal in Principia Ethica Moore maintained, no one probably who has asked himself the question has ever doubted that personal affection and the appreciation of what is beautiful in art or nature are a good in themselves. This is the ultimate and fundamental truth of moral philosophy. It is only for the sake of these things in order that as much of them as possible may at some time exist that anyone can be justified in performing any public or private duty. They are the raison d'etre of virtue. It is they that form the rational ultimate end of human action and the sole criterion of moral, of social progress. Moore thought of himself as a pioneer. These appear to be truths which have been generally overlooked, he writes. It did not seem probable to him that they might be questioned. Keynes says that this religion was a very good one to grow up under. However, he reflects that it is remarkable how oblivious Moore managed to be of the qualities of the life of action and also of the pattern of life as a whole. He was existing says Keynes in a timeless ecstasy. Keynes says the New Testament is a handbook for politicians compared with the unwoldiness of Moore's chapter on the ideal. Keynes seems to see no reason to shift from these fundamental intuitions and indeed he did not. But he says they are much too few and too narrow to fit actual experience. Nevertheless, the life of passionate contemplation and communion enabled the apostles to escape from the benthamite tradition, which says Keynes is the worm which is being gnawing at the inside of modern civilization and is responsible for its present moral decay. He says we're used to regard the Christians as the enemy because they appeared as the representatives of tradition, convention and hocus pocus. In truth, it was the benthamite calculus based on an overvaluation of the economic criterion which was destroying the quality of the popular ideal. Further, Keynes goes on to say that the apostles also ignored Moore's discussion and the duty of the individual to obey general rules. They claimed the right to judge every individual case on its merits. We repudiated entirely customary morals, conventions and traditional wisdom. We were, that is to say, in the strict sense of the term immoralists. This he says has deeply coloured the course of their lives. And as he is concerned, it is too late to change. I remain and all worlds will remain an immoralist. However, he goes on to say that this attitude was flimsily based and disastrously mistaken. In a powerful passage, his diagnosis is we were among the last of the utopians who believed in a continuing moral progress by virtue of which the human race already consists of reliable, rational and decent people influenced by truth and objective standards who can safely be released from outward constraints of convention and traditional standards and inflexible rules of conduct were left from now onwards to their own sensible devices, pure motives and reliable intuitions of the good. In short, we repudiated all versions of the doctrine of original sin. We were not aware that civilisation was a thin and precarious crust only maintained by rules and conventions skillfully put across and guilefully preserved. We had no respect for traditional wisdom or the restraints of custom. We lacked reverence for everything and everyone. We completely misunderstood human nature, including our own. The rationality we attributed to it led to superficiality of judgement but also of feeling. Finally, Keynes follows this disavowal of the over-emphasis of the rational in life by denying the existence of any authority or standard to which he can appeal if what he thinks of as normal behaviour is under threat. And he ascribes a tendency of his still to do so as perhaps some hereditary vestige of a belief in the efficacy of prayer. An example of his tendency to produce wilder sides in conversation and in writing which characterised his undergraduate days and which never quite left him so much for the substance of his account of his early beliefs. Why did it seem so convincing to him in the Cambridge of the early 1900s? As a boy, he had a conventional church upbringing. The family who lived in Cambridge had non-conformist connections. His father, John Neville Keynes, was a distinguished university teacher and administrator. Only since the university's test act of 1871 had most of the offices and administration of the university been open to those who were not members of the Church of England and had fellows of colleges of the university been freed from the requirement of subscribing to the 39 articles of religion of the established Church of England. The family attended Immanuel Congregational Church on Sunday mornings. Maynard, as an adolescent, went to Eaton College, perhaps the most socially distinguished and one of the most intellectually distinguished of English public, that's to say in American terms English private schools. Like most of the public schools it had an Anglican foundation. Maynard attended Chapel and was confirmed at the age of 15. Let us home express criticism of chapel preachers. But the criticisms are in general terms of schoolboy disparagement with no precise