Journal of Libertarian Studies

Keynes and Plato

Journal of Libertarian Studies

ABSTRACT:  The central thesis of this article is that Plato’s philosophy is the foundation of Keynesian economics. First, Plato’s philosophy and his socialism are discussed and it is shown that Keynes was a disciple of his. Next, evidence is presented to show that Keynes advocated a brand of socialism that was virtually identical to Plato’s. Finally, the paper demonstrates the Platonic structure of Keynesian economics.

KEYWORDS: socialism, Plato, John Maynard Keynes


It is impossible to completely understand John Maynard Keynes (1883–1946) and his economics without understanding his early philosophical beliefs. His main intellectual interest as a young man was philosophy, not economics. And later, when he turned to economics, he developed Keynesian economics along the lines of his early philosophical beliefs. Robert Skidelsky (2009, 56) agrees that “his economic work was philosophically inspired.” Thus, as Rod O’Donnell (1996, 214) observes, “to understand Keynes’s economics fully, we must first take a step backwards and come to grips with his philosophy.”

Conventional accounts of Keynes’s intellectual development emphasize the role of his ethical master George Edward Moore (1873–1958). However, ethics is only one branch of philosophy, and any ethical theory must rest on the more fundamental branches of metaphysics and epistemology. Unfortunately, scholars have almost totally neglected these areas of Keynes’s thought. No doubt, this neglect has been convenient for his defenders. The protectors of the Keynesian faith are desperate to portray Keynes as one of history’s great liberals (Harrod 1951, 192; Skidelsky 1992, xv; 2009, 157). But his metaphysical and epistemological thought is totally incompatible with liberalism. In metaphysics and epistemology, Keynes’s master was the father of socialism: Plato (c. 428–347 BC). Those desperate to associate Keynes with liberalism have overblown Moore’s influence at the expense of Plato’s.

The central thesis of this article is that Plato’s philosophy is the foundation of Keynesian economics. The following section discusses Plato’s metaphysics, epistemology, and political philosophy. Section 2 provides evidence that Keynes was deeply influenced by Plato and adopted his metaphysics and epistemology. Section 3 examines the many similarities between Plato’s and Keynes’s political philosophies. Finally, section 4 illustrates the Platonism inherent in Keynesian economics through a reductio ad absurdum.


Before Plato, the Greek philosopher Heraclitus (f. 504 BC) argued that humankind lives in a world of constant change. As Heraclitus exclaimed, “Everything is in flux and nothing is at rest” (Plato, Cratylus 402a). Although it may appear that something exists in an unchanging state, this is just a trick played on the mind by the unreliable senses. Given that everything is constantly changing, Heraclitus concluded that nothing can truly exist. But if everything is constantly changing, if nothing truly exists, then it is impossible to have any objective knowledge about reality. After all, it is impossible to know that which does not exist. As Karl Popper writes, “If all things are in continuous flux, then it is impossible to say anything definite about them. We can have no real knowledge of them” (Popper 1945, 23; Guthrie 1975, 32). Heraclitus’s theory of flux made him the father of the Sophists, the Greek philosophers who argued that it is impossible to have any objective knowledge of reality.

Plato’s goal was to refute the Sophists. He wanted to show that it is possible for human beings to have objective knowledge about reality. Of course, Plato could not deny that things change in this world. But to show that objective knowledge is possible, he felt compelled to show that there are some things that do not change.

Taking a cue from the Pythagoreans, Plato’s solution was to argue that there are two different realities. He posits “two kinds of existences, the visible and the invisible” (Phaedo 79a). The visible reality in which human beings live is Heraclitus’s world of flux. Beyond this visible and changing reality, there is an invisible reality that is completely devoid of change. This invisible and unchanging reality is Plato’s famous world of Forms. As Plato writes:

[The world of Forms] keeps its own form unchangingly, which has not been brought into being and is not destroyed, which neither receives into itself anything else from anywhere else, nor itself enters into anything else anywhere, is one thing. It is invisible—it cannot be perceived by the senses at all—and it is the role of understanding to study it. [The visible world] is that which shares the other’s name and resembles it. This thing can be perceived by the senses, and it has been begotten. It is constantly borne along, now coming to be in a certain place and then perishing out of it. (Timaeus 52a)1

W. T. Jones summarizes Plato’s theory of two realities as follows:

According to Plato, reality is not exhausted by the world of sense perception. This world of sense perception is the world of physical objects in space and time; but besides this world, different from it but standing in intimate relation to it, is another world—nonphysical, nonspatial, nontemporal. This world Plato called the world of [Forms]….Plato believed that there is a world of Forms, over and beyond the sensible world, and that these forms are nonphysical, nonspatial, and nontemporal, yet very real. (Jones 1952, 103–04; Copleston [1946] 1993, 166; Guthrie 1975, 14, 330)

Plato maintained that it is impossible to obtain objective knowledge about the visible world. However, to Plato it is possible to have objective knowledge about the world of Forms. In fact, all objective knowledge is knowledge of the world of Forms (Copleston [1946] 1993, 149; Jones 1952, 105). This means that the world of Forms is the higher, truer reality. The visible reality in which humans live is merely a poor copy, or distorted reflection, of the perfect and immutable world of Forms.

Plato’s metaphysical theory of two realities created an epistemological problem: How do human beings, confined to this lower reality, acquire knowledge from the higher world of Forms? Enter Plato’s theory of the soul, or psychology. Plato argued that the soul exists in the world of Forms prior to birth:

If those realities we are always talking about exist, the Beautiful and the Good and all that kind of reality, and we refer all the things we perceive to that reality, discovering that it existed before and is ours, and we compare these things with it, then, just as they exist, so our soul must exist before we are born. (Phaedo 76d–e)

Since the soul existed in the true reality before birth, it contains all of the objective knowledge from the world of Forms. In contrast to Aristotle, who argued that the human mind is a blank slate (tabula rasa) at birth, Plato argued that human beings are born with innate knowledge from the world of Forms.

Again, Plato is faced with an epistemological problem: Why do most humans seem incapable of accessing the soul’s objective knowledge from the world of Forms? Plato’s solution is his theory of recollection. He argues that the process of being born into this reality causes humans to forget the soul’s objective knowledge from the world of Forms. To Plato, acquiring knowledge, or learning, involves remembering the knowledge we possessed while the soul existed in the world of Forms: “For us learning is no other than remembering. According to this, we must at some previous time have learned what we now remember. This is possible only if our soul existed somewhere before it took on this human shape” (Phaedo 72e–73a; Meno 81c–e). Clearly, Plato’s metaphysics requires his epistemology, and vice versa. Metaphysically, there are two realities, and epistemologically, learning in the lower reality means remembering objective knowledge from the higher reality. Frederick Copleston writes on Plato’s remembrance theory:

The [Forms] exist in their heaven….Plato’s way of speaking about the…[Forms] clearly supposes that they exist in a sphere apart [from the world of Forms]. Thus in the Phaedo he teaches that the soul existed before its union with the body in a transcendental realm, where it beheld the subsistent intelligible entities or [Forms]….The process of knowledge, or getting to know, consists essentially in recollection, in remembering the [Forms] which the soul once beheld clearly in its state of pre-existence. ([1946] 1993, 166; Guthrie 1975, 249, 329, 426)

The soul is Plato’s indispensable link between his metaphysics and epistemology. According to Plato, the soul consists of three parts (Republic 435b–42d; Phaedrus 246a–b; Copleston [1946] 1993, 208–10).2 The first part of the soul is the appetitive soul. This is the lowest part of the soul, and it drives the human desire for food, shelter, wealth, and the like. The second part of the soul is the spirited soul. It is the middle part of the soul, and it is driven by the passions or emotions. The spirited soul impels human beings to power and glory. Finally, the highest part of the soul is the rational soul, and it is driven by reason. According to Plato, every soul contains all three parts: appetitive, spirited, and rational. Importantly, however, the three parts are not equal in every person. One part of the soul tends to dominate each person. In most people the appetitive soul dominates, in some the spirited soul dominates, and in special cases the rational soul dominates.

