Anyone with the wherewithal to suffer through Economics 101 has
encountered John Maynard Keynes, the 20th-century British economist
who transformed his profession with his 1936 work "General Theory of
Employment, Interest, and Money."
The book helped spark the Keynesian revolution, which put forth
the seemingly radical notion that activist government policies -
particularly fiscal policy - were appropriate to "manage" a
country's economy and promote full employment.
For this and other contributions, Keynes is considered the father
of modern macroeconomics, and stands alongside Adam Smith and David
Ricardo as history's greatest economic thinkers. But Robert
Skidelsky, a University of Warwick historian and author of a massive
three-volume biography of Keynes, finds such accolades wanting. In
the concluding volume "Fighting for Freedom," which covers the last
decade of the economist's life (1937-1946), Skidelsky provides a
masterly chronicle of Keynes's legacy as a statesman, an orator, and
a patriot for Britain.
Against the backdrop of World War II, Keynes fought a parallel
war in which the key strategists were not generals, but economists
battling for postwar economic supremacy. His foe: the United States,
then an upstart economic superpower.
Much of the book is devoted to Keynes's five "missions" to the
United States, during which he negotiated American economic
assistance to Britain and, together with US Treasury official Harry
Dexter White, helped shape the rules of the postwar global economy.
Already a world-renowned economist, Keynes made for a peculiar
government envoy. His reputation made him something of a hero to the
young New Deal economists in Washington, but his intellectual
condescension grated on US negotiators. Moreover, despite their
support for Britain against Germany, the Americans viewed the
British imperial tradition with deep misgivings and, according to
Skidelsky, were determined that "the United States, not Britain,
would be the leader of the postwar free world." In this context, the
Americans were wary of Keynes, who "with his subtle intelligence
epitomised the traps which a declining civilization could set for a
Ultimately, even Keynes's intellectual firepower was insufficient
to overcome stark geopolitical realities. With Britain weakened and
bankrupt by war, the United States held all the trump cards. The
British ultimately obtained a loan from the United States (not a
grant, as Keynes first sought), and were forced to give up the right
to discriminate against US imports.
In letters to friends and colleagues, a frustrated Keynes
described the experience as "the most harassing and exhausting
negotiation you can imagine.... [The Americans] mean us no harm -
but their minds are so small, their prospect so restricted, their
knowledge so inadequate, their obstinacy so boundless and their
legal pedantries so infuriating."
Such recriminations miss Keynes's own tactical misfires. Keynes
attached "enormous significance to the use of language as an element
of power," explains Skidelsky, yet at times his eloquence backfired. …