intellectual or moral specificity. His brother Jeffrey says that although intellectually interested in religion, Maynard and I at the age of 17 or 18 passed painlessly, as did my sister, into a natural state of agnosticism. The only clue as to the reasons for this loss of faith is a remark by C. R. Fay, a college friend. Keynes was staying with him in Liverpool and explained to him as they were on the way to church on Sunday that T. H. Huxley had exploded Christianity. Christian beliefs to him and to the club were irrational. They occasioned raised eyebrows and were not to be taken seriously. In this easy assumption that science had exploded Christianity, it was in tune with a powerful zeitgeist. Darwin's The Origins of Species had been published in 1859 and in Cambridge as elsewhere many intellectuals lost their Christian and religious beliefs. The Victorian order rested for the most part on a combination of evangelical religion combined with social deference. What was to replace it? It was a serious question involving religion in Keynes' sense of the word and ethics. Huxley had advocated the retention of the Christian ethic but the rejection of Christian theology. Another possibility was the erection of an all-embracing metaphysics which would comprehend the whole of the universe in a tightly argued deductive system which would include a social philosophy. This was more characteristic of Oxford than Cambridge. G. E. Moore represented a reaction from this in favour of a philosophy of common sense more in line with the British empirical tradition from Locke onwards. It was an attempt to prick what was thought to be philosophical bombast and rhetoric and to substitute candour, clarity and a cool frankness which exposed superstition and Kant and called in question existing institutions and conventions. Moore was obsessed with the need for clarity as he understood it. It seemed to be a new dawn. Those influenced by Moore thought of themselves as the first generation to ask with sufficient care what the two precise questions which it was a task of ethics to answer. What states of affairs or kinds of things are intrinsically good and ought to exist for their own sakes? And secondly, what kinds of action ought we to perform? We have already noted Moore's answer the first and he held that these goods are simple and unanalyzable. We just recognise them when we think about the good. His answer the second was those actions which will cause more good to exist in the universe than any possible alternative. What this assumed as Keynes was later to see was a society sufficiently stable in its social and financial arrangements and the place of a social and intellectual elite within it suitably provided with domestic servants to enable the practitioners of Moore's ethic to devote their time to the acquisition of desirable states of mind. It was also influenced by a mood of automatic progress which was common in the early 1900s. Leonard Wolfe, for instance, returning from the salon in 1911 as a member of the Bloomsbury Group, a kind of intellectual salon to which many of Keynes' friends belonged for the next 20 years in London, Leonard Wolfe thought that the world was on the brink of becoming civilised and he was not untypical among Keynes' associates. D.H. Lawrence saw things differently and it was reflection on Lawrence's contemptuous dismissal of the Bloomsbury Group as done for which prompted Keynes to write my early beliefs. Lawrence thought it corrupt. It was certainly parochial and class-bound. It was at the Apostles Club where, as we have seen, Keynes chiefly absorbed Moore's philosophy or that part of it which captivated him. This was a small select and secret society of which details have only recently become widely known whose formal title was The Society or the Cambridge Conversationary Society. Founded in 1820, it had been shaped towards intellectual distinction in its early years such as Frederick, Dennis and Morris, perhaps the leading English theologian of the last century, but it had become agnostic and definitely anti-Christian. It met every Saturday evening in term for dinner, a paper and discussion. Moore, addressing the situation of a godless universe, set out to produce a moral philosophy that, in fact, supported conventional morality on a better basis than that of hedonistic utilitarianism. He thought of himself as pioneering a new path in moral philosophy by regarding the primary questions, not as what ought I to do, but what is good, as we have seen. Once that is established, the virtues then become a means of good and they must be pursued by proportionate reasoning. Keynes, in my early beliefs, does not bring out explicitly enough that there were three strands in Moore's thought which are intellectually separable. It is possible to hold any one or two of them without holding all three. First, good is a simple, unanalyzable concept. Decisions as to what is good depend on direct intuition in particular cases. This has continued to engage the interests of moral philosophers as a thesis in the logic of ethics. I doubt whether many now agree with it. It did not greatly interest Keynes and me not concern us. Two, ethical pluralism, not