D. E. Moggridge's Maynard Keynes: An Economist's Biography becomes immediately the most authoritative biographical work on. Keynes. It surpasses Roy.
Table of contents
However, Keynes was still able to influence government policy making through his network of contacts, his published works and by serving on government committees; this included attending high-level policy meetings as a consultant. Keynes had completed his A Treatise on Probability before the war, but published it in Keynes developed the first upper-lower probabilistic interval approach to probability in chapters 15 and 17 of this book, as well as having developed the first decision weight approach with his conventional coefficient of risk and weight, c , in chapter In addition to his academic work, the s saw Keynes active as a journalist selling his work internationally and working in London as a financial consultant.
In Keynes wrote an obituary for his former tutor Alfred Marshall which Joseph Schumpeter called "the most brilliant life of a man of science I have ever read. Britain suffered from high unemployment through most of the s, leading Keynes to recommend the depreciation of sterling to boost jobs by making British exports more affordable. From he was also advocating a fiscal response, where the government could create jobs by spending on public works.
Keynes advised it was no longer a net benefit for countries such as Britain to participate in the gold standard , as it ran counter to the need for domestic policy autonomy. It could force countries to pursue deflationary policies at exactly the time when expansionary measures were called for to address rising unemployment. The Treasury and Bank of England were still in favour of the gold standard and in they were able to convince the then Chancellor Winston Churchill to re-establish it, which had a depressing effect on British industry.
Keynes responded by writing The Economic Consequences of Mr. Churchill and continued to argue against the gold standard until Britain finally abandoned it in Keynes had begun a theoretical work to examine the relationship between unemployment, money and prices back in the s. A central idea of the work was that if the amount of money being saved exceeds the amount being invested — which can happen if interest rates are too high — then unemployment will rise. This is in part a result of people not wanting to spend too high a proportion of what employers pay out, making it difficult, in aggregate, for employers to make a profit.
Another key theme of the book is the unreliability of financial indices for representing an accurate — or indeed meaningful — indication of general shifts in purchasing power of currencies over time. In particular he criticised the justification of Britain's return to the gold standard in at pre-war valuation by reference to the wholesale price index. He argued that the index understated the effects of changes in the costs of services and of labour. In he wrote, "We will not have any more crashes in our time. Keynes was deeply critical of the British government's austerity measures during the Great Depression.
He believed that budget deficits were a good thing, a product of recessions. He wrote, "For Government borrowing of one kind or another is nature's remedy, so to speak, for preventing business losses from being, in so severe a slump as to present one, so great as to bring production altogether to a standstill. At the height of the Great Depression, in , Keynes published The Means to Prosperity , which contained specific policy recommendations for tackling unemployment in a global recession, chiefly counter-cyclical public spending.
The Means to Prosperity contains one of the first mentions of the multiplier effect. While it was addressed chiefly to the British Government, it also contained advice for other nations affected by the global recession. A copy was sent to the newly elected President Franklin D. Roosevelt and other world leaders.
The work was taken seriously by both the American and British governments, and according to Robert Skidelsky , helped pave the way for the later acceptance of Keynesian ideas, though it had little immediate practical influence. In the London Economic Conference opinions remained too diverse for a unified course of action to be agreed upon. Keynesian-like policies were adopted by Sweden and Germany, but Sweden was seen as too small to command much attention, and Keynes was deliberately silent about the successful efforts of Germany as he was dismayed by their imperialist ambitions and their treatment of Jews.
In , he received considerable support for his views on counter-cyclical public spending in Chicago, then America's foremost centre for economic views alternative to the mainstream. It was researched and indexed by one of Keynes's favourite students, later the economist David Bensusan-Butt. The General Theory challenged the earlier neoclassical economic paradigm, which had held that provided it was unfettered by government interference, the market would naturally establish full employment equilibrium. In doing so Keynes was partly setting himself against his former teachers Marshall and Pigou.
Keynes believed the classical theory was a "special case" that applied only to the particular conditions present in the 19th century, his own theory being the general one. Classical economists had believed in Say's law , which, simply put, states that " supply creates its own demand ", and that in a free market workers would always be willing to lower their wages to a level where employers could profitably offer them jobs.
