John Maynard Keynes
|John Maynard Keynes|
John Maynard Keynes (right) and Harry Dexter White at the Bretton Woods Conference
June 5, 1883|
|Died||April 21, 1946
Tilton, Sussex, UK
|Education||Eton College and King's College, Cambridge|
|Parent(s)||John Neville Keynes, Florence Ada Brown|
John Maynard Keynes, 1st Baron Keynes, CB (5 June 1883 – 21 April 1946) was a British economist. His ideas, called Keynesian economics, had a big impact on modern economic and political theory. His ideas also had a big impact on many governments' tax and economic policies. He said governments should use tax and banking measures to stop the effects of economic recessions, depressions and booms. He is one of the fathers of modern theoretical macroeconomics.
Personal and marital life
John Maynard Keynes was born at 7 Melville Road, Cambridge, England. His father was John Neville Keynes, an economics lecturer at Cambridge University. His mother was Florence Ada Brown, a successful author and a social reformer. His younger brother, Geoffrey Keynes (1887–1982) was a surgeon and bibliophile (book lover). His younger sister Margaret (1890–1974) married the Nobel Prize-winning physiologist Archibald Hill.
Keynes first went to King’s College, Cambridge, in 1902. At first he studied mathematics. Later he studied economics under A.C. Pigou and Alfred Marshall. People think Professor Marshall prompted Keynes to change his studies from mathematics and classics to economics. Keynes received his B.A. in 1905 and his M.A. in 1908.
One of his great loves was the artist Duncan Grant, whom he met in 1908. Keynes was also involved with the writer Lytton Strachey. Keynes appeared to turn away from homosexual relationships around the time of the first World War. In 1918, he met Lydia Lopokova, a well-known Russian ballerina. Keynes and Lopokova married in 1925.
Keynes was a successful investor and he built up a big fortune. He nearly lost all of his money after the Stock Market Crash of 1929. Later he re-built his fortune.
He enjoyed collecting books: for example, he collected and protected many of Isaac Newton's papers.
Lord Bertrand Russell said Keynes was the most intelligent person he had ever known. Lord Russell said: "Every time I argued with Keynes, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool."
Keynes accepted a lectureship at Cambridge in economics funded personally by Alfred Marshall. Soon he was appointed to the Royal Commission on Indian Currency and Finance, where he was able to put economic theory into practice.
During World War I he worked for the Adviser to the Chancellor of the Exchequer and to the Treasury on Financial and Economic Questions.
Keynes also attended the Conference on the Versailles Treaty to end World War I. He wrote The Economic Consequences of the Peace in 1919, and A Revision of the Treaty in 1922. In his books he said that the reparations which Germany was being made to pay would ruin the German economy and would lead to further fighting in Europe. These predictions were shown to be true when the German economy suffered in the hyperinflation of 1923. Reparations were only completed in 2010.
Keynes's magnum opus (Latin for "Great Work", meaning his most famous book) was the General Theory of Employment, Interest and Money. The General Theory was published in 1936. The ideas in that book were very different from classical economics.
Historians agree that Keynes influenced U.S. president Roosevelt's New Deal, but disagree as to what extent. Spending more the government earned in taxes (called deficit spending) was used in the New Deal from 1938. But the idea had been agreed to by President Herbert Hoover. Few senior economists in the U.S. agreed with Keynes in the 1930s. With time, however, his ideas became more widely accepted.
During World War II, Keynes wrote a book titled How to Pay for the War. He said the war effort should be paid for by higher taxes. He did not like deficit spending because he wanted to avoid inflation.
Keynes died of a heart attack at his holiday home in Tilton, East Sussex. His heart problems were made worse by the strain of working on post-war international financial problems. He died soon after he arranged a guarantee of an Anglo-American loan to Great Britain. Keynes' father, John Neville Keynes (1852–1949) outlived his son by three years. Keynes's brother Sir Geoffrey Keynes (1887–1982) was a distinguished surgeon, scholar and bibliophile. His nephews include Richard Keynes (born 1919) a physiologist; and Quentin Keynes (1921–2003) an adventurer and bibliophile. Keynes did not have children.
These people influenced Keynes:
- Knut Wicksell
- Arthur C. Pigou
- Alfred Marshall
- Adam Smith
- David Ricardo
- Dennis Robertson
- Karl Marx
- Thomas Malthus
- Michal Kalecki
- Keynesian economics or Keynesianism
- Michał Kalecki
- Simon Kuznets
- Paul Samuelson
- John Hicks
- John Kenneth Galbraith
- G.L.S. Shackle
- Silvio Gesell
Friedrich Hayek, one of Keynes's most prominent critics
46 Gordon Square, where Keynes would often stay while in London. Following his marriage, Keynes took out an extended lease on Tilton House, a farm in the countryside near Brighton, which became the couple's main home when not in the capital.
King's College, Cambridge. Keynes's grandmother wrote to him saying that, since he was born in Cambridge, people will expect him to be clever.
Keynes's colleague, David Lloyd George. Keynes was initially wary of the "Welsh Wizard," preferring his rival Asquith, but was impressed with Lloyd George at Versailles; this did not prevent Keynes from painting a scathing picture of the then-prime minister in his Economic Consequences of the Peace.
Keynes argued against a return to the gold standard at parity with pre-war sterling valuation after World War I
Economist Manmohan Singh, the then prime minister of India, spoke strongly in favour of Keynesian fiscal stimulus at the 2008 G-20 Washington summit.
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