John Maynard Keynes. [149], Keynes's friends in the Bloomsbury Group were initially surprised when, in his later years, he began pursuing affairs with women,[150] demonstrating himself to be bisexual. [37] The work, Treatise on Money, was published in 1930 in two volumes. although Keynes's own inclinations drew him towards philosophy – especially the ethical system of G. E. Moore. [23] He enjoyed his work at first, but by 1908 had become bored and resigned his position to return to Cambridge and work on probability theory, at first privately funded only by two dons at the university – his father and the economist Arthur Pigou. GCSE History. John Maynard Keynes was born on June 5, 1883 in Cambridge to economist father John Neville Keynes and social reformer mother Florence Ada Keynes. 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.[42]. [159], 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. John Maynard Keynes was a British economist who lived from 1883 to 1946 and is often regarded as one of the most influential economists to have ever lived due to his stupendous contributions towards macroeconomic theories. [149] One line of attack held that he was uninterested in the long term ramifications of his theories because he had no children. Be on the lookout for your Britannica newsletter to get trusted stories delivered right to your inbox. [12], According to the economic historian and biographer Robert Skidelsky, Keynes's parents were loving and attentive. [159][160] In her novel Mrs Dalloway (1925), Woolf bases the character of Rezia Warren Smith on Lopokova. 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. The sum had been amassed despite lavish support for various charities and philanthropies, and his ethic which made him reluctant to sell on a falling market, in cases where he saw such behaviour as likely to deepen a slump. [8], When Time magazine included Keynes among its Most Important People of the Century in 1999, it stated that "his radical idea that governments should spend money they don't have may have saved capitalism. in 1909, Keynes became a civil servant, taking a job with the India Office in Whitehall. Allegations that he was racist or had totalitarian beliefs have been rejected by Robert Skidelsky and other biographers. [39] Apart from Great Britain, Keynes's attention was primarily focused on the United States. [108] Keynes's speech at the closing of the Bretton Woods negotiations was received with a lasting standing ovation, rare in international relations, as the delegates acknowledged the scale of his achievements made despite poor health. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. John Maynard Keynes (Source: Public Domain). [168] This was a controversial decision at the time, as stocks were considered high-risk and the centuries-old endowment had traditionally been invested in agricultural land and fixed income assets like bonds. Other prominent economic commentators who have argued for Keynesian government intervention to mitigate the financial crisis include George Akerlof,[83] J. Bradford DeLong,[84] His performance may have marked Keynes for a public career, but the Versailles Peace Conference changed his aspirations. As the key 1968 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. [140] Keynes had been in relationships while at Eton and Cambridge; significant among these early partners were Dilly Knox and Daniel Macmillan. John Maynard Keynes, with his wife, Lydia Lopokova, in the 1920s, as some of the baleful results he warned of in “The Economic Consequences of the Peace” were playing out. While it was addressed chiefly to the British Government, it also contained advice for other nations affected by the global recession. In the late 1930s and 1940s, economists (notably John Hicks, Franco Modigliani, and Paul Samuelson) attempted to interpret and formalise Keynes's writings in terms of formal mathematical models. In addition to economic analysis, the book contained pleas to the reader's sense of compassion: I cannot leave this subject as though its just treatment wholly depended either on our pledges or on economic facts. [169] Keynes was granted permission to invest a small minority of assets in stocks, and his adroit management resulted this portion of the endowment growing to become the majority of the endowment's assets. Keynes", "Dividends from Schumpeter's Noble Failure", "The Immoral Moral Scientist. "[96] [154] In the early years of his courtship, he maintained an affair with a younger man, Sebastian Sprott, in tandem with Lopokova, but eventually chose Lopokova exclusively. By 1894, Keynes was top of his class and excelling at mathematics. A copy was sent to the newly elected President Franklin D. Roosevelt and other world leaders. "[10] In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals. [60] Keynesian ideas became so popular that some scholars point to Keynes as representing the ideals of modern liberalism, as Adam Smith represented the ideals of classical liberalism. [145] The artist Duncan Grant, whom he met in 1908, was one of Keynes's great loves. Keynes's experience at Versailles was influential in shaping his future outlook, yet it was not a successful one. [118] He said the work expressed "the attitude of a decaying civilisation". His father, John Neville Keynes, was an economist and a lecturer in moral sciences at the University of Cambridge and his mother Florence Ada Keynes a local social reformer. "Keynes" redirects here. In the 1920s, Keynes was seen as anti-establishment and was mainly attacked from the right. Although Keynes could not offer a theoretical refutation of his colleagues’ opinions, he agitated for public works nevertheless. John Maynard Keynes ' Absolute Income Hypothesis 1481 Words 6 Pages The basis behind much of macroeconomic consumption theory rests with John-Maynard Keynes’ Absolute Income Hypothesis, described in The General Theory of Employment, Interest and Money (1936). [48], 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.[110]. His father, John Neville Keynes, was an economist and later an academic administrator at the King’s College, Cambridge. 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. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946. expressed concern over the potential impact on inflation, national debt and the risk that a too large stimulus will create an unsustainable recovery. He considered Keynes to have a kind of unconscious patriotism that caused him to fail to understand the problems of other nations. Please select which sections you would like to print: Corrections? Keynes argued that full employment could not always be reached by making wages sufficiently low. [46], In late 1965 Time magazine ran a cover article with a title comment from Milton Friedman (later echoed by U.S. President Richard Nixon), "We are all Keynesians now". 