An innovation from Keynes was the concept of price stickiness — the recognition that in reality workers often refuse to lower their wage demands even in cases where a classical economist might argue it is rational for them to do so. Due in part to price stickiness, it was established that the interaction of " aggregate demand " and " aggregate supply " may lead to stable unemployment equilibria — and in those cases, it is the state, not the market, that economies must depend on for their salvation.
The General Theory argues that demand, not supply, is the key variable governing the overall level of economic activity. Aggregate demand, which equals total un-hoarded income in a society, is defined by the sum of consumption and investment. In a state of unemployment and unused production capacity, one can only enhance employment and total income by first increasing expenditures for either consumption or investment. Without government intervention to increase expenditure, an economy can remain trapped in a low employment equilibrium — the demonstration of this possibility has been described as the revolutionary formal achievement of the work.
It is precisely with these plants and these men that we shall afford them. The General Theory is often viewed as the foundation of modern macroeconomics. Few senior American economists agreed with Keynes through most of the s. Keynes himself had only limited participation in the theoretical debates that followed the publication of the General Theory as he suffered a heart attack in , requiring him to take long periods of rest. Among others, Hyman Minsky and Post-Keynesian economists have argued that as result, Keynes's ideas were diluted by those keen to compromise with classical economists or to render his concepts with mathematical models like the IS—LM model which, they argue, distort Keynes's ideas.
In the General Theory and later, Keynes responded to the socialists and left-wing liberals who argued, especially during the Great Depression of the s, that capitalism caused war. He argued that if capitalism were managed domestically and internationally with coordinated international Keynesian policies, an international monetary system that didn't pit the interests of countries against each other, and a high degree of freedom of trade , then this system of managed capitalism could promote peace rather than conflict between countries. His plans during World War II for post-war international economic institutions and policies which contributed to the creation at Bretton Woods of the International Monetary Fund and the World Bank , and later to the creation of the General Agreement on Tariffs and Trade and eventually the World Trade Organization were aimed to give effect to this vision.
Although Keynes has been widely criticised — especially by members of the Chicago school of economics — for advocating irresponsible government spending financed by borrowing, in fact he was a firm believer in balanced budgets and regarded the proposals for programs of public works during the Great Depression as an exceptional measure to meet the needs of exceptional circumstances. During the Second World War , Keynes argued in How to Pay for the War , published in , that the war effort should be largely financed by higher taxation and especially by compulsory saving essentially workers lending money to the government , rather than deficit spending , in order to avoid inflation.
Compulsory saving would act to dampen domestic demand, assist in channelling additional output towards the war efforts, would be fairer than punitive taxation and would have the advantage of helping to avoid a post war slump by boosting demand once workers were allowed to withdraw their savings. In September he was proposed to fill a vacancy in the Court of Directors of the Bank of England , and subsequently carried out a full term from the following April.
As the Allied victory began to look certain, Keynes was heavily involved, as leader of the British delegation and chairman of the World Bank commission, in the mid negotiations that established the Bretton Woods system. The Keynes-plan, concerning an international clearing-union, argued for a radical system for the management of currencies. He proposed the creation of a common world unit of currency, the bancor , and new global institutions — a world central bank and the International Clearing Union. Keynes envisaged these institutions managing an international trade and payments system with strong incentives for countries to avoid substantial trade deficits or surpluses.
According to US economist J. Bradford DeLong , on almost every point where he was overruled by the Americans, Keynes was later proved correct by events. The two new institutions, later known as the World Bank and the International Monetary Fund IMF , were founded as a compromise that primarily reflected the American vision. There would be no incentives for states to avoid a large trade surplus ; instead, the burden for correcting a trade imbalance would continue to fall only on the deficit countries, which Keynes had argued were least able to address the problem without inflicting economic hardship on their populations.
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Yet, Keynes was still pleased when accepting the final agreement, saying that if the institutions stayed true to their founding principles, "the brotherhood of man will have become more than a phrase. After the war, Keynes continued to represent the United Kingdom in international negotiations despite his deteriorating health. He succeeded in obtaining preferential terms from the United States for new and outstanding debts to facilitate the rebuilding of the British economy.