just a concentration on pleasure as with the classical utilitarians. By far the most valuable goods, as already mentioned in Moore's thought, are the pleasures of human intercourse and the enjoyment of beautiful objects which point to the life of passionate contemplation and communion. Three, where ethics is in relation to public conduct is concerned, Moore was an ideal utilitarian. Maintaining the rightness of an act derives from its consequences in producing the most good as against the hedonistic utilitarianism of Jeremy Bentham, John Stuart Mill and Henry Sidgwick. Moore rejected the hedonism but retained the consequentialism. In his view, the best achievable states of affairs were bound to be complex hopes and in many cases would be the product of following conventional morality. Keynes may have been partly teasing when in my early beliefs he says they were immoralists. True, at Cambridge they ignored the third element in Moore's teaching. Like many young and not only young intellectuals, they universalized their emotional needs in the guise of rational philosophy. But subsequently, many of them took up public causes in the spirit of classical consequentialist utilitarianism in which they had been reared and in practice it often led them to support the cause of the underdog even if in a paternalistic fashion. Certainly this was the case with Keynes himself. He was no immoralist. Indeed, in my early beliefs he does in fact give illustrations of ethical issues discussed by the apostles even if of a somewhat bizarre kind in which estimates of the relative value of the consequences of different answers were involved in resolving them. What he is particularly concerned with is the excessive weight given to economic criteria. And as we shall see, all his life he held that although considerable stress on these was a regrettable but necessary stage in economic development it was one for which he expected the need to be outgrown in a century or a little more. Furthermore, the claim of the apostles not to be bound by a general rule but to judge each case on its merits is one aspect of a consequentialist ethic. There has recently been a vigorous discussion of this within Christian ethics in what is known as the situation ethics debate. There is no general ethical position which does not have difficulties in that very awkward questions can be posited for it to resolve. But it is in no sense an immoralist position. Nor is it necessarily connected with an optimistic understanding of human goodness and rationality. Keynes' subsequent change to what is a more realistic and a more Christian position did not involve any change in the consequentialist character of his method in making specific moral judgments. An example of his later recipients is his analysis of the ineffectiveness of Woodrow Wilson at the Paris Peace Conference of 1919. Keynes portrays him as two principles, two conscientious. His Presbyterian temperament became dangerous. Keynes says with a touch of mischief that his attitude to his famous 14 peace points was akin to the verbal inspiration his forefathers ascribed to the Pentateuch. In order to preserve them and his conscience intact the president deceived himself by agreeing to suffer trees which kept the form of the points but undermined their reality. Keynes says he had the theologian's capacity for self-deception. This revealing aside shows the prejudice Keynes harbored against the Christian faith for the capacity for self-deception is notoriously not confined to theologians. Perhaps at the back of his mind the plausible thought that theologians ought to be most aware of the danger of it when in fact they frequently held their position with a cock-shawness which blinded them to it. Keynes' basic perception of Wilson however shows a power of modern analysis worthy of Rhino Libor. But like Libor he set it in the context of a larger hope. He wanted his book on the Paris peace conference in which it occurs to set in motion what he describes as moral forces of instruction and imagination which change opinion. The assertion of truth the unveiling of illusion the dissipation of hate the enlargement and instruction of men's hearts and minds must be the means. However unlike Libor he did not see the necessity of harnessing power to interest in order to achieve a more just society nationally and internationally. And to do this under the scrutiny of a transcendent source of judgment such as the Christian understanding of the kingdom of God provides which and this sets all interests within the larger perspective of the common good and puts a question mark against utopian hopes of completely fulfilling in a future historical order the vision which calls out our loyalty. Keynes was to some extent alert to this point Burke's political philosophy influenced him to the extent of making him wary of deliberately creating evils in the present on account of the alleged future social benefits that would ensue a cautionary attitude because our powers of prediction are so slight. He thought Burke went too far in defense of existing property arrangements but he was never tempted by the Marxist willingness to intensify present ills as the means