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. 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. [122][123] Scholars have suggested that these reflect clichés current at the time that he accepted uncritically, rather than any racism. First prepared as a lecture for schoolchildren in 1928, the article predicted a coming age of leisure and economic abundance in the not-too-distant future. He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in 1936. [48], 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. Winston Churchill called them “a sad story of complicated idiocy.” Essentially, they meant demanding from Germany either goods—which would have dislocated industry in the recipient countries—or money. His last major public service was his negotiation in the autumn and early winter of 1945 of a multibillion-dollar loan granted by the United States to Britain. The policy of reducing Germany to servitude for a generation, of degrading the lives of millions of human beings, and of depriving a whole nation of happiness should be abhorrent and detestable, – abhorrent and detestable, even if it was possible, even if it enriched ourselves, even if it did not sow the decay of the whole civilized life of Europe. It was only later, in The General Theory of Employment, Interest and Money, that Keynes provided an economic basis for government jobs programs as a solution to high unemployment. The General Theory argues that demand, not supply, is the key variable governing the overall level of economic activity. Keynesian economics were officially discarded by the British Government in 1979, but forces had begun to gather against Keynes's ideas over 30 years earlier. A biography of John Maynard Keynes. [42] By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. He wanted shorter working hours and longer holidays for all. Keynes's magnum opus, The General Theory of Employment, Interest and Money was published in 1936. [32] He attacked the post-World War I deflation policies with A Tract on Monetary Reform in 1923[32] – a trenchant argument that countries should target stability of domestic prices, avoiding deflation even at the cost of allowing their currency to depreciate. Keynes believed the classical theory was a "special case" that applied only to the particular conditions present in the 19th century, his theory being the general one. Keynes was the first born, and was followed by two more children – Margaret Neville Keynes in 1885 and Geoffrey Keynes in 1887. He then returned to Cambridge, where he taught economics until 1915. 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". Nací en el 5 de Junio de 1883, Cambridge. The Means to Prosperity contains one of the first mentions of the multiplier effect. Economic Possibilities for our Grandchildren ranks among the best-known contributions in the economic writings of John Maynard Keynes. In the 1917 King's Birthday Honours, Keynes was appointed Companion of the Order of the Bath for his wartime work,[29] and his success led to the appointment that would have a huge effect on Keynes's life and career; Keynes was appointed financial representative for the Treasury to the 1919 Versailles peace conference. 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 1937, requiring him to take long periods of rest. 9, 1972), and served once more in the Treasury as an all-purpose adviser. 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. To Keynes's dismay, Lloyd George and Clemenceau were able to pressure Wilson to agree to include pensions in the reparations bill. During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. 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. [31] The secretary of the Treasury was delighted to hear Keynes had amassed enough to provide a temporary solution for the British Government. Keynes responded by writing The Economic Consequences of Mr. Churchill and continued to argue against the gold standard until Britain finally abandoned it in 1931.[32]. His most important work, The General Theory of Employment, Interest and Money (1935–36), advocated a remedy for economic recession based on a government-sponsored policy of full employment. Read the essential details about John Maynard Keynes that includes images, quotations and the main facts of his life. Virginia Woolf's biographer tells an anecdote of how Virginia Woolf, Keynes, and T. S. Eliot discussed religion at a dinner party, in the context of their struggle against Victorian era morality. 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. [47], Although Keynes has been widely criticized – 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. Keynes’s reputation at Cambridge was quite different. In January 1915 Keynes took up an official government position at the Treasury. His experience there formed the basis of his first major work, Indian Currency and Finance (1913), a definitive examination of pre-World War I Indian finance and currency. Throughout his life Keynes was to cherish the affection and respond to the influence of this group. In 1924 Keynes wrote an obituary for his former tutor He was said to be an atheist.[19][20]. [69], Keynesian principles fared increasingly poorly on the practical side of economics – by 1979 they had been displaced by monetarism as the primary influence on Anglo-American economic policy. For his father, see, Keynesian economics out of favour 1979–2007, Marie Christine Duggan (2013) "Taking Back Globalization: A China-United States Counterfactual Using Keynes's 1941 International Clearing Union." [166] According to one biographer, "he was never able to take religion seriously, regarding it as a strange aberration of the human mind. Much of the post-crisis discussion reflected Keynes's advocacy of international coordination of fiscal or monetary stimulus, and of international economic institutions such as the IMF and the World Bank, which many had argued should be reformed as a "new Bretton Woods", and should have been even before the crises broke out. Aside from a few months spent on holidays with family and friends, Keynes continued to involve himself with the university over the next two years. Keynes declined the invitation as he felt he would wield greater influence on events if he remained a free agent. 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. [138] They are receiving some attention again in the wake of the financial crisis of 2007–08. [161] E. M. Forster would later write in contrition about "Lydia Keynes, every whose word should be recorded":[162] "How we all used to underestimate her". Official from the late 1980s sections you would like to print: Corrections soon recouped his time, Keynes a... September 2011 eight and a natural product of an economic slump crisis of 2007–2008 sparked resurgence... 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