Plato divides society into three separate classes: the producers at the bottom, the auxiliaries in the middle, and the guardians at the top. These three classes correspond to the three-part soul (Republic 441c; Jones 1952, 136–39). The producers are dominated by the appetitive soul, and the money motive is their defining characteristic. Just as the appetitive part of the soul is the lowest part of the soul, the producers are the detestable, money-motivated class at the bottom of society. The auxiliaries are the soldiers, and they are governed primarily by the spirited soul. Finally, the guardians are the philosophers. The guardians are the blessed class, the class whose souls are ruled by reason. Unfortunately, most human beings are dominated by the appetitive soul, and only a special few are dominated by the rational soul. Hence, most members of society are in the depraved producer class, while the blessed guardian class contains only a small number of natural elites (Republic 428e).

Plato’s division of society into three classes is the key to his politics. Based on his class theory, Plato holds that a nonviolent, spontaneous order is impossible. Since the masses, or producers, are dominated by the appetitive soul, social order must be imposed with systematic government violence.3 Moreover, the depravity of the masses means that they must be barred from participation in politics; democracy is out of the question:

A mass of any people whatsoever would never be able to acquire this sort of expert knowledge and so govern a city with intelligence…we must look for that one constitution, the correct one, in relation to a small element in the population, few in number, or even a single individual. (Statesman 297b–c; Jones 1952, 146–47)4

Naturally, Plato insists that the ruler must come from his own class, the guardians. Why? The producers are almost totally removed from the world of Forms. Consequently, they have no real objective knowledge of reality. The auxiliaries are superior to the money-motivated producers, but they are also too far removed from the world of Forms to rule. Only the guardians have an intimate connection with the world of Forms; only the philosophers have objective knowledge of what is true and good (Republic 476d–80a). Thus, Plato famously advocates the rule of the philosopher-king:

Until philosophers rule as kings or those who are now called kings and leading men genuinely and adequately philosophize, that is, until political power and philosophy entirely coincide, while the many natures who at present pursue either one exclusively are forcibly prevented from doing so, cities will have no rest from evils, Glaucon, nor, I think, will the human race. (Republic 473c–d)

What kind of economic system must the guardians impose? Plato’s ideal republic is a socialist, or communist, republic.5 As Copleston writes, “Plato expressly clings to communism as an ideal” ([1946] 1993, 235; Popper 1945, 40–41). Goldsworthy Lowes Dickinson, one of Keynes’s mentors, admits, “[Plato] was, in fact, a communist” (1931, 80; [1896] 1911, 96). Plato advocated a communist republic ruled by an elite philosopher-king.

Many interpreters attempt to moderate Plato by insisting that he only advocated communism for the guardians and auxiliaries. For example, Dickinson argues, “The communism of Plato…applied only to the guardians and soldiers, and not to the productive class on whom they depended” ([1896] 1911, 99). On the contrary, Plato advocates communism for all:

You’ll find the ideal society and state, and the best code of laws, where the old saying “friends’ property is genuinely shared” is put into practice as widely as possible throughout the entire state….[I]n such a state the notion of “private property” will have been by hook or by crook completely eliminated from life. Everything possible will have been done to throw into a sort of common pool even what is by nature “my own.” (Laws 739c, 877d–e; Republic 423e–24a)

Certainly, it would be impossible for the guardians and auxiliaries to live in communism without imposing socialism on the producers as well. The guardians and auxiliaries do not produce any goods, let alone the basic goods required for survival. To survive, the guardians would have to systematically pilfer goods and services from the producers. This would require the use of systematic government violence against the producers and their property.6 Moreover, the guardians would have to exercise significant, if not complete, control over production. The guardians and auxiliaries require certain goods to rule the city-state and wage war, and the guardians would have to force producers to produce those goods in the right quantity and quality at specified times. In turn, this would require the guardians to control key raw materials and capital goods.

Socialism is defined as government control of production (Schumpeter [1942] 2006, 167). Undoubtedly, Plato’s ideal society would require extensive government control over production. As Jones writes, “Interference, or intervention, by the state is necessary, Plato held, in every aspect of life….[A]ll would be controlled and regulated from above” (1952, 149–50). And since people can only consume what is produced, government control of production also gives it control of consumption. In the end, Plato’s ideal republic would be a full-blown socialist republic.

All brands of socialism require government control over the size of the population. As Ludwig von Mises writes, “Without coercive regulation of the growth of population, a socialist community is inconceivable. A socialist community must be in a position to prevent the size of the population from mounting above or falling below certain definite limits” ([1922] 1981, 175). Like every consistent socialist, Plato advocates totalitarian controls on the size of the population:

[The guardians’] aim will be to keep the number of males as stable as they can, taking into account war, disease, and similar factors, so that the city will, as far as possible, become neither too big nor too small….And then, as the children are born, they’ll be taken over by the [government] officials appointed for the purpose…[T]hey’ll take the children of good parents to the nurses in charge of the rearing pen situated in a separate part of the city, but the children of inferior parents, or any child of the others that is born defective, they’ll hide in a secret and unknown place, as is appropriate….A woman is to bear children for the city from the age of twenty to the age of forty, a man from the time that he passes his peak as a runner until he reaches fifty-five. (Republic 460a–e)

In addition to the size of the population, Plato advocates government control over its quality. He holds that government must prohibit individuals from procreating with members of other classes: “The intermixing of [producers] with [auxiliaries] and [producers] with [guardians] that results will engender lack of likeness and unharmonious inequality” (Republic 546e–547a). He even recommends killing inferior children to promote the quality of the human race: “The best men must have sex with the best women as frequently as possible, while the opposite is true of the most inferior men and women…[I]f our herd is to be of the highest possible quality, the former’s offspring must be reared but not the latter’s” (Republic 459d; Adam [1902] 2010, 357–60; Popper 1945, 44). In short, Plato was an early father of eugenics (Taylor [1926] 1955, 275; Copleston [1946] 1993, 229).

Plato was a sexist who held that women are inferior to men.7 He proclaims, “Do you know of anything practiced by human beings in which the male sex isn’t superior to the female in all these ways?…It’s true that one sex is much superior to the other in pretty well everything….In every way of life women are inferior to men” (Republic 455c–d, 388a, 431c, 557c, 563b, 605e). Plato’s sexism tainted his politics. As Dickinson notes, “Woman, in fact, was regarded as a means, not as an end; and was treated in a manner consonant with this view” ([1896] 1911, 169). Plato endorses common ownership, or communism, in women: “All these women are to belong in common to all the men…[N]one are to live privately with any man…[T]he children, too, are to be possessed in common, so that no parent will know his own offspring or any child his parent” (Republic 457d, 423e–24a).

Like all socialists, Plato despised money and the money, or profit, motive. For Plato, the love of money is detestable, and the producers “are by nature most insatiable for money” (Republic 442a). Plato wants individuals to remove themselves from earthly life and live in contemplation of the world of Forms (Phaedo 65a–66a). The money motive distracts the soul and prevents the producer from contemplating the higher reality: “The [producer] types pull the constitution towards money-making and the acquisition of land, houses, gold, and silver, while both the [guardians and auxiliaries]—not being poor, but by nature rich or rich in their souls—lead the constitution towards virtue” (Republic 547b). For guardians and auxiliaries, “it is unlawful to touch or handle gold or silver” (Republic 417a). He wanted to outlaw the producers from hoarding gold and silver: “No private person shall be allowed to possess any gold or silver, but only coinage for day-to-day dealings” (Laws 742a). Scorn for money and the profit motive has been a hallmark of socialist thought since Plato.

