United KingdomWho was John Maynard Keynes?
John Maynard Keynes was a British economist, civil servant and author, born in Cambridge in 1883. He taught at