John Maynard Keynes (1883–1946) British economist, public servant, and writer
Son of a Cambridge logician and political economist, John Maynard Keynes was educated at Eton and King’s College, Cambridge. In 1906, he sat for the civil service exam and placed second, receiving one of his lowest scores in economics. He took a position in the India Office and spent much of his spare time writing a dissertation on probability, which he submitted for a fellowship at Cambridge. It was subsequently published as A Treatise on Probability (1921). He became a permanent fellow of King’s College in 1911 and remained active in the life of the college throughout the rest of his life, combining the roles of lecturer in economics, bursar of King’s College, and editor of the Economic Journal.
During World War I, Keynes served in the British Treasury and after the war took part in the peace negotiations at Versailles. He resigned in protest over the severity of the reparations being demanded, believing they would lead to economic collapse. He developed his objections in The Economic Consequences of the Peace (1919), a best-selling polemic that was translated into many languages and gained him worldwide fame.
Keynes’s other books included Indian Currency and Finance (1913), A Tract on Monetary Reform (1923), and A Treatise on Money (1931). The Treatise, in which Keynes began to develop the theory for which he would become famous, received a harsh review by Friedrich Hayek from the London School of Economics. During the 1930s, economists at the LSE and Cambridge vigorously debated the appropriate remedy for prolonged unemployment. LSE economists thought the problem was that wages needed to adjust to correct problems of the labor market. Keynes and other Cambridge economists believed the problem was a deficiency of aggregate demand. The LSE solution was one of laissezfaire: Tolerate unemployment and allow wages to adjust downward. The Keynesian solution was to boost aggregate demand through deficit financed government spending. In an open letter published in the New York Times in 1933, Keynes urged Franklin D. Roosevelt to adopt an expansionary policy for the United States. In The General Theory of Money, Interest and Prices (1936), Keynes attempted to provide theoretical justification for his policy prescription. Keynes’s ideas have often been described as a blueprint for the NEW DEAL, but his influence was more indirect. Franklin Roosevelt’s advisers were aware of his work, but FDR was reported to have disliked Keynes personally.
Keynes was the chief British representative at Bretton Woods in 1944 where, along with Harry Dexter White, a system of fixed exchange rates was formulated that became known as the BRETTON WOODS SYSTEM; its fixed parities would remain in place until the early 1970s. Throughout his life, Keynes maintained an interest in the arts and the artistic life. Keynes established and largely financed the Cambridge Arts Theater and was a trustee of the National Gallery. After years of suffering with heart disease, Keynes died at his home in Sussex in 1946.
- Colander, David C., and Harry Landreth. The Coming of Keynesianism to America: Conversations with the Founders of Keynesian Economics. Brookfield, Vt.: E. Elgar, 1996.
- Moggridge, Donald. Keynes. Toronto: University of Toronto Press, 1993.
- Skidelsky, Robert. John Maynard Keynes: Hopes Betrayed, 1883–1920. London: Macmillan, 1983.
- ———. John Maynard Keynes: The Economist as Savior, 1920–1937. London: Macmillan, 1992.