Just before his death in , Keynes told Henry Clay, a professor of social economics and advisor to the Bank of England , [66] of his hopes that Adam Smith 's " invisible hand " could help Britain out of the economic hole it was in: From the end of the Great Depression to the mids, Keynes provided the main inspiration for economic policy makers in Europe, America and much of the rest of the world.
According to the economist John Kenneth Galbraith then a US government official charged with controlling inflation , in the rebound of the economy from wartime spending, "one could not have had a better demonstration of the Keynesian ideas. The Keynesian Revolution was associated with the rise of modern liberalism in the West during the post-war period. Despite his popularity as a war hero, Churchill suffered a landslide defeat to Clement Attlee whose government's economic policy continued to be influenced by Keynes's ideas.
In the late s and s, economists notably John Hicks , Franco Modigliani , and Paul Samuelson attempted to interpret and formalise Keynes's writings in terms of formal mathematical models. In what had become known as the neoclassical synthesis , they combined Keynesian analysis with neoclassical economics to produce neo-Keynesian economics , which came to dominate mainstream macroeconomic thought for the next 40 years. By the s, Keynesian policies were adopted by almost the entire developed world and similar measures for a mixed economy were used by many developing nations.
By then, Keynes's views on the economy had become mainstream in the world's universities. Throughout the s and s, the developed and emerging free capitalist economies enjoyed exceptionally high growth and low unemployment. In late Time magazine ran a cover article with a title comment from Milton Friedman later echoed by U. President Richard Nixon , " We are all Keynesians now ".
The article described the exceptionally favourable economic conditions then prevailing, and reported that "Washington's economic managers scaled these heights by their adherence to Keynes's central theme: Keynesian economics were officially discarded by the British Government in , but forces had begun to gather against Keynes's ideas over 30 years earlier.
Friedrich Hayek had formed the Mont Pelerin Society in , with the explicit intention of nurturing intellectual currents to one day displace Keynesianism and other similar influences. Initially the society had little impact on the wider world — according to Hayek it was as if Keynes had been raised to sainthood after his death and that people refused to allow his work to be questioned. On the practical side of economic life, " big government " had appeared to be firmly entrenched in the s, but the balance began to shift towards the power of private interests in the s.
Keynes had written against the folly of allowing "decadent and selfish" speculators and financiers the kind of influence they had enjoyed after World War I. International speculation was severely restricted by the capital controls in place after Bretton Woods. According to the journalists Larry Elliott and Dan Atkinson , was the pivotal year when power shifted in favour of private agents such as currency speculators.
As the key event Elliott and Atkinson picked out America's suspension of the conversion of the dollar into gold except on request of foreign governments, which they identified as the beginning of the breakdown of the Bretton Woods system. Criticisms of Keynes's ideas had begun to gain significant acceptance by the early s, as they were then able to make a credible case that Keynesian models no longer reflected economic reality.
Keynes himself included few formulas and no explicit mathematical models in his General Theory. For economists such as Hyman Minsky , Keynes's limited use of mathematics was partly the result of his scepticism about whether phenomena as inherently uncertain as economic activity could ever be adequately captured by mathematical models. Nevertheless, many models were developed by Keynesian economists, with a famous example being the Phillips curve which predicted an inverse relationship between unemployment and inflation. It implied that unemployment could be reduced by government stimulus with a calculable cost to inflation.
In , Milton Friedman published a paper arguing that the fixed relationship implied by the Philips curve did not exist. In the early s stagflation appeared in both the US and Britain just as Friedman had predicted, with economic conditions deteriorating further after the oil crisis. Aided by the prestige gained from his successful forecast, Friedman led increasingly successful criticisms against the Keynesian consensus, convincing not only academics and politicians but also much of the general public with his radio and television broadcasts. The academic credibility of Keynesian economics was further undermined by additional criticism from other monetarists trained in the Chicago school of economics , by the Lucas critique and by criticisms from Hayek's Austrian School.
Keynesian principles fared increasingly poorly on the practical side of economics — by they had been displaced by monetarism as the primary influence on Anglo-American economic policy. A more typical response was to accept some elements of the criticisms while refining Keynesian economic theories to defend them against arguments that would invalidate the whole Keynesian framework — the resulting body of work largely composing New Keynesian economics.