to future utopia. Keynes was exceedingly able self-confident to the point of arrogance and often ruthless. He never lost his belief that stupidity and ignorance are the chief villains that ultimately reason triumphs and that social problems need to be solved by the application of intelligence. He remained a rationalist bristling with indignation at stupidity and prejudice but still confident that an enlightened management of the economy by a popularly elected government would be possible and that an intellectual elite would be able to wear down prejudice and to persuade sufficient of the electorate by rational arguments and that management would be in the hands of a similar elite of high civil servants such as he had met in the India office from 1906 to 1908. This did not prevent him from expressing exasperation from time to time as when he wrote to T.S. Eliot in 1945 concerning full employment that insufficiency of cleverness not of goodness is the main trouble. He never fully faced the corruptions to which the intelligent are liable even if he did begin to appreciate the truth expressed in the term original sin with respect to human beings in general. Turning now to specific examples of Keynes' ethical stances and their significance for us I mentioned three that which you consider. One, his view of laissez-faire and its place in his hopes for the economic future of humanity. Two, his view of the relation of economics to ethics and three, the attitude required of human beings who have to live with inherent problems of uncertainty about the future in making economic decisions. But first of all, something about an issue of personal ethics needs to be said. It is clear that the use made by the apostles of Moore's ethics was much conditioned by their cultural and social position as privileged intellectuals in a stable society and was not nearly so universal and culture free as they imagined. In particular, it was affected by the predisposition of several of them to homosexuality. Keynes himself was a bisexual. He had several homosexual relationships, some of them transient, the most prolonged with the painter Duncan Grant. Later, he was happily married to Lydia Lopakova of the Deagalith Ballet whom he married in the St. Pancras Registry office in 1925 and who was to prove a tremendous strength to him, especially after his first heart attack in 1937. It has been claimed that his homosexual expression of his bisexuality had much to do with his reformist tendencies. But this is doubtful. It was certainly a major element in the reaction of the apostles to Victorian conventions, restraints and hypocrisy, particularly in the wake of the Oscar Wilde case. Indeed, it is only within the last three decades that homosexuality has become widely discussed and within limits accepted. And that we are aware of both how much more we know about it and how much we do not yet know about it. Because it was underplayed in Harrod's life of Keynes, there is the temptation now that it has come into the open to assume it must have an overall significance not as the perspective of everything in Keynes' life. This, I think, is a mistake. Just as it seems that homosexuality spans the whole range of human characters and has not any other traits which are particularly associated with it, so in the case of Keynes, his homosexual expressions of his bisexuality do not seem to have any special place among the social and intellectual sources of his other ethical stances. Therefore, I do not propose to say anything more on the matter. I turn to his attitude to laissez-faire. Keynes' objection to it was both practical and ethical. Practically, he claimed to show that it did not necessarily work. There has been an immense discussion of his analyses, particularly since the publication of the General Theory of Employment, Interest and Money in 1936. Was his challenge to economic policy or, more radically, to economic theory? He set out to demonstrate that the laissez-faire economy does not contain an automatic mechanism for the reconciling of conflicting interests. Instead, a chronic lack of effective demand can lead to an equilibrium well below the level of full employment. The pursuit of private profit does not necessarily lead to public benefit. And in particular, private virtue in the shape of saving or thrift can be a public vice, the occasion of insufficient investment and lack of demand. To correct this, there could be no escape from political judgments rather than the monetarist's preference for a neutral regulator of the economy. This evades, by reliance on an impersonal mechanism, the problem of political choices. Government action is needed to shift the economy out of its under-employment and keep it out. I must leave it to professional economists to evaluate Cain's technical and practical criticisms of the laissez-faire economy and whether he can solve the problem he pinpointed. My concern is with his ethical criticism, which was associated with it. Cain's made a sharp distinction between the immediate and the longer-term future. For the present, he saw the need for a mixed economy with some redistribution of wealth as a condition of economic progress or growth and