John Maynard Keynes

Keynes, John Maynard, Baron Keynes of Tilton

John Maynard Keynes, Baron Keynes of Tilton (kānz), 1883–1946, English economist and monetary expert, studied at Eton and Cambridge.

Early Career and Critique of Versailles

Keynes served (1906–08) in the India Office of the civil service, where he was concerned with problems of Indian currency. He subsequently returned to Cambridge, where he taught economics until 1915. During World War I, he worked in the Treasury, advancing in 1919 to the position of principal British treasury representative. After accompanying British prime minister Lloyd George to the peace conference ending the war, however, he resigned in protest of what he considered the inequitable economic provisions of the Versailles Treaty. His Economic Consequences of the Peace (1919) vividly presented his views and won him world fame. Keynes criticized the Versailles Treaty for its vindictiveness, specifically the impossibly high reparations levied on the Germans, and for its abandonment of the relatively free pre-1914 economy based on gold and low tariffs. He foresaw that German economic weakness stemming from the Versailles provisions would involve the whole of Europe in ruin.

Departure from Classical Economics

Keynes's departure from classical concepts of laissez-faire dated from the mid-1920s, when he formulated the Liberal party's program to promote employment by a program of government spending on public works. Keynes came to believe that such a program would increase national purchasing power as well as foster employment in complementary industries. For the sake of full employment Keynes also modified his classical belief in international free trade. His ideas, based on large-scale government economic planning, are best expressed in his chief work, The General Theory of Employment, Interest, and Money (1936). Coming at a time when many nations had been racked by depressed economies, the book offered a sharp critique of laissez-faire economic policies and argued that central government needed to step in, particularly during periods of chronic unemployment. Other works by Keynes from this period are the Tract on Monetary Reform (1923) and the Treatise on Money (1930).

Later Career

In the years following 1936, Keynes spent most of his time in public service, producing several articles on the subject of war financing. During World War II he was a consultant to the chancellor of the exchequer and a director of the Bank of England. He was raised to the peerage in 1942. Keynes was influential at Bretton Woods (1944) in the proposals for the establishment of a world bank to stimulate growth in underdeveloped areas.

Influence

Keynesian economics stands as the most influential economic formulation of the 20th cent., though its ascendency was vigorously challenged by monetarism in the late 20th cent. His theories were widely revived during the economic crisis of 2008–9. Keynes's ideas have appealed to both practical politicians and theoretical economists with equal force, perhaps because he was a steadfast pragmatist, attacking the real problems of national employment and income while still remaining faithful to the requirements of rigorous economic thought. Although he favored controlled investment and an active public sector, he never wavered in his faith in the capitalist market economy. In Keynesian theory, government action is designed to stimulate the market, not to eliminate it.

See Keynes's Collected Writings (30 vol., 1971–80), biographies by R. Skidelsky (3 vol., 1986–2001) and P. Clarke (2009); G. Fletcher, The Keynesian Revolution and Its Critics (1987); P. Clarke, The Keynesian Revolution in the Making, 1924–1936 (1989); R. Skidelsky, Keynes: The Return of the Master (2009); N. Wapshott, Keynes Hayek (2011).

The Columbia Encyclopedia, 6th ed. Copyright© 2015, The Columbia University Press.

John Maynard Keynes: Selected full-text books and articles

Keynes: A Critical Life By David Felix Greenwood Press, 1999
Monetary Reform By John Maynard Keynes Harcourt, Brace, 1924
Essays in Persuasion By John Maynard Keynes Harcourt Brace, 1932
The Fall and Rise of Keynesian Economics By John Eatwell; Murray Milgate Oxford University Press, 2011
Three Great Economists: Smith, Malthus, Keynes By D. D. Raphael; Donald Winch; Robert Skidelsky Oxford University Press, 1997
Librarian’s tip: "Keynes" begins on p. 219
A History of Economic Thought: Social Ideals and Economic Theories from Quesnay to Keynes By Overton H. Taylor McGraw-Hill, 1960
Librarian’s tip: Chap. 17 "Recent Developments of New Economic Theories Relevant to Problems of Public Policy: Keynesian Economics"
The End of an Epoch: Reflections on Contemporary History By A. L. Rowse MacMillan, 1947
Librarian’s tip: Chap. XII "Socialism and Mr. Keynes"
Post Keynesian Monetary Economics By Stephen Rousseas M.E. Sharpe, 1986
Librarian’s tip: "Keynes's Early Views on the Distribution of Wealth" begins on p. 4 and "Keynes on Uncertainty" begins on p. 16
Keynes' Economic Program, Social Institutions, Ideology, and Property Rights By Henry, John F Journal of Economic Issues, Vol. 35, No. 3, September 2001
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