Plato’s ideal republic is a socialist republic ruled by a totalitarian dictator. As Popper (1945, 149) stresses, “Plato’s political programme is purely totalitarian.” Mises agrees: “Plato…elaborated a plan of totalitarianism” (1962, 120, 85–86).8 And how did Plato justify the tyranny of the philosopher-king? With his metaphysics and epistemology. To Plato, the human race comprises three fundamentally different species, or animals. Most souls are cursed to domination by the depraved appetitive soul. Given the depravity of the masses, totalitarian socialism must be imposed to establish social order and usher in the utopia. And who must rule the socialist state? Absolute dictatorial power must belong only to the elite philosophers, those blessed few who are dominated by the superior, rational soul. All must submit to the omnipotent philosopher-king, for only he is endowed with the objective knowledge needed to establish the earthly utopia.

A mystic is a person who claims to obtain objective knowledge from a supernatural source. Clearly, Plato was a mystic: “That he was a theist, deeply religious and with more than a touch of mysticism in him, no one would deny” (Guthrie 1978, 33; Dickinson 1931, 76, 194). His metaphysical theory of the world of Forms is a mysticoreligious theory. Even a devoted Platonist such as Alfred E. Taylor ([1926] 1955, 285) must admit that “when the forms are mentioned in a Platonic dialogue, their reality is neither explained nor proved.” Questioning Plato is forbidden, however. Any person with the audacity to question the existence of the supernatural world of Forms must have a defective soul. The chief virtue of the ignorant producer is uncritical obedience to the omniscient philosopher-king.


Although Plato’s influence on Keynes is almost universally neglected, some scholars have hinted at the connection. For example, O’Donnell admits in a footnote, “It is possible to view Keynes’s philosophy as a variety of Platonism” (1989, 345n32). Athol Fitzgibbons acknowledges that “even in the General Theory, there remain suggestive structural similarities between Keynes’s political philosophy and Plato” (1988, 174, 177). Still, sympathetic commentators have been reluctant to explore his Platonism in any detail.

Keynes became a disciple of Plato when he was an undergraduate at King’s College, Cambridge. John P. Hill notes, “There had always been something of a Platonic tradition at Cambridge” (1976, 3). As an undergraduate, Keynes surrounded himself with the Cambridge philosophers George Edward Moore, Goldsworthy Lowes Dickinson, and John M. E. McTaggart. Soon after he arrived at Cambridge in October 1902, Keynes was invited to join Dickinson’s Discussion Society (Skidelsky 1983, 112).9 In early 1903, he attended Moore’s lectures on ethics and McTaggart’s lectures on metaphysics (Keynes 1903a, 1903b). On February 28, 1903, he was “born” into the Cambridge Apostles, a secret society of which Moore, Dickinson, and McTaggart were key members (Moggridge 1992, 66).

Keynes read Moore’s Principia Ethica in October 1903, just after it was published, and he praised it as “a stupendous and entrancing work, the greatest on the subject” (1903c). As Skidelsky says, Moore’s Principia Ethica was “the most important book in [Keynes’s] life” (1983, 119). Unfortunately, Keynes’s defenders have failed to stress Moore’s Platonism.10 Moore’s fellowship dissertation was titled The Metaphysical Basis of Ethics, and he acknowledges, “So far therefore as general philosophical scheme goes, the standpoint here taken up seems to agree most with that of Plato” ([1897] 2011, 14; [1898] 2011, 128). He boasted on August 14, 1898, “I am pleased to believe that this is the most Platonic system of modern times” (1898; Hylton 1990, 137).11

Plato’s influence in Principia Ethica is most apparent in Moore’s definition of the good. For Plato, good is an indefinable Platonic Form, and the soul contains innate, or intuitive, knowledge of the good from the world of Forms (Republic 476a, 507b, 509b, 517b; Phaedo 75d, 77d; Parmenides 130b, 135c). As Taylor writes, “the apprehension of [the good] is strictly ‘incommunicable’ [indefinable]….Either a man possesses it [intuitively] and is himself possessed by it, or he does not, and there is no more to be said” ([1926] 1955, 231, 289; Copleston [1946] 1993, 178, 189). As with all other Platonic Forms, only the philosophers possess objective knowledge of the good: “Most men [are] incapable of knowing the good” (Jones 1952, 146).

Moore was a consequentialist. He argued that we must choose those actions that produce the greatest good. Being a consequentialist, Moore held that “‘good’ is the notion upon which all Ethics depends” ([1902] 1991, 105; 1903, 142). So what is good? Moore built his ethical theory upon Plato’s mystical theory of the good: “if I am asked ‘How is good to be defined?’ my answer is that it cannot be defined, and that is all I have to say about it” (1903, 5). He says, “I deny good to be definable” ([1902] 1991, 13; 1903, 7–8). As Tom Regan explains,

The similarities between Moore’s views and those of Plato’s are unmistakable….[W]hat Moore means when he claims that “Good is indefinable” is barely distinguishable (if distinguishable at all) from what Plato would mean if he said “the Form (or Idea) of Good is indefinable”….Moore explicitly acknowledges the Platonic roots of the metaphysics that grounds his ethical theory. (1991, xxxii)

Like Moore, Keynes was a consequentialist and believed that action must aim at producing the greatest good. And what is good in his view? He writes, “I grant with Moore that good is a simple and indefinable quality which I can only identify by direct inspection [intuition]” (1906a, 2). He claimed to possess “reliable intuitions of the good” (Keynes 1971–89, 10:447; hereafter cited as CW). Following Plato, Keynes held that the good is a mystical Platonic Form only accessible to the special elite: “How amazing to think that we and only we know the rudiments of the true theory of Ethic” (1906b, 123–24). By adopting the Plato-Moore definition of the good, Keynes rooted his ethical theory in Plato’s metaphysics and epistemology.

Keynes’s main philosophical work is A Treatise on Probability. Although it was not published until 1921, A Treatise on Probability was a reworking of his fellowship dissertation. The fundamental ideas contained in the dissertation and A Treatise on Probability can be traced to a paper he read to the Apostles on January 23, 1904, entitled “Ethics in Relation to Conduct” (Keynes 1904a; O’Donnell 1989, 12). On September 27, 1905, he produced his first outline of his dissertation, Principles of Probability. His dissertation was rejected on March 21, 1908, and the revised dissertation was finally accepted on March 16, 1909 (Keynes 1908, 1909).

Keynes’s theory of probability is called the logical theory of probability, and he developed it in opposition to the frequency theory of probability. According to the frequency theory, empirical observation is the only way to gain objective knowledge of probability. For example, consider the probability of rolling a three-spot on a die. In the frequency theory, the probability can only be found by throwing the die a large number of times in the real, visible world. After throwing it many times, the observer counts the number of times a three-spot occurred. This frequency is the probability of throwing a three-spot on a die.

The frequency theory is incompatible with Plato’s philosophy. To Plato, empirical frequencies from the Heraclitian flux can never provide any objective knowledge of probability: “We shall not look for knowledge in sense-perception at all” (Theaetetus 187a; Phaedo 65a–66a). Being a good Platonist, Keynes rejected the frequency theory: “this view of probability upon [empirical] series is certainly false” (1904, 11).12 Instead, he argued that probability is mental, or “purely logical” (1908, 18; CW, 8:4). Just as Plato argued that the mind possesses innate knowledge of Forms, Keynes argued that the mind possesses innate, or intuitive, knowledge of probability. In the case of throwing a three-spot, the probability is determined by mental contemplation of the perfect, eternal die in the world of Forms. On Keynes’s logical theory, probabilities are mystical Platonic Forms that only exist in the mental realm of ideas. At bottom, A Treatise on Probability, Keynes’s philosophical opus, is steeped in Plato. Fitzgibbons agrees:

The abstract Platonic insight which permeates Keynes’s system is a strict division between the mental sphere of pure ideas [Forms] and the real [visible] world of fluctuation and change….Like G.E. Moore [and Plato], Keynes believed that universals [Forms] originate and exist only in the mind….The Platonic metaphysics was conveyed…in the Treatise [on Probability] as the doctrine of rational intuition, which is the central theme of that work. (Fitzgibbons 1991, 130; Gillies 2000, 33)