not an obstacle to it. Capitalism is unnecessarily evil for the moment. It delivers goods and services reasonably efficiently. It is capable of considerable reforms without affecting its basic performance. It channels potentially disruptive energies into relatively less harmful channels connected with money-making and money-loving. And it accumulates capital without which it is impossible to solve the economic problem. In many ways, it is extremely objectionable, but it is more efficient for advancing economic ends than any other system in sight. So much for Cain's short-term view. The longer-term one is very different. In his essay, The End of Laissez-faire, he shows how the ethics and philosophy underlying its individualism draws upon diverse sources. The conservative individualism of Locke and Hume, the democratic egalitarianism of Rousseau and Bentham, a Darwinism which found competition in nature, and theories propounded by economists who were helped by the incompetence and corruption of 18th-century governments and the undeniable material progress of the 19th century. Then he goes on to say, it is not true that individuals possess a prescriptive natural liberty to their economic actions. There is no compact conferring perpetual rights on those who have and those who acquire. The world is not so governed from above that private and social interests always coincide. It is not so managed here below that in practice they do coincide. It is not a correct deduction from the principles of economics that enlighten self-interest always operates in the public interest. In the medium term, Cain says it is needful to move out of the 19th-century Laissez-faire into an era of liberal socialism. In the general theory, he makes it clear that by this he does not mean a widespread state socialism but controls to establish an aggregate volume of output to correspond as nearly as possible to full employment, involving a corporate decision as an organized community to achieve a common purpose. This will be the environment for the free play of economic forces to achieve the full potentialities of production, including the advantages of decentralization and the play of self-interest. This individualism is the best guarantee of personal liberty and human variety. In the class war, he will be on the side of the educated bourgeoisie. At the same time, his aim was the gradual euthanasia of the rentier, that functionless investor, as capital is deprived of its scarcity value within one or two generations. This thought leads to a remarkable optimism of the essay economic possibilities for our grandchildren. Assuming that there are no important wars and no important increases in population, assumptions falsified, of course, since 1931, Cain says the economic problem may be in sight of solution within a hundred years, and then humanity will be faced with its real and permanent problem, how to use its freedom from pressing economic cares to live wisely, agreeably, and well. There will be great changes in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have long haggred in us for 200 years, by which we have exalted some of the most distasteful of human qualities, such as the love of money as a possession, into the position of highest virtue. He goes on to say, I see us free, therefore, to return to some of the most sure and certain principles of religion and traditional virtue, that avarice is a vice, that the exacting of usury is a misdemeanor, and the love of money is detestable, that those who walk most truly in the path of virtue and sane wisdom who take least thought for the moral. Yet, for at least another hundred years, we must pretend to ourselves that fair is foul and foul is fair, for foul is useful and fair is not. Avarice and usury and precaution must be our goal for a little longer, for only they can lead us out of the turmoil of economic necessity into daylight. This vision is astonishingly like Marx's picture of communist society, except that Marx did not see that there would be any human problem in it, because men and women would apparently live in a state of continuous harmony and goodwill. Keynes does think there will still be a problem of how to live wisely, agreeably, and well. But even leaving aside his already falsified assumptions, is there not an unreality in his vision? Since human wants our relative to possibilities, is it conceivable that in any future we can at present think of, let alone that of our grandchildren, we shall reach a state where there are no relatively scarce economic resources of alternative uses, the allocation of which is our basic economic problem? Further, is it not ethically naive to say that we must give so much scope to ethical attitudes and motives which we think unsavory until we have solved our basic economic problem, after which we will abandon them and take up virtue? It reminds me of a similar attitude taken by many in the last world war. We must abandon all moral scruples in order to defeat a monstrously evil enemy. There will be no holds barred. Everything will be permitted. Then when victory is won, we will pick up again our traditional moral code, perhaps our Christian ethic, and build a new and