Keynes was a speculator. From the XNUMXs until the eve of the Second World War, he played on the stock market, above all with derivatives (futures and options) on raw materials (food, metals and fibres) with mixed success. From this experience he drew the conviction that these markets should be regulated, since – contrary to what the defenders of the free market (are) not preaching – speculation amplifies and does not reduce price fluctuations. Instead of bringing information on the right price to the market, or taking upon themselves the risk of uncertainty about the future price, speculators contribute to dragging the price higher or lower, which would be determined only on the basis of the laws of demand and of supply and the level of stocks.
Hence his proposal, presented in 1938, to set up an international agency -baptized Commod - and financed by what was to be his projected Currency Union (not the current World Bank or International Monetary Fund). This institution would have had the task of stabilizing the prices of raw materials, containing them within a pre-established corridor; at first Keynes was thinking of a plus or minus 10% with respect to the average prices observed in a pre-selected period before.
To his student and stock-playing partner, Richard Kahn, this idea seemed too mechanical and automatic. He perfected it in the fifties, on behalf of the FAO, in that of a price governing body (the Buffer Stock) through the sale and purchase of "stocks", guided by the same logic of a private speculator, but in the public interest. It was a question of taking the market by surprise with unpredictable and expected purchases and sales, exploiting adequate information and knowledge. It would be like thinking of entrusting the direction of these operations on behalf of the international agency to a Soros or a Buffett.
Both Keynes and Kahn belonged to that group of economists whom Cambridge culture had refined to also become civil servants, if necessary also to govern the Empire. Not only competence, but dedication to public service and repugnance for the pursuit of one's own economic advantage.
The people at the disposal of the government apparatuses (national and supranational) perhaps do not have all those requisites, imbued with a good dose of Bloomsbury-esque idealism, required for the proposal to function properly, but Keynes and Kahn's idea remains good and today perhaps more “presentable” than in the past. Because the tests of international cooperation that the 2008-2011 crisis imposed on the world scene have shown that the cooperative game, rather than the zero-sum one, is worth the candle after all.
