John Maynard Keynes
Article abstract: Keynes’s seminal work, The General Theory of Employment, Interest, and Money, created a school that dominated economic thought in the mid-twentieth century and that continues to exercise a potent influence. Concern for world economic health, however, made him equally important in the arena of public affairs from World War I to the creation of the International Monetary Fund and World Bank after World War II.
John Maynard Keynes was born June 5, 1883, in Cambridge, England. His mother, Florence Ada Brown, came from a family of Scots whose relatives included the poet Robert Burns. His father, John Neville Keynes, a Pembroke Fellow lecturing in logic and political economy at Cambridge, traced his lineage to land grants in Cambridgeshire from the time of William the Conqueror (1066). John Maynard was the first child; a sister, Margaret, and brother, Geoffrey, completed the family by 1887.
His quick mind showed at age three, when Keynes mastered the alphabet. Before age nine, he was enrolled in a day school where he impressed few except in mathematics and vocabulary. By age eleven, however, he was first in his class. Although his family was constantly concerned about his health, Keynes participated in various physical activities, including daring bicycle riding (which resulted in a finger injury over which he was self-conscious throughout his life). In 1897, to the delight of his parents, Keynes won a scholarship to Eton with a first in mathematics. Following his graduation from Eton, Keynes entered King’s College, Cambridge, in October, 1902, and completed his exams in June, 1906. He then worked on currency and finance in the India Office until returning to Cambridge as a lecturer in economics in 1909. He was awarded a fellowship in 1910, which he retained until his death. A Cambridge undergraduate, Charles R. Fay, was impressed by Keynes’s appearance—his mustache and striking waistcoat—the day they met. Keynes’s penchant for fancy dress was evident even at Eton, where he acquired a purple coat and regularly wore a lapel flower. The mustache was a trademark until his death. In August, 1925, Keynes married Lydia Lopokova (1891-1981), a Russian ballerina, who helped ease the pain of his illnesses and the stress of his multifaceted persona and career.
In October, 1911, Keynes became the editor of the Economic Journal, a position that he would hold for thirty-three years and one that permitted him to support the work of numerous young economists. His first major published work was Indian Currency and Finance (1913). This work resulted from his experience in the India Office during his brief absence from Cambridge from 1906 to 1909.
The path to international fame began in early August, 1914, when Keynes was consulted about the gold standard three days before British entry into World War I. Both David Lloyd George, Chancellor of the Exchequer, and Herbert Asquith, the prime minister, utilized Keynes’s ideas in setting national fiscal policy during the war. In 1915, Keynes was hired by the Exchequer to join its finance team. In that role, he consulted and negotiated with Great Britain’s allies on matters of loans, currency, and economic planning during the war and made his first trip to the United States. For his efforts, Keynes was made a Commander of the Bath (K.C.B.) in 1919. He also acquired his permanent London residence, located in Bloomsbury, at 46 Gordon Square.
The British Treasury named Keynes its chief representative to the Versailles treaty negotiations in 1919. He was not part of the reparations commission, although he did negotiate food for Austria and Germany in exchange for merchant ships and gold. The rejection of his proposal for an international fund for rebuilding, rather than punitive reparations, led to his resignation in June. In early December, he published The Economic Consequences of the Peace (1919). The book criticized the self-defeating economic policies of the Versailles treaty such as the reparations payments demanded of Germany and other Central Powers and restrictions on merchant fleets. Keynes predicted that other countries would not permit the Germans, for example, to sell the products of their industry without tariff restrictions. Therefore, the money to pay reparations would not be readily available. The Economic Consequences of the Peace was an instant, worldwide success. Within a short time, it was translated into German, French, Flemish, Danish, Italian, Romanian, Russian, and Japanese, among other languages, and sold more than 140,000 copies by 1924.
In 1923, Keynes was nominated for a Nobel Peace Prize as a result of his efforts in the area of peaceful international economic cooperation. Such activities included advising Carl Melchior, German finance director, on monetary policies, and British and German officials on inflation; reporting on the Genoa economic conference for The Manchester Guardian (1922); and publishing a sequel book on Versailles, A Revision of the Treaty (1922), and A Tract on Monetary Reform (1923), in which he argued for managed currencies.
His two-volume A Treatise on Money, the most scholarly of Keynes’s writing, was published late in 1930. The seven books into which he divided the...
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