morally better world. Such an attitude forgets that the means used to achieve an end may so corrupt the process that it renders the end impossible of achievement. And it was this attitude among the allies in the war which led to their policy of unconditional surrender and the peace settlement with unsatisfactory features from which Europe and indeed the world is still suffering. Many of the attitudes to which Cain's refers are indeed distasteful, some radically so. Others are necessary aspects of the human situation. For example, self and family love which need harnessing by social institutions towards achieving a common good. We need social institutions which allow them scope whilst maximizing their potentiality for good and minimizing their potentiality for harm. And this requires political wisdom. And it needs continual exercise as institutions are shaped, refined, create new problems and are further refined. Cain's is quite right that the theory of laissez-faire abandons the problem and naively leaves it to the spontaneous operation of the market. What he wanted for the immediate future, market forces operating in a more sophisticated social framework is persuasive. However, he blackens economic morality too much. Maybe the unworldiness of Moore's ethic betrayed him. That, together with his elitist background, left him with an aesthetic distaste for the processes of economic life even as he exploited them successfully himself. He made huge sums of money for his college at Cambridge, King's, and for himself and spent a lot on the arts and on other good causes. To my mind, his economic vision for us could be better expressed in the resolution to remove primary poverty from the third world in one generation, which the rich two-thirds world could do if it would. In another essay in Persuasion, Cain says that the political problem is threefold. One, to secure economic efficiency and this needs technical knowledge. Two, to achieve social justice and this needs an unselfish and enthusiastic spirit which loves the ordinary man. Three, to respect individual liberty. This requires tolerance and appreciation of the excellence of variety and independence and readiness to give an unhindered opportunity to the exceptional and aspiring. This last remark gives too much scope for a meritocratic society which would be an exceedingly unpleasant one. It is one thing to give scope to exceptional talent but to say it must be unhindered obscures the common humanity of the gifted and the less gifted as the basis of citizenship. Apart from this, we can surely accept Cain's formulation of the political problem. How it is to be solved involves policies derived from a mixture of technical economic analysis, social and political diagnosis and ethical evaluation. There is abundant scope for genuine differences of opinion here among those who are agreed with the general aims and also those who are agreed with the need to deal with the challenge of a Hayek who calls the very conception of social justice a mirage. But underlying the political problem is the likelihood that capitalism has been parasitic on a hangover of several pre-capitalist model virtues which it has not itself fostered and indeed tends to undermine. That is why we need to embody fairness, altruism and compassion in economic and social institutions which encourage citizens to behave as if they felt these virtues whether or not at any particular time they do. Within this framework the market can be left to fulfill its function. I turn lastly to the relation of ethics to economics in Cain's thought and to the question of living with uncertainty in making economic decisions. I doubt if Skidelski is right when he says that unlike Marshall economics was not an activity through which Cain's ethical beliefs found expression because he followed Moore who had cut the links between economics and ethics. In fact, I'm sure Skidelski is wrong. In a letter to Harrod in 1938 Cain's argues that economics is essentially a moral science not a pseudo-natural science. It is a branch of logic a way of thinking and progress in it is a science progress in it as a science of thinking is in terms of models combined with an art of choosing models which are relevant to the contemporary world. Good economists are scarce because the gift of choosing good models is a very rare one. Economics employs introspection and judgments of value. On the other hand it requires rigor to see that the conclusions do properly follow from assumptions behind the model. On the other hand motives, expectations and psychological uncertainties are also involved. This double aspect of economics as a science and an art does not seem to be well teased out by Cain's but it does in principle do justice with both modern economics and the older term political economy out of which it grew and which is still in use in a few places. Economics has freed itself from the philosophical utilitarianism out of which it grew and has established theoretical models which can be handled mathematically and which are useful as a heuristic device if they are not mistaken for an adequate model of reality. By this means the economist is able to avoid value judgments and dwell