Why Keynesian theory can’t dig us out of Brexit uncertainty

‘It is seldom wise to sacrifice a present evil for a doubtful advantage in the future,’ wrote John Maynard Keynes as a precocious undergraduate in 1904. As we contemplate what no deal might be about to bring, those words seem to confirm the view of his living followers that the sage who died in 1946 (though usually labelled a free-trader) would have voted Remain.      But he was also well known as a pragmatist, so it’s worth asking what he would be telling us to do now, as the cliff-edge looms while UK GDP growth has already fallen to its slowest rate since 2012, at 1.4 per cent last year, according to the ONS. I wonder if he might repeat a dictum from his The General Theory of Employment, Interest and Money to the effect that if the Treasury were ‘to fill old bottles with banknotes’, bury them in disused mines and leave it to private enterprise to dig them up again, then ‘there need be no more unemployment and… the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is’.