Keynes also held Platonic views on gender and sexuality. Like Plato, Keynes was a sexist. He wrote to his lover Duncan Grant: “I shall have to give up teaching females after this year. The nervous irritation caused by two hours’ contact with them is intense. I seem to hate every movement of their minds. The minds of the men, even when they are stupid and ugly, never appear to me so repellent” (quoted in Moggridge 1992, 183–84). Skidelsky notes, “women were inferior—in mind and body. Love of young men was, he [Keynes] believed, ethically better than love of women” (Skidelsky 1983, 129; Hession 1984, 40; Deacon 1986, 63–64; Turnbaugh 1987, 28). Like his lover and fellow Platonist Lytton Strachey, Keynes was “a male chauvinist pig” (Levy 2005, xi).13

All agree that Keynes had a short-run philosophy, as conveyed in his famous expression “In the long run we are all dead” (CW, 4:65, 28:62).14 But it has not been emphasized that Keynes’s scorn for the long run reflects his belief in Plato’s metaphysics. The inferior reality in which human beings live is temporal, whereas Plato’s superior world of Forms is nontemporal, or timeless (Jones 1952, 103). Like Plato, Keynes wants human beings to detach themselves from life in the temporal world of past, present, and future. Mental contemplation of the timeless world of Forms is nobler than any possible long-run action taken in the inferior temporal reality. As Keynes put it,

Nothing mattered except states of mind….These states of mind…consisted in timeless, passionate states of contemplation and communion, largely unattached to “before” and “after”….The appropriate subjects of passionate contemplation and communion were a beloved person, beauty and truth, and one’s prime objects in life were love, the creation and enjoyment of aesthetic experience and the pursuit of knowledge….How did we know what states of mind were good? This was a matter of direct inspection, of direct unanalysable intuition [of the world of Forms]. (CW, 10:436–37)

On April 18, 1905, Keynes wrote to Bernard Swithinbank, “I find my chief comfort more and more in Messrs Plato” (1905b, 142). In October, Strachey grumbled to Keynes, “We’ll suffer in an eminent silence, and be Platonists till the day after tomorrow” (1905, 211). Keynes consoled Strachey on February 7, 1906:

My dear, I have been deep in Greek philosophy these last few days, Thales and Pythagoras, Zeno and his lover Parmenides: I am sure your sufferings are only due to this prison world, not the particular circumstances in it. Only when after a thousand existences and a thousand loves we have become purified from Not-Being and are a perfect harmony, we may fly on wings of love into the heaven of Pythagoras and Plato and McTaggart, when there is the comfort of souls. I am sure it must be all true. (1906c, 102)

In this passage, “heaven” is an allusion to Plato’s world of Forms. The reference to “this prison world” reflects Plato’s theory of the soul: there is an inherent conflict between the body and the soul, and the body is a prison that prevents the soul from returning to the heavenly world of Forms. The soul can only escape its earthly existence after “a thousand” reincarnations. The soul can only return to a state of “Being” in Plato’s heaven after going through the wheel of birth and rebirth (Copleston [1946] 1993, 212; Guthrie 1975, 476). Although violently opposed to Christianity, Keynes embraced Plato’s mystic religion.

A Treatise on Probability was an utter failure, and Keynes never wrote another major work on philosophy.15 Still, he always remained a disciple of Plato. In 1938, he gave a speech called “My Early Beliefs” in which he admitted, “I have called [my] faith a religion, and some sort of relation of neo-platonism it surely was” (CW, 10:438). He boasts that he was “brought up…with Plato’s absorption of the good” (10:442). He says of “The Ideal,” the sixth chapter of Moore’s Principia Ethica, “I know no equal to it in the literature since Plato” (10:444). In the summer of 1944, as he traveled to the Bretton Woods conference, he supplemented Friedrich Hayek’s The Road to Serfdom with a new edition of Plato (Skidelsky 2000, 343). In summary, the evidence confirms that Keynes was a committed Platonist through his entire adult life.


Keynes’s political philosophy is virtually identical to Plato’s. However, Plato’s totalitarian socialism has made sympathetic commentators reluctant to admit this reality. Fitzgibbons acknowledges that “Platonic metaphysics…permeates Keynes’s political philosophy” (1991, 131). Still, he is careful to insist that “Keynes rejected Plato’s authoritarian politics” (1988, 174). Skidelsky is the most ardent defender of Keynesianism today, and he notes: “Keynes welcomed the coming to power of a new class of Platonic Guardians” (1992, 224). To protect his master from the bad name of socialism, however, Skidelsky has repeatedly maintained that “Keynes was not a socialist” (1990, 52; 1992, 233; 2000, 478; 2009, 135; Harrod 1951, 333).

But like Plato, Keynes was a socialist. As O’Donnell writes, “Keynes envisaged and espoused a particular form of socialism” and “It is clear, explicit and unambiguous; he used the term socialism to characterise his own views” (1999, 149, 164; 1989, 322; 1992, 781–82). Fitzgibbons admits that “he wanted capitalism to be eventually replaced by a non-Marxist socialism” (1988, 190–91). Still, interpreters who admit Keynes’s socialism tend to hedge their admission by insisting that he advocated a milder form called liberal socialism. For example, Gilles Dostaler says, “he proposed liberal socialism” (2007, 98; Moggridge 1992, 469; Groenewegen 1995, 153; Crotty 2019).16 Contrary to sympathetic commentators, however, the evidence shows that Keynes advocated a brand of socialism that contained nearly all of the totalitarian elements of Plato’s socialism.

Like Plato, Keynes had a class theory. As noted, Plato divides society into three classes: producers, auxiliaries, and guardians. Similarly, Keynes divides the population into three classes: investors, consumers, and government. Whereas the producer is the villain for Plato, the investor is the villain for Keynes: “The weakness of the inducement to invest has been at all times the key to the economic problem” (CW, 7:347–48). It should be stressed that in economic science investment does not refer to financial investment, but real investment. Investment goods are capital goods, or the means of production. Under capitalism, investors are responsible for controlling the means of production. Hence, Keynes’s attack on the investor class bears a close resemblance to Plato’s attack on the producer class.

By 1905, Keynes’s desire to “swindle the investing public” reflected his scorn for private investors (Skidelsky 1983, xxiii). He exclaimed in 1910, “There are still a good many perfect fools amongst our business men [investors]” (Keynes 1910a). In his 1910 lecture series, Company Finance and Stock Exchange, he belittles the accounting and financial tools used by private investors (Keynes 1910b). Keynes’s pessimistic theory of investment was the key to The General Theory (1936). But he had already developed his gloomy theory of investment by 1910: “[Investment] will often depend upon fashion, upon advertisement, or upon purely irrational waves of optimism or, depression” (CW,15:46, 7:162).17 Keynes’s theory of investor psychology reeks of Plato’s theory of producer psychology.

Like Plato, Keynes argued that a spontaneous, nonviolent social order is unworkable. Instead, systematic government violence is the only viable way to organize society. For Keynes, the only solution to the problem of social order is government control, or socialization, of investment: “A somewhat comprehensive socialisation of investment will prove the only means of securing an approximation of full employment” (CW, 7:378, emphasis added). Government control of investment means government control over the means of production. And government control of the means of production is the definition of socialism (Mises [1922] 1981, 505; Friedman 1993, 4). Thus, Keynes was correct when he “avow[ed] himself a socialist” (J. N. Keynes, 1911).

Keynes recommended government control over investment many years before The General Theory. On June 8, 1924, he drafted an outline for a book with the telling title “Prolegomena to a New Socialism.” Here, “Investment of Fixed Capital [is one of the] chief preoccupations of the State” (Keynes 1924a; O’Donnell 1992, 807). Hence, government control of investment, or fixed capital, is central to his new socialism, or “true socialism of the future” (CW, 19:222). Following Plato, the fundamental problem is the investor class’s lack of objective knowledge: “a great deal of money [is] invested by those who ha[ve] no special knowledge” (Keynes 1924b, 313).18 Given the lack of objective knowledge, we need “central regulation of the machine” and “public control of entrepreneurs” (1924c, 150–51).