In Alan Blinder wrote about a "Keynesian Restoration", as work based on Keynes's ideas had to some extent become fashionable once again in academia, though in the mainstream it was highly synthesised with monetarism and other neoclassical thinking. In the world of policy making, free market influences broadly sympathetic to monetarism have remained very strong at government level — in powerful normative institutions like the World Bank , the IMF and US Treasury , and in prominent opinion-forming media such as the Financial Times and The Economist.
The global financial crisis of —08 led to public skepticism about the free market consensus even from some on the economic right. In March , Martin Wolf , chief economics commentator at the Financial Times , announced the death of the dream of global free-market capitalism.
Galbraith used the 25th Annual Milton Friedman Distinguished Lecture to launch a sweeping attack against the consensus for monetarist economics and argued that Keynesian economics were far more relevant for tackling the emerging crises. Shiller had begun advocating robust government intervention to tackle the financial crises, specifically citing Keynes. A series of major bailouts were pursued during the financial crisis, starting on 7 September with the announcement that the U.
Government was to nationalise the two government-sponsored enterprises which oversaw most of the U. In October, Alistair Darling , the British Chancellor of the Exchequer , referred to Keynes as he announced plans for substantial fiscal stimulus to head off the worst effects of recession, in accordance with Keynesian economic thought.
By the end of December , the Financial Times reported that "the sudden resurgence of Keynesian policy is a stunning reversal of the orthodoxy of the past several decades. In February Robert J. Shiller and George Akerlof published Animal Spirits , a book where they argue the current US stimulus package is too small as it does not take into account Keynes's insight on the importance of confidence and expectations in determining the future behaviour of businesspeople and other economic agents.
In the March speech entitled Reform the International Monetary System , Zhou Xiaochuan , the governor of the People's Bank of China , came out in favour of Keynes's idea of a centrally managed global reserve currency. Zhou argued that it was unfortunate that part of the reason for the Bretton Woods system breaking down was the failure to adopt Keynes's bancor. Stimulus plans were credited for contributing to a better than expected economic outlook by both the OECD [] and the IMF, [] [] in reports published in June and July Both organisations warned global leaders that recovery was likely to be slow, so counter recessionary measures ought not be rolled back too early.
While the need for stimulus measures was broadly accepted among policy makers, there had been much debate over how to fund the spending. Some leaders and institutions, such as Angela Merkel [] and the European Central Bank , [] expressed concern over the potential impact on inflation, national debt and the risk that a too large stimulus will create an unsustainable recovery.
Among professional economists the revival of Keynesian economics has been even more divisive. Although many economists, such as George Akerlof, Paul Krugman, Robert Shiller, and Joseph Stiglitz, supported Keynesian stimulus, others did not believe higher government spending would help the United States economy recover from the Great Recession. Some economists, such as Robert Lucas , questioned the theoretical basis for stimulus packages. Keynes's economic thinking only began to achieve close to universal acceptance in the last few years of his life.
On a personal level, Keynes's charm was such that he was generally well received wherever he went — even those who found themselves on the wrong side of his occasionally sharp tongue rarely bore a grudge. Austrian School economist Friedrich Hayek was Keynes's most prominent contemporary critic, with sharply opposing views on the economy. The world will be a very much poorer place without him. Lionel Robbins , former head of the economics department at the London School of Economics , who engaged in many heated debates with Keynes in the s, had this to say after observing Keynes in early negotiations with the Americans while drawing up plans for Bretton Woods: This went very well indeed.
Keynes was in his most lucid and persuasive mood: At such moments, I often find myself thinking that Keynes must be one of the most remarkable men that have ever lived — the quick logic, the birdlike swoop of intuition, the vivid fancy, the wide vision, above all the incomparable sense of the fitness of words, all combine to make something several degrees beyond the limit of ordinary human achievement.
This is the most beautiful creature I have ever listened to. Does he belong to our species? Or is he from some other order? There is something mythic and fabulous about him. I sense in him something massive and sphinx like, and yet also a hint of wings. Bertrand Russell [] named Keynes one of the most intelligent people he had ever known, commenting: Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. Keynes's obituary in The Times included the comment: He was a humane man genuinely devoted to the cause of the common good.