in the value free realm of mathematics except for economic efficiency as an ideal and mathematical elegance in the evaluating models as a subordinate virtue or value. However, he cannot stop there in practice efforts to relate these logical deductions from the models to the actual working of the various economies of the world have to be made and here we are in the realm of political economy. There does seem to be a tendency for mathematical sophistication in economics to increase the more remote it becomes from actuality. Political economy however is full of empirical uncertainties to which I shall short refer which it can never fully resolve and where the selection and waiting of significant facts is affected by value judgments. That is why there are continual policy disagreements among economists. But if the public is apt to get impatient with them economists need to sell themselves better. Keynes had rightly a high view of their significance as witness his famous toast at the dinner of the Council of the Royal Economics Society in 1945 to economists as trustees, not of civilization but of the possibility of civilization. Without their work the possibility of the various things which Moore had taught him to think of as self evidently good and which he himself cultivated all his life would be hardly available not even for the elite which he represented still less for the wider community which he hoped within a century would share in them. As we have seen Keynes took an adverse view of the ethics of the free market as something to be tolerated for a while longer until it has brought us to a level of productivity of goods and services when it will no longer be needed. In my view this is too negative and too transitory a view. I think the free market is best viewed as a technical device to serve the human purpose of maximizing what can be produced by the allocation of relatively scarce resources with alternative uses in so far as human beings want to pursue that aim compared with other social aims. It has potential moral dangers which require it to be put in a strong social and political institutional framework which is a matter of political decision. At the same time a greater realism is needed as to how far away in practice free market economists are from maximizing their productivity by bending to special interests and disguising the economic costs of doing so. Moreover efforts to counter Keynes' ethical criticism of the free market by giving it a favorable moral status underplay the organic and interdependent nature of human society and the damage to this that can be done by great social and economic inequalities. Society is temporarily prior to the individual person who is molded by it from infancy and in so far as its institutions are inhumane and unjust persons are thwarted by it in growing to maturity. Yet that same person transcends society and when adult can challenge its institutional structures in the name of a greater justice and humanity. Turretian efficiency is consistent with gross inequalities. At the most arguments deriving from it support some system of property rights rather than the common ownership of everything that is to say a free market set within the framework of a redistributive system of income and wealth taxes and this is what Keynes came to advocate in the long run a better distribution of demand rather than an increased aggregate of demand. The other ethical issue which Keynes' thought raises in connection with economics is that of living with uncertainty, error and ignorance. Models in classical economics presuppose among other things perfect foresight. Hence rational expectation can be the basis of decision making. Rational expectation is the most important underlying difference between the conditions the theory assumes and those which exist in fact. For instance the Quantity Theory of Money to which Keynes came to be opposed assumes an identity in a fundamentally stable and decentralized economy but in fact hides unproven assumptions about the significance and behavior of each of the four components and so is unusable for policy advice. Keynes was primarily a mathematician by training. He only had eight weeks instruction in economics in the whole of his life. He was primarily a mathematician by training who worked for years on probability theory in mathematical logic. As Frank Knight pointed out in his classic work in 1921, risk is an actuarial matter, uncertainty is not. Probability statements involve judgments on the bearing of evidence on conclusions not the forecasting of results. In the general theory Keynes stresses uncertain knowledge with regard to matters where decision and action is necessary and yet on which there is no scientific basis on which to form any calculable probability. Uncertainty is particularly important in the case of investment, a central feature of his analysis. And he says that an entrepreneur's decision to invest depends largely on his level of animal spirits. I take it that economics has to cope with uncertainty, error and ignorance for three reasons. One, it has no accepted laws as to how the economy actually works. It can establish trends but it cannot be sure that