In September 1925, he traveled to the Soviet Union and preached to the Soviet Politburo. As Leon Trotsky ([1925] 1927, 286) recognized, he called for a transition from capitalism to socialism:

I direct all my mind and attention to the development of new methods and new ideas for effecting the transition from the economic anarchy of the individualistic capitalism which rules today in Western Europe towards a regime which will deliberately aim at controlling and directing economic forces. (CW, 19:439)

Like Plato, he advocated “centralized state control” of society:

I believe that there are many other matters, left hitherto to individuals or to chance, which must become in future the subject of deliberate state policy and centralised state control. Let me mention two—(1) the size and quality of the population and (2) the magnitude and direction of employment of the new national savings year by year [for investment]. (19:441)

Beatrice Webb is the most important woman in the history of British socialism, and of Keynes she recorded in 1926: “I see no other man that might discover how to control the wealth [or investment goods] of nations in the public interest” ([1926] 1985, 93–94).19 In 1928, he proposed an investment politburo, called the National Investment Board, “to mobilise and to maintain the supply of capital and the stream of savings [for investment]” (Keynes 1928a, 69). The socialist politician Hugh Dalton realized, “Such a board will, I believe, be one of our most effective instruments of Socialist planning” (quoted in Pimlott 1985, 218).20 Keynes demands “a new system of public control” (1928b, 109). He states in his 1929 speech “Social Reform as the New Socialism,” “Modern economic organisation is liable to produce unintended and undesired results unless it is controlled from the centre” (1929, 187).

Keynes published his first major work on economics, A Treatise on Money, on October 31, 1930. In this work, he argues that private investment is the central economic problem (Patinkin 1982, 230; Meltzer 1988, 113–14; Moggridge 1992, 486). Naturally, he calls for government control of it: “Perhaps the ultimate solution lies in the rate of capital development becoming more largely an affair of the state, determined by collective wisdom and long views” (CW, 6:145). In fact, the penultimate chapter is titled “Control of the Rate of Investment.” In it he imagines “socialistic action by which some official body steps into the shoes which the feet of the entrepreneurs are too cold to occupy” (6:335).

Keynes abandoned his flawed Treatise on Money almost immediately after it was published, and he started developing The General Theory in late 1931.21 Around this time, he gave a speech to the Society for Socialist Inquiry and Propaganda (Cole 1961, 230, 235). He exclaimed, “Central control of investment” is “urgently called for on practical grounds” (CW, 21:31). In September 1932, he wrote an article in the press calling for “a large measure of control over the volume of new investment” (21:130). He elaborates, “The chief problem would be to maintain the level of investment at a high enough rate to ensure the optimum level of employment….The grappling with these central controls [on investment] is the rightly conceived socialism of the future” (21:137). During the summer of 1933, he gave a speech on his “Control Scheme” in which he said: “My proposals for the control of the business cycle are based on the control of investment” (Keynes 1933, 675).

As with Plato, Keynes has a psychological class theory in which members of different classes are fundamentally different species, or animals. The word psychology comes from the Greek psyche, meaning soul. Just as Plato’s producers have defective souls, Keynes asserts that the “functionless investor” has “uncontrollable and disobedient psychology” (CW, 7:376, 317). Investors have “animal spirits,” meaning that “the mass psychology of a large number of ignorant [investors] is liable to change violently” (7:161–62, 154). Investors must be handled like “domestic animals,” because they have “delusions” (21:438). Keynes’s theory of investor psychology, or animal spirits, is a Platonic theory of the soul. He wrote in 1905, “the soul is divided into several simpler entities—the spirited, animal, vegetative souls and so on (i.e. Plato)….The body is moved by animal spirits” (1905d, 17).

Keynes published The General Theory in 1936 to provide an economic justification for Platonic socialism, or “anti-Marxian socialism” (CW, 7:355). He writes, “I expect to see the State, which is in a position to calculate the marginal efficiency of capital-goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organizing investment” (7:164). He endorses “a somewhat comprehensive socialization of investment,” and says that “Socialisation can be introduced gradually” (7:378). He declares, “I conclude that the duty of ordering the current volume of investment cannot safely be left in private hands” (7:320, 29:232). As many reviewers noticed at the time, The General Theory argues that “national control of investment is an essential prelude to any permanent solution of unemployment,” and that “investment must be socially directed and not left to the vagaries of the individual striving for gain” (Williams 1936, 8–9).

Keynes never abandoned socialism after The General Theory. He wrote in 1938, “Durable investment must come increasingly under state direction” (CW, 21:438). For him, “The Board of National Investment would in one way or another control by far the greater part of investment” (14:49). He advocated a society in which “the bulk of investment [is] under public or semi-public control” (27:322). In summary, Keynes’s goal was, in his very words, “to move out of the nineteenth century laissez-faire into an era of liberal socialism” (21:500).

As with Plato, Keynes’s ideal society is a totalitarian society. If government controls investment goods, it controls what is produced and, by extension, what is consumed. Moreover, if government controls investment goods, it must also exercise control over the human factors that operate those goods. Government must control each person’s occupation and when and where each person works (Mises [1922] 1981, 165; [1944] 2011, 60–61; [1949] 1998, 284). And to do this, it must have ultimate control over where each member of the workforce lives. Of course, some investment goods are unpleasant to operate. State violence would be required to force members of the population to work undesirable jobs on investment goods deemed essential to society. In short, Keynes’s plan to socialize investment entails totalitarianism. He admits that his plan “is much more easily adapted to the conditions of a totalitarian state” (CW, 7:xxvi).22

Keynes did not advocate communism in women and children as Plato did. Still, he must be considered an opponent of the family. Clarence W. Barron, the legendary financial journalist, met Keynes in September 1918 and noted, “Lady Cunard says Keynes is a kind of socialist and my judgment is that he is a Socialist of the type that does not believe in the family” ([1918] 1930, 189). Following Plato, Keynes advocated totalitarian population controls with far-reaching implications for the family, and especially for women.

Like Plato, Keynes wanted the government to control the size of the population. His 1914 paper “Population” says, “That degree of populousness in the world, which is most to be desired, is not to be expected from the working of natural order,” and “There would be more happiness in the world if the population of it were to be diminished.” He calls for government to “mould law and custom deliberately to bring about that density of population which there ought to be” (Keynes 1914, 16, 20, 36). He declared on January 4, 1923:

In the light of present knowledge I am unable to see any possible method of materially improving the average human lot which does not include a plan for restricting the increase in numbers….It may prove sufficient to render the restriction of offspring safe and easy….Perhaps a more positive policy may be required….[I] would like to substitute schemes conceived by the mind in place of the undesigned outcome of instinct and individual advantage playing within the pattern of existing institutions. (CW, 17:453, emphasis added)

Keynes was a eugenicist from 1907 until his death, and, like Plato, he wanted government to control the quality of the population as well. In “Prolegomena to a New Socialism,” he writes, “Population, Eugenics [are] Chief Preoccupations of the State” (Keynes 1924; O’Donnell 1992, 807). He advocates “centralised state control [over the] quality of the population” (CW, 19:441, 19:124). At a meeting of the Malthusian League, of which he was chairman, he declared: “I believe that for the future the problem of population will emerge in the much greater problem of Hereditary and Eugenics. Quality must become the preoccupation” (Keynes 1927, 114). Just weeks before his death, he endorsed “the most important, significant and, I would add, genuine branch of sociology which exists, namely eugenics” (Keynes 1946, 40).

Like Plato, Keynes rejected private property. As noted, Plato wanted “the notion of ‘private property’ [to be] completely eliminated from life” (Laws 739c). Like Plato and all socialists, Keynes attacked private property: “There is no ‘compact’ conferring perpetual rights on those who Have or on those who Acquire [property]” (CW, 9:287). No doubt, the Keynesian ethical theory is totally incompatible with the notions of private property, individual rights, and the rule of law.