As a man of the centre described by some as having the greatest impact of any 20th-century economist, [47] Keynes attracted considerable criticism from both sides of the political spectrum. In the s, Keynes was seen as anti-establishment and was mainly attacked from the right. In the "red s", many young economists favoured Marxist views, even in Cambridge, [34] and while Keynes was engaging principally with the right to try to persuade them of the merits of more progressive policy, the most vociferous criticism against him came from the left, who saw him as a supporter of capitalism.
From the s and onwards, most of the attacks against Keynes have again been from the right. What we need therefore, in my opinion, is not a change in our economic programmes, which would only lead in practice to disillusion with the results of your philosophy; but perhaps even the contrary, namely, an enlargement of them. Your greatest danger is the probable practical failure of the application of your philosophy in the United States.
On the pressing issue of the time, whether deficit spending could lift a country from depression, Keynes replied to Hayek's criticism [] in the following way:. I should say that what we want is not no planning, or even less planning, indeed I should say we almost certainly want more. But the planning should take place in a community in which as many people as possible, both leaders and followers wholly share your own moral position. Moderate planning will be safe enough if those carrying it out are rightly oriented in their own minds and hearts to the moral issue.
Asked why Keynes expressed "moral and philosophical" agreement with Hayek's Road to Serfdom , Hayek stated: Because he believed that he was fundamentally still a classical English liberal and wasn't quite aware of how far he had moved away from it.
His basic ideas were still those of individual freedom. He did not think systematically enough to see the conflicts. He was, in a sense, corrupted by political necessity. According to some observers, [ who?
While Milton Friedman described The General Theory as "a great book", he argues that its implicit separation of nominal from real magnitudes is neither possible nor desirable. Macroeconomic policy, Friedman argues, can reliably influence only the nominal. More to Friedman's taste was the Tract on Monetary Reform , which he regarded as Keynes's best work because of its focus on maintaining domestic price stability. Joseph Schumpeter was an economist of the same age as Keynes and one of his main rivals.
He was among the first reviewers to argue that Keynes's General Theory was not a general theory, but in fact a special case. After Keynes's death Schumpeter wrote a brief biographical piece Keynes the Economist — on a personal level he was very positive about Keynes as a man, praising his pleasant nature, courtesy and kindness. He assessed some of Keynes's biographical and editorial work as among the best he'd ever seen. Yet Schumpeter remained critical about Keynes's economics, linking Keynes's childlessness to what Schumpeter saw as an essentially short term view.
He considered Keynes to have a kind of unconscious patriotism that caused him to fail to understand the problems of other nations. For Schumpeter "Practical Keynesianism is a seedling which cannot be transplanted into foreign soil: Truman was skeptical of Keynesian theorizing: Keynes sometimes explained the mass murder that took place during the first years of communist Russia on a racial basis, as part of the "Russian and Jewish nature", rather than as a result of the communist rule. After a trip to Russia, he wrote in his Short View of Russia that there is "beastliness on the Russian and Jewish natures when, as now, they are allied together".
He also wrote that "out of the cruelty and stupidity of the Old Russia nothing could ever emerge, but Some critics, including Murray Rothbard , have sought to show that Keynes had sympathy with Nazism , and a number of writers described him as antisemitic. Keynes's private letters contain portraits and descriptions, some of which can be characterized as antisemitic, others as philosemitic.
Keynes was a supporter of Zionism , serving on committees supporting the cause. Allegations that he was racist or had totalitarian beliefs have been rejected by Robert Skidelsky and other biographers. As a lifelong pacifist he had initially favoured peaceful containment of Nazi Germany , yet he began to advocate a forceful resolution while many conservatives were still arguing for appeasement. After the war started he roundly criticised the Left for losing their nerve to confront Hitler:. The intelligentsia of the Left were the loudest in demanding that the Nazi aggression should be resisted at all costs.
When it comes to a showdown, scarce four weeks have passed before they remember that they are pacifists and write defeatist letters to your columns, leaving the defence of freedom and civilisation to Colonel Blimp and the Old School Tie, for whom Three Cheers. Keynes has been characterised as being indifferent or even positive about mild inflation.
