What a theory of 'aggregate demand shortfall' shares with explanations of 'the market'

Following on from yesterday's posting about alternative models of political/economic/moral actors at the trans-individual level I am also reminded of another posting I did a while back mentioning mercantilism.  Two observations seem clear to me now.  Firstly, that mercantilism, following close on the heels of Hobbes's great  master-work of political economy, was also an example of an explanatory rule book which was also pitched at the aggregate level.  But secondly, that this rule-book was wrong.  Just because a philosopher or political economist can invent such a trans-individual rule book for aggregate pseudo-actors, it doesn't follow that this rule-book is in practice any good.  Mercantilism was an example, I think.  That is to say, it is an additional open question to evaluate the field of possible aggregate-based explanations of national actors.  Some will work for a given moment in time better than others.  Mercantilism certainly has its own chapter in the history of the modern nation state, but it can lay no a priori claim to be the 'best' model.  That's a question of scientific investigation, ideally.

Another example is theoretical and practical examples involving 'The Market' as aggregate actor.  The Austrian school seems generally happy to disembody when desired, and pull in market average at short notice.  Recovering individual market fact states in the face of knowledge of the aggregate state can help,

'The Market'  is today for us just as emergent a phenomenon as mercantilism.   Could not the consensus opinion of the market be wrong too?  It is strange how the Austrians live with the management of the body politic through markets-based economy but criticise violently the aggregate based macro of Keynes.

It seems to me you can't know without looking whether one or another aggregates-based explanation works or not.  Some will, some won't.  You can't write them off just because they're aggregates based per se.

Keynes via Machievelli, Hobbes and Nietzsche

Neoclassical economists at core prefer macro-economic explanations which cash out at the micro-level.  As I mentioned in a previous post some of the roots of the story Keynes tells about the actor known as leviathan can be traced back to Thomas Hobbes.  But I'd like to throw in a religious dimension to all of this, which points even further back to Machiavelli and forward to Nietzsche.

Hobbes's construct was a macro actor, a personification of the state, onto which desires, intentions, actions are imposed.  Collections of these actors interacting at the state level are the genesis of macro-economics.  This is Keynes's root.  No assumption is made about any evolution from individual actors to state actors.  They're just different beasts.  Understanding this allows him to question simplifying projections of homespun metaphors which make sense at the individual level but which might not work at all in the same way at the state level.

But a generation or two before Hobbes, Machiavelli tried to develop a book of etiquette  for the only figure who could span the individual and the state - and that is the king or prince.  This is an amazing point of connection here between two entire schools of thought which have been struggling to maintain a friendly dialogue ever since.  In the embodiment of the prince, here you have a flesh and blood man who's being given a new rulebook for behaviour vis-a-vis his role as sovereign.  It is no wonder that rulebook seemed so alien.  The context behind this was I think an implicit understanding that the tenets of living - the rules of behaviour  - embodied in Christianity (and by extension to several of the other major world religions) were insufficient for the emerging nation state post the Christian empire's dominance.  Driving a state with rules which applied to individual Christians became inadequate.  Machiavelli's was an early attempt to make a new rulebook for the sovereign.  Nietzsche likewise took this breakdown of the homogeneous and unquestioned presence of Christianity in Western life and tried to apply it to individuals themselves.  Both thinkers take the same inspiration but write their rulebooks for the national-sovereign and the personal-sovereign.  The evolution of the discourse on the rulebook for the national-sovereign becomes increasingly hermetically sealed, less immoral-seeming, still alien, more amoral, formalised even.  This is, in a sense Catholic to Nietzsche's more Protestant radical individualist pursuit. which has echoes in the work of J.S. Mill, through Samuelson, Friedman and the mainstream neoclassical approach.  The Catholic state-as-actor/institution-as-actor approach has echoes in Adam Smith, Veblen, institutional analysis, Keynes.  

The rejection of the project of Keynes's aggregates based approach in favour of the micro-based approach is in a sense a rejection of the power of the state to write its own rule book, as the rule book is too detached from the individuals within it.  It is a rejection of an elite tradition of technocratic statecraft, talking in riddles among themselves, preferring to see individuals as effaced details.  

So much for the history of these ideas.  That explains to me some of the mutual cultural hostility when you hear the modern day intellectual combatants face off in the media.  Their positions may be deeply connected anyway.  The science of emergence is still in its infancy.  I can well imagine that the creative act of invention behind Machiavelli, Nietzsche, Hobbes, Keynes will not be the end of the story.  I marvel at their inventiveness but suspect in time that strong complex connections will be found between the micro and the macro level across many social sciences.  So perhaps the best way to bring Keynes together with Buchanan and Lucas is to think of them as  providing joint inspiration to new generations of political economists as they recognise the gap - but also try to bridge it, with increasing levels of success - between the rulebooks of individuals and the rulebooks of the various institutions which they produce.