Although he was a consequentialist, Keynes rejected Moore’s rule consequentialism. In Principia Ethica, Moore concluded that general rules must always be obeyed: “With regard to any rule which is generally useful, we may assert that it ought always to be observed….Though we may be sure that there are cases where the rule should be broken, we can never know which those cases are, and ought, therefore, never to break it” (1903, 162–63). This conclusion was repugnant to Keynes, and he wanted to reverse it. “Ethics in Relation to Conduct” reads, “I am doubtful whether it is ever possible to show that a rule of action is generally right” (1904a, 20). He reaffirmed, “What we ought to do is a matter of circumstance; metaphysically we can give no rules” (Keynes 1905e, 2). He declared in 1938:

[I rejected] the part [of Moore’s theory] which discussed the duty of the individual to obey general rules. We entirely repudiated a personal liability on us to obey general rules. We claimed the right to judge every individual case on its merits, and the wisdom, experience and self-control to do so successfully. This was a very important part of our faith, violently and aggressively held….We repudiated entirely custom morals, conventions and traditional wisdom. We were, that is to say, in the strict sense of the term, immoralists….I remain, and always will remain, an immoralist. (CW, 10:446–47)

Keynes developed his Platonic theory of probability to attack general rules of conduct. He thought that the frequency theory forced Moore to advocate general rules. Since the conditions of human action are never repeatable, the frequency theory does not permit us to analyze the consequences of our actions with probability. By contrast, the logical theory allows us to use probability to evaluate the consequences of action. In this way, Keynes’s logical theory enhances our ability to understand the consequences of our actions. And if the consequences of violating a general rule are good, then the rule should be violated. Keynes believed he had reversed Moore’s case for general rules by Platonizing Moore’s ethical framework with the logical theory.

It would be difficult to imagine an ethical theory more radical than Keynes’s. Unfortunately, his defenders have been reluctant to spell out the radical politico-economic implications of his ethics. Capitalism is defined as a social system based on private property in the means of production. Thus, capitalism is a social system based on general rules—specifically the rules of private property. By rejecting all general rules, Keynes rejected the rules of private property and, by extension, capitalism. In contrast to capitalism, socialism opposes the general rules of private property: “the theory of the communists [or socialists] may be summed up in the single sentence: Abolition of private property” (Marx and Engels [1848] 1988, 223).23 Certainly Keynes’s policy of socializing investment would require government to overturn the institution of private property. In summary, Keynes was an ethical socialist by January 23, 1904, when he read “Ethics in Relation to Conduct” to the Apostles.

Like Plato, Keynes was an authoritarian. His ethical theory meant that he rejected all rules, or constitutional limits, to restrain government power. He opposed any rules to safeguard individual liberty from government violence. Indeed, he rejected the principle of individual liberty. In accordance with Plato’s elitist metaphysics and epistemology, he maintained that the masses are too ignorant for liberty: “It is not true that individuals possess a prescriptive ‘natural liberty’…[I]ndividuals acting separately to promote their own ends are too ignorant or too weak” (CW, 9:287–88).24 Only Keynes has objective knowledge of the good, and the good is far more important than individual liberty. Echoing Plato, he calls for a totalitarian government to impose the good life on the masses with institutionalized violence.25

As with Plato and all totalitarians, Keynes advocated noble lies.26 For Plato, “our rulers will have to make considerable use of falsehood and deception for the benefit of those they rule….[A]ll such falsehoods are useful as a form of drug” (Republic 459c–d; 414b–15e). Keynes agrees, “A preference for truth or for sincerity as a method may be a prejudice based on some aesthetic or personal standard, inconsistent, in politics, with practical good” (CW, 2:2). He expressed the totalitarian’s cynical view on noble lies when he declared, “It’s the art of statesmanship to tell lies, but they must be plausible lies” (quoted in Colander 1984, 1574).

Like Plato, Keynes condemned the love of money. He exclaimed, “The love of money is detestable” and “The moral problem of our age is concerned with the love of money” (CW, 9:268, 331). As with Plato’s producers, Keynes’s investors are driven by the money, or profit, motive. Socializing investment will abolish the profit motive, and “once we allow ourselves to be disobedient to the test of an accountant’s profit, we have begun to change our civilization” (21:241–42). Plato also condemned interest as unnatural and called for its prohibition (Laws 742). By 1904, Keynes was attacking “unearned increments” such as interest and rent (1904b; 1914, 21). He advocated “the euthanasia of the rentier [or interest earner], and, consequently, the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital” (CW, 7:376). Keynes’s socialist views on money, gold, hoarding, profits, and interest smack of Plato.

Like Plato, Keynes was also a utopian. He describes himself as “among the last of the utopians” (CW, 10:447).27 He denies that scarcity is an inevitable feature of human existence: “There are no intrinsic reasons for the scarcity of capital” (7:220). Like so many charlatans throughout history, he promised that his plan would produce an earthly utopia: “We should in 25–30 years have constructed all capital required. We would increase quantity of capital until it has ceased to be scarce” (Keynes 1989, 179–80; CW, 9:326, 21:37–38). Keynes’s goal was to abolish capitalism and establish a socialist utopia on earth.

Conventional portraits present Keynes as the intentional saviour of capitalism….The conventional picture, however, is badly incomplete and misleading….Keynes was very much concerned with the long term abolition of capitalism as he conceived it. His ultimate goal was a non-capitalist, ethically rational utopia, whose characteristics resembled more closely those of communist or left-wing utopias. (O’Donnell 1991, 15–16; 1989, 294)

And who must rule in Keynes’s socialist utopia? Like Plato, Keynes rejected democracy (Fitzgibbons 1988, 185, 197; Skidelsky 1992, 228). Just as the masses are too stupid for liberty, they are too stupid to participate in politics. “I get the feeling that most of the rest never see anything at all—too stupid or too wicked” (1905f, 124). Instead, Keynes’s ideal socialist republic would be ruled by a cadre of elite economists, such as himself. He writes, “The right solution will involve intellectual and scientific elements which must be above the heads of the vast mass of more or less illiterate voters” (CW, 9:295). Whereas Plato advocated the rule of the philosopher-king, Keynes advocates the rule of the omniscient economist-king: “No! The economist is not king; quite true. But he ought-to be!” (17:432).28


Keynesian economics is Platonic to the core, and this is best illustrated with a reductio ad absurdum.29 As the Keynesian economist Paul Davidson writes, “Keynes’s primary level of attack on classical theory involved the expansion of demand into two distinct classes” (2005, 456–57; Hansen 1953, 26).30 Keynes divided aggregate demand between consumers and investors, and he vilified the investor class. But aggregate demand can be divided in any way to vilify any class. To illustrate, imagine that all spenders are either auxiliaries or producers. In this case, total income (Y) equals spending by the auxiliaries (A) plus spending by the producers (P):

Fuller JLS equation 1

After expanding aggregate demand into the auxiliary and producer classes, it is necessary to invent a theory of spending for each class. The auxiliaries are dominated by the spirited part of the three-part soul, meaning that they spend in a highly disciplined, robotic manner. It is asserted that there is a strict mathematical, or “functional,” relationship between auxiliary spending and income (CW, 7:90). It is possible to formulate the auxiliary spending function, where a is autonomous auxiliary spending and b is the slope of the auxiliary spending function:

Fuller JLS equation 2

Now comes the fundamental psychological law: “[Auxiliaries] are disposed, as a rule and on average, to increase their consumption as their income increases, but not by as much as the increase in their income” (CW, 7:96). The fundamental psychological law means that the slope of the auxiliary spending function (b) must be between zero and one. The use of the term “psychological” in the name of this fundamental law is significant. Recall, the Greek for soul is psyche. Thus, the fundamental psychological law is a Platonic theory of the soul.