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However, Keynes was also aware of the dangers of inflation. Lenin is said to have declared that the best way to destroy the Capitalist System was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency.
The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. He was the principal author of a proposal — the so-called Keynes Plan — for an International Clearing Union. The two governing principles of the plan were that the problem of settling outstanding balances should be solved by 'creating' additional 'international money', and that debtor and creditor should be treated almost alike as disturbers of equilibrium. In the event, though, the plans were rejected, in part because "American opinion was naturally reluctant to accept the principle of equality of treatment so novel in debtor-creditor relationships".
The new system is not founded on free-trade liberalisation [] of foreign trade [] but rather on the regulation of international trade, in order to eliminate trade imbalances: Every country would have an overdraft facility in its bancor account at the International Clearing Union. He pointed out that surpluses lead to weak global aggregate demand — countries running surpluses exert a "negative externality" on trading partners, and posed far more than those in deficit, a threat to global prosperity.
His view, supported by many economists and commentators at the time, was that creditor nations may be just as responsible as debtor nations for disequilibrium in exchanges and that both should be under an obligation to bring trade back into a state of balance. Failure for them to do so could have serious consequences. In the words of Geoffrey Crowther , then editor of The Economist , "If the economic relationships between nations are not, by one means or another, brought fairly close to balance, then there is no set of financial arrangements that can rescue the world from the impoverishing results of chaos.
These ideas were informed by events prior to the Great Depression when — in the opinion of Keynes and others — international lending, primarily by the U. Influenced by Keynes, economics texts in the immediate post-war period put a significant emphasis on balance in trade. For example, the second edition of the popular introductory textbook, An Outline of Money , [] devoted the last three of its ten chapters to questions of foreign exchange management and in particular the 'problem of balance'.
However, in more recent years, since the end of the Bretton Woods system in , with the increasing influence of Monetarist schools of thought in the s, and particularly in the face of large sustained trade imbalances, these concerns — and particularly concerns about the destabilising effects of large trade surpluses — have largely disappeared from mainstream economics discourse [] and Keynes' insights have slipped from view. Keynes's early romantic and sexual relationships were exclusively with men.
Attitudes in the Bloomsbury Group , in which Keynes was avidly involved, were relaxed about homosexuality. Keynes, together with writer Lytton Strachey , had reshaped the Victorian attitudes of the Cambridge Apostles: Keynes was also involved with Lytton Strachey, [] though they were for the most part love rivals, not lovers. Keynes had won the affections of Arthur Hobhouse , [] and as with Grant, fell out with a jealous Strachey for it.
Political opponents have used Keynes's sexuality to attack his academic work. Keynes's friends in the Bloomsbury Group were initially surprised when, in his later years, he began dating and pursuing affairs with women, [] demonstrating himself to be bisexual. In , Keynes wrote that he had fallen "very much in love" with Lydia Lopokova , a well-known Russian ballerina and one of the stars of Sergei Diaghilev 's Ballets Russes. Keynes later commented to Strachey that beauty and intelligence were rarely found in the same person, and that only in Duncan Grant had he found the combination.
Forster would later write in contrition about "Lydia Keynes, every whose word should be recorded": Keynes thought that the pursuit of money for its own sake was a pathological condition, and that the proper aim of work is to provide leisure. He wanted shorter working hours and longer holidays for all. Keynes was interested in literature in general and drama in particular and supported the Cambridge Arts Theatre financially, which allowed the institution to become one of the major British stages outside London. During the war , as a member of CEMA Council for the Encouragement of Music and the Arts , Keynes helped secure government funds to maintain both companies while their venues were shut.
Following the war, Keynes was instrumental in establishing the Arts Council of Great Britain and was its founding chairman in Unsurprisingly, from the start the two organisations that received the largest grants from the new body were the Royal Opera House and Sadler's Wells. Like several other notable British authors of his time, Keynes was a member of the Bloomsbury Group.
Eliot discussed religion at a dinner party, in the context of their struggle against Victorian era morality. Keynes was ultimately a successful investor, building up a private fortune. His assets were nearly wiped out following the Wall Street Crash of , which he did not foresee, but he soon recouped. The sum had been amassed despite lavish support for various good causes and his personal ethic which made him reluctant to sell on a falling market, in cases where he saw such behaviour as likely to deepen a slump.