they will hold in particular instances. For example, in the early 1970s the rate of inflation in the United Kingdom was such that the real rate of interest on saving was in fact negative. But contrary to all expectations the rate of saving showed a significant increase. Two, even if models of how the economy actually works are identical between economists different assumptions can be fed into forecasting for example, on the state of world trade government policy the rate of obsolescence of new inventions or what will be the rate of interest a decade ahead. Three, economists have to begin by some analysis of the immediate past and it is a considerable time before they know whether they were right. Complex empirical investigations never quite catch up. For these reasons, decisions in the real world are made on the basis of gas work, uncertainty and conventional assumptions. The economist who has most stressed this is G.L.S. Shackle in his insistence that choice takes place in the face of vague, uncertain and shifting expectations, hopes and fears. He refers to the irreducible uncertainty arising from the ultimate impossibility of men ever knowing whether or not in any particular case they have all the relevant information. Now, living with uncertainty requires considerable moral and spiritual resources. At worst, it can be frenetic. The animal spirits to which Cain's refers can produce the atmosphere of a casino and expose what Edward Heath called the unacceptable face of capitalism. On the other hand, it can be paralyzing. It could be creative and liberating. I think institutional controls are needed to keep these phenomena within bounds but that is not my main concern. For living with uncertainty is an inescapable feature of human life. It is in how they set about this that human beings show their best qualities and their worst. Basically, we all need to draw upon the sources which set us free to live creatively towards the uncertain future. The Pauline phrase is the Pauline phrase is to walk by faith and not by sight. I quote this because I think the Judeo-Christian tradition whose foundation Cain's assumed to be exploded has much to offer at this point for it applies as much to ethical decision making as it does to basic doctrinal attitudes. I understand why in the context the young Cain's dismiss the Christian tradition so completely at the age of 17 or 18. Much theology bumbled badly in coping with new intellectual outlooks of the 19th century. One can see how many young, confident intellectuals became the culture of despisers of religion to whom Schleyer Marker had addressed himself at the turn of the century as did Bishop Joseph Butler in the 18th century. Butler, in the preface to his analogy of religion, writes it is come, I know not how, to be taken for granted by many persons that Christianity is not so much a subject of inquiry but that it is now at length discovered to be fictitious. And accordingly they treated as if in the present age this were an agreed point among all people of discernment and nothing remained but to set it up as a principal subject of mirth and ridicule as it were by way of reprisals for it's having so long interrupted the pleasures of the world. That comes pretty close to the attitude of the apostles in Cain's. One would have hoped that someone as clever and with as wide simplicity as Cain's would have probed more deeply. Is there not a touch of intellectual and spiritual arrogance in those who refuse to do so? In my experience, scientists including economists have been prone to this dismissive arrogance. Everyone works at bottom with a faith in the sense of some fundamental presuppositions about humans and their place in the universe on which they build and behind which they cannot go. As we have seen, Cain's realized this. Butler in his preface goes on to say that any reasonable man who will thoroughly consider the matter may be as much assured as he is of his own being that it is not however so clear a case that there is nothing in Christianity. There is, I think, strong evidence of its truth but it is certain no one can on principles of reason be satisfied to the contrary. Because life's evidence is ambiguous a choice of faith has to be made and in this sense agnosticism and atheism are also faiths. Cain's thought true belief to be important. He feared that our age has lost the possibility of believing in having true beliefs. I am sorry Cain's did not give the Judeo-Christian tradition more attention because I think it makes more sense of more facts than any other. It is hard to imagine Cain's totally outside it for he had absorbed much from it. At its best it is the best foundation for what he strove for all his life. Concerned for the good of human persons at the widest scale and for social and economic conditions which allow them to pursue the good as they perceive it. It might have sustained him and he might have made a direct contribution to it had he been explicitly inside it. Thank you very much, Professor Preston for that very insightful and penetrating presentation. We will break the program at this time to reconvene for the seventh lecture at 3.30 a preload to commence at 3.20. Thank you.