On the New Appeal of Chapter 12 of the 'General Theory' - Complicating Remarks on the Keynes-Hume Connection and the Presumed Novelty of the Analysis of Financial Markets in the 'General Theory'

Keynes, Animal Spirits, and Instinct: Reason Plus Intuition Is Better Than Rational

“…He recognized that all human behavior (including economic behavior) was constituted from two different sorts of mental processes working together or in parallel: conscious, rational forms of deliberation; and unconscious, instinctual forms of deliberation. Previously, this distinction has been expressed in terms of the subjective/psychological against the objective/logical elements of his thought (Carabelli and Cedrini 2012, p. 29), but this erroneously implies that the two components are warring instead of cooperating.…”

“…The difference between instinct and intuition was that the former operated as a basic urge to action, while the latter was an unconscious method of analysis and judgment. Elsewhere Keynes’s association of spontaneity in action with instinct has been noted and declared a legacy of his theory of probability (Carabelli and Cedrini 2012, p. 31), but in fact it was more a legacy of his understanding of the evolution of human nature, which had facilitated the availability of some types of direct knowledge that transcended particular sensations and experiences (O’Donnell 1990, p. 342). In this respect it is correct to stipulate that in Keynes’s account of rationality, the cognitive aspects that embody human experience were predominant, and that the economic agent’s motives must be studied in relation to these cognitive conventions (Carabelli 1988, pp.…”