In part on the basis of these papers, Keynes wrote of Newton as "the last of the magicians.
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Keynes was a lifelong member of the Liberal Party , which until the s had been one of the two main political parties in the United Kingdom, and as late as had often been the dominant power in government. Keynes had helped campaign for the Liberals at elections from about , yet he always refused to run for office himself, despite being asked to do so on three separate occasions in From , when Lloyd George became leader of the Liberals, Keynes took a major role in defining the party's economic policy, but by then the Liberals had been displaced into third party status by the Labour Party.
A by-election for the seat was to be held due to the illness of an elderly Tory , and the master of Magdalene College had obtained agreement that none of the major parties would field a candidate if Keynes chose to stand. Keynes declined the invitation as he felt he would wield greater influence on events if he remained a free agent.
Keynes was a proponent of eugenics. He served as director of the British Eugenics Society from to As late as , shortly before his death, Keynes declared eugenics to be "the most important, significant and, I would add, genuine branch of sociology which exists. Keynes once remarked that "the youth had no religion save communism and this was worse than nothing. In Keynes had the following to say on Marxism: How can I accept the Communist doctrine, which sets up as its bible, above and beyond criticism, an obsolete textbook which I know not only to be scientifically erroneous but without interest or application to the modern world?
John Maynard Keynes
How can I adopt a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeoisie and the intelligentsia , who with all their faults, are the quality of life and surely carry the seeds of all human achievement? Even if we need a religion, how can we find it in the turbid rubbish of the red bookshop? It is hard for an educated, decent, intelligent son of Western Europe to find his ideals here, unless he has first suffered some strange and horrid process of conversion which has changed all his values.
Keynes was a firm supporter of women's rights and in became vice-chairman of the Marie Stopes Society which provided birth control education. He also campaigned against job discrimination against women and unequal pay. He was an outspoken campaigner for reform of the law on homosexuality. Throughout his life, Keynes worked energetically for the benefit both of the public and his friends; even when his health was poor, he laboured to sort out the finances of his old college.
Keynes suffered a series of heart attacks , which ultimately proved fatal. They began during negotiations for the Anglo-American loan in Savannah, Georgia , where he was trying to secure favourable terms for the United Kingdom from the United States, a process he described as "absolute hell". Both of Keynes's parents outlived him: Keynes's brother Sir Geoffrey Keynes — was a distinguished surgeon, scholar, and bibliophile. His nephews include Richard Keynes — , a physiologist, and Quentin Keynes — , an adventurer and bibliophile.
Keynes had no children, his widow, Lydia Lopokova , died in Most of his professional colleagues also accepted his views. Interestingly, Keynes believed that the kinds of policies he advocated would work best in a totalitarian society. In his preface to the German edition of General Theory , Keynes wrote:. Nevertheless the theory of output as a whole, which is what the following book purports to provide, is much more easily adapted to the conditions of a totalitarian state, than is the theory of production and distribution of a given output produced under conditions of free competition and a large measure of laissez-faire.
The Keynesian model was a core part of economics textbooks from the late s until the late s. But as economists have become more concerned about economic growth , and more informed about inflation and unemployment, the Keynesian model has lost prominence. In he suffered a severe heart attack.
Two years later, though not completely recovered, he returned to teaching at Cambridge, wrote three influential articles on war finance entitled How to Pay for the War ; later reprinted as Collected Writings , vol. He also played a prominent role at the Bretton Woods Conference in His last major public service was his negotiation in the autumn and early winter of of a multibillion-dollar loan granted by the United States to Britain. Keynes died the following year. We welcome suggested improvements to any of our articles.
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Please note that our editors may make some formatting changes or correct spelling or grammatical errors, and may also contact you if any clarifications are needed. The Editors of Encyclopaedia Britannica. Aug 22, See Article History. Background and early career Keynes was born into a moderately prosperous family. Learn More in these related Britannica articles: In a treatise on money published in , he attributed to the 16th-century price revolution and profit inflation a crucial role in the primitive accumulation of capital and in the birth of capitalism itself.
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