Given Plato’s theory of the three-part soul, the producer is a fundamentally different species, or animal. Hence, the theory of producer spending is radically different from the theory of auxiliary spending. Producer spending is not a function of income at all, because, unlike the disciplined auxiliaries, producers are dominated by “animal spirits” (CW, 7:161–62). Since producers are dominated by the appetitive soul, there is no tendency for producer spending to be optimal: “There is no reason to suppose that there is ‘an invisible hand’…which ensures…that the amount of…[producer spending] shall be continuously of the right proportion” (21:386–87). The analysis can be diagrammed to give the theory a scientific aura. Figure 1 can be called the Platonic cross.

Figure 1: Platonic Cross

Fuller JLS figure 1 Platonic Cross

The producers’ defective souls, their psychological disobedience, means that society cannot be organized with nonviolent methods. To illustrate, we combine the income equation with the auxiliary spending function. This gives us Plato’s demand constraint.31


Plato’s demand constraint means that overall living standards depend on producer spending. If producer spending is high, then the amount of auxiliary spending must be high too. If producer spending is low, then the amount of auxiliary spending must also be low. Therefore, the amount of auxiliary spending can only be optimal if producer spending is optimal. Figure 2 illustrates the precise, positive relationship between producer spending and auxiliary spending.32

Figure 2: Platonic Demand Constraint

Fuller JLS figure 2 Platonic Demand Constraint

Chronic economic stagnation is thus the fundamental economic problem facing humankind. Since the producers have defective souls, their spending is normally suboptimal. Chronically low producer spending causes chronic economic stagnation and unemployment: “There should be on the average a tendency to severe unemployment [of resources and workers]” (Keynes 1988, L9; CW, 7:249–50). In figure 3, producer spending is optimal at PO. However, producer spending tends to be suboptimal at PSO. Given the Platonic demand constraint, this means that the amount of auxiliary spending will also be chronically suboptimal. In short, suboptimal producer spending means that the national income is chronically stuck below the optimal national income, at YSO rather than YO.

Figure 3: Chronic Stagnation

Fuller JLS figure 3 Chronic Stagnation

Chronic stagnation is the central economic problem, for it prevents humankind from entering the utopia.33 What must be done? The philosopher-king must take control. In terms of figure 3, the philosopher-king forcibly increases producer spending to the optimal level, from PSO to PO. This increases national income to the optimal level, from YSO to YO. After the optimal national income is achieved, the philosopher-king must permanently maintain producer spending at the optimal level, year in and year out. If this is done, humankind will enter the utopia “within a single generation” (CW, 7:220).

This reductio ad absurdum illustrates an essential point: Keynesian economics can be repurposed to attack any class. In the example above, aggregate demand was divided between auxiliaries and producers rather than consumers and investors. But aggregate demand can be divided between men and women, whites and blacks, Aryans and Jews, heterosexuals and homosexuals, proletarians and capitalists, etc. Then the “philosopher-economist” asserts that the superior class’s spending is a function of income, while the inferior class’s spending depends on animal spirits. The pseudoscientific Keynesian equations and diagrams can be formulated to vilify any class. And the analysis always leads to the same conclusion: everyone can live in a utopia if a totalitarian government controls society. No matter the class division, it is impermissible to question the scientific validity of the theory. Only the elite philosopher-economist can peer into the world of Forms. Anyone who doubts the new economics is an ignorant soul trapped in the Heraclitian flux.34


John Maynard Keynes is perhaps the most important Platonist in modern history. He adopted Plato’s metaphysics and epistemology in 1903 when he was an undergraduate student at Cambridge. And, as it is prone to do, Plato’s philosophical system led him step by step to socialism. By 1904, Keynes built a socialist ethical theory on the basis of Plato’s metaphysics and epistemology. From his socialist ethical theory he derived a political philosophy that was virtually identical to Plato’s totalitarian socialism. Finally, decades later, he invented Keynesian economics to justify his brand of Platonic socialism. In summary, Keynes’s economic theory has its ultimate origins in Plato’s philosophy.

The Platonic origins of Keynesian economics must trouble economists. Like Plato, Keynes was an old-fashioned mystic: “I am sure it must be all true. We are mystic numbers,” and “I have called [my] faith a religion, and some sort of relation of neo-platonism it surely was” (1906c, 102; CW, 10:438).35 He believed he had special access to objective knowledge in a transcendental, mystical reality. From this supernatural realm he obtained knowledge of the good, of probability, of class psychology, and, most importantly, of Keynesian economics. Keynes’s Platonism means that Keynesian economics is a mysticoreligious theory, not legitimate economic science. Not only are the Platonic origins of Keynesian economics deeply unscientific, but they are dangerous. For totalitarian socialism naturally follows from any philosophy that holds that the elite have exclusive access to objective knowledge in a mystical reality.36

  • 1Plato also expresses his theory of two realities with his Allegory of the Cave (Republic 514a–520d). The cave is Plato’s analogy for the visible world in which humans live, while the world outside the cave is his analogy for the world of Forms. See Copleston ([1946] 1993, 160) and Jones (1952, 114).
  • 2Plato also expresses his theory of the three-part soul in his Myth of the Metals (Republic 412a–415c).
  • 3 Generally, the ancient Greeks failed to understand how society can be organized nonviolently, or spontaneously, via the invisible hand. Like Plato, Heraclitus and the Sophists advocated violent methods of social organization. Heraclitus claims, “We must know that war is common to all and strife is justice” (Fragments 62). For the Sophists Callicles and Thrasymachus, “the superior should take by force what belongs to the inferior...the better should rule the worse” and “justice is nothing other than the advantage of the stronger” (Gorgias 488b; Republic 338c).
  • 4Plato had personal reasons to reject democracy. He was born into a noble family that despised democracy. His uncle, Charmides, and his cousin, Critias, were members of the notorious Thirty Tyrants (Jones 1952, 92; Guthrie 1975, 11). This group attempted to abolish Athenian democracy in 404 BC. Plato’s contempt for democracy only intensified when Athenian democrats executed his master Socrates.
  • 5As Ludwig von Mises writes, “There is no economic difference between socialism and communism. Both terms, socialism and communism, denote the same system of society’s economic organization, i.e., public control of all the means of production….The two terms, socialism and communism, are synonyms” ([1956] 2006, 38; [1922] 1981, 497; [1949] 1998, 259, 713). Also see note 20.
  • 6As Mises stressed, institutionalized violence against person and property is the essence of socialism: “Socialism is the expression of the principle of violence” ([1922] 1981, 320; Huerta de Soto [1992] 2010, 49, 84–85).
  • 7Plato allowed women to be guardians, and this has led some to argue he was a feminist. But as Gregory Vlastos says, “In his personal attitude to the women in his own contemporary Athens Plato is virulently anti-feminist” (1989, 116). On Plato’s anti-feminism, see Annas (1976) and Buchan (1999).
  • 8Some interpreters deny Plato’s totalitarianism. But C. C. W. Taylor writes, “It is…uncontroversial that the ideal state of the Republic is a totalitarian state. Where there is room for dispute is on the question of what kind of totalitarian state it is” ([1986] 1999, 282). Plato attempted three times to establish a totalitarian state in Syracuse (Jones 1952, 101). Further, as Popper writes, “[Plato’s] Academy was notorious for breeding tyrants” (1945, 229n25). At least eight of Plato’s students either became tyrants or attempted to become tyrants: Callippus of Syracuse, Chaeron of Pellene, Clearchus of Heraclea, Coriscus of Skepsis, Euagon of Lampsacus, Erastus of Skepsis, Hermias of Atarneus, and Timolaus of Cyzicus.
  • 9Dickinson is perhaps the most neglected figure in Keynes’s intellectual development. The Platonist Dickinson wrote in August 1884, “I’ve just descended from a seventh heaven….[I’ve been] reading and meditating on Plato’s Symposium….I’m ‘sitting at Plato’s feet’ at present, and have really never experienced such ‘ecstasy’” (quoted in Forster 1934, 43). He proclaimed, “I was led by Plato (among other things) to a belief that there was some supernormal mystic avenue to truth” (1973, 67). In May 1908, Dickinson helped secure Keynes a lectureship at Cambridge (Moggridge 1992, 178–79). Unfortunately, the voluminous Keynes-Dickinson correspondence did not survive (Skidelsky 1992, 692).
  • 10As O’Donnell admits, “It is significant that a Platonic form of realism pervades…Moore’s Principia Ethica” (1990, 338n8).
  • 11Lytton Strachey aligned Moore with Plato: “[Lytton] saw Moore as another Plato, and Principia Ethica as a new and better Symposium” (Holroyd [1967] 2005, 89).
  • 12Like Plato, Keynes was a rationalist who rejected empiricism: “Keynes is a particular kind of rationalist, rather than an empiricist” (O’Donnell 1989, 81). Anna Carabelli agrees, “Certainly, Keynes was not an empiricist” (2003, 214; Dostaler 2007, 74).
  • 13Strachey’s biographer writes, “Once [Lytton] had relinquished Christianity, Plato’s Symposium became for him a new Bible” (Holroyd [1967] 2005, 39). As with Plato, Strachey was a “communist” (Strachey [1926] 2005, 556).
  • 14For similar statements on his short-term orientation, see Keynes (CW, 1:120, 8:342, 10:445, 23:224, 28:62). In the secondary literature, see Carabelli (1988, 128), Deacon (1986, 173), Fitzgibbons (1988, 49), Hayek ([1960] 2011, 460; 1988, 57, 76, 84), Himmelfarb (1986, 37), Moggridge (1992, 127), O’Donnell (1989, 118, 278), Schumpeter (1946, 506), and Skidelsky (1983, 155–56; 1992, 60; 2000, 156).
  • 15Lawrence Klein, a dedicated Keynesian, admits, “Keynes’s ideas on probability represent a minority position among current workers on the subject and are not those for which we shall long remember his work….[H]e did not make a sensational advance in probability theory” (1951, 446). Of course, his entire ethical theory collapses if his theory of probability is flawed. See Donald Gillies (2000, 25–49) for a critique of the logical theory.
  • 16A classical liberal must reject the notion of liberal socialism. For a classical liberal, liberalism and socialism are mutually exclusive, and the notion of liberal socialism is as self-contradictory as the notion of a triangular square. Keynes is better described as a non-Marxist socialist. See Raico (2008) on Keynes’s antiliberalism.
  • 17Anna Carabelli writes, “Keynes’s attitude towards investment…remained substantially unchanged from his early articles written at the beginning of the century to the latest contributions written after The General Theory” (1988, 195; Skidelsky 1983, 208).
  • 18Skidelsky says, “What chiefly impressed Keynes about British businessmen was their stupidity” (1992, 259; Johnson and Johnson 1978, 105).
  • 19Keynes was close friends with the Webbs. In 1936, he praised the Webbs’ problematic book Soviet Communism (CW, 28:333). He considered Beatrice “the greatest woman of the generation” (1943).
  • 20The British Labour Party acknowledged that Keynes advocated socialist policy when it included his National Investment Board in its 1934 program, For Socialism and Peace (Labour Party 1934, 14). Keynes voted for the socialist Labour Party three months before he published The General Theory.
  • 21In September 1930, he admitted that it was a “failure” (CW, 13:176). The Keynesian Don Patinkin writes, “[I]t is not a good book,” and “the Treatise was not a successful book” (1976, 25; 1982, 32). Also see Laidler (1999, 131), Meltzer (1988, 103), and Moggridge (1992, 530).
  • 22Don Patinkin, a Keynesian, observes that Keynes “speaks almost enviously (and, I think, naively) of the greater ease (as it were) with which a totalitarian government can achieve a new equilibrium position” (1976, 122).
  • 23Marx used the terms socialism and communism interchangeably. As Mises writes, “Until 1917 communism and socialism were usually used as synonyms” ([1944] 2011, 60–61). During the Bolshevik Revolution of 1917, Keynes described himself as a “Bolshevik” and proudly declared: “The only course open to me is to be buoyantly Bolshevik” (CW, 16:266–67). On communism and socialism, see note 5.
  • 24Dostaler notes the connection between Keynes’s “elitism” and “paternalism,” and he acknowledges that Keynes thought “working people [are] incapable of managing their own lives” (2007, 102).
  • 25Gordon Fletcher admits, “Keynes’s scheme does seem to favour the notion of a forced march to utopia” (2008, 175). As Dostaler observes, “He was and would always remain convinced that only an intellectual elite, of which he undoubtedly considered himself a gifted member, could understand the complex mechanics of economics and politics and would thus be able to implement the reforms necessary to achieve happiness” (2007, 89).
  • 26See Hayek ([1944] 1994, 172; 1988, 138) and Popper (1945, 122–23) on the link between Plato, totalitarianism, and noble lies.
  • 27On Keynes’s utopianism, see Brunner (1996, 208), Dostaler (2007, 99), Fitzgibbons (1988, 68, 191), Fletcher (2008, 171, 175), Hansen (1953, 215), Hession (1984, 375), Johnson and Johnson (1978, 228), Meltzer (1988, 185), Raico (2008, 171–73), Salerno (1992, 18), and Skidelsky (1992, 234-38; 2000, 478). Mises describes Plato as a “utopian” ([1962] 2006, 111).
  • 28Roy Harrod admits that Keynes “cultivated the appearance of omniscience” (1951, 468). Quentin Bell reports that members of the Bloomsbury group resented “Maynard’s claim to omniscience” (1995, 97).
  • 29Skidelsky notes, “One of Keynes’s favourite and most effective techniques was the use of the reductio ad absurdum to ridicule the reasoning of his opponents” (1992, 425; Johnson and Johnson 1978, 36).
  • 30Also see Dillard (1984, 425), Dostaler (2007, 170), Pasinetti (1974, 36), Patinkin (1982, 244), and Skidelsky (1992, 498, 544; 2009, 90).
  • 31On the Keynesian demand constraint, see Roger Garrison (2001, 136).
  • 32Keynes’s theory “holds not that C[onsumption] and I[investment] are alternatives but rather they move together” (Keynes 1988, L9). On the positive relationship between investment and consumption in Keynesian theory, see Dimand (1988, 151, 189), Garrison (2001, 136), and Meltzer (1988, 153).
  • 33Keynes’s main economic concern is not the business cycle, but “a chronic state of unemployment” (Patinkin 1976, 114; 1982, 88). Skidelsky writes, “[Keynes] thought that a state of unemployment or underemployment was the general condition of mankind,” and that “suboptimal performance is normal” (1992, 615; 2009, 99). Also see Brunner (1996, 196), Dillard (1948, 3–4, 155, 269), Fletcher (1987, 165, 186), Garrison (2001, 129, 145, 168, 177), Johnson and Johnson (1978, 27, 204), Laidler (1999, 154, 265), Meltzer (1988, 6, 123, 153, 172, 300), and Schumpeter (1946, 501).
  • 34Bertrand Russell and others noticed that “Keynes dismissed opponents as idiots” (Holroyd [1967] 2005, 104). Hubert Henderson observed that Keynes regarded opponents of Keynesianism as “intellectually inferior beings” ([1936] 2003, 540). Harrod wrote, “I admit that [Keynes’s] manners, where his own theories are concerned, are impossible” ([1936] 2003, 532).
  • 35Kinglsey Martin confirmed that Keynes described his philosophy “as a religion” (1966, 99), and Skidelsky admits that he “thought of himself as a part of the ‘clerisy’” (1992, 8).
  • 36O’Donnell confesses, “Plato’s republic was to be governed by highly educated philosopher-guardians. For Keynes, it was the intelligentsia….Far from being a mere personality trait, the intellectual elitism detectable in some of Keynes’s writings and attitudes can be given some foundation in his philosophy. Elitism is always a possible companion of intuitionist [i.e., Platonic] philosophies” (1989, 66).


Fuller, Edward W., “Keynes and Plato,” Journal of Libertarian Studies 24, no. 1 (2020): 3–41.

Note: The views expressed on are not necessarily those of the Mises Institute.
What is the Mises Institute?

The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard. 

Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.

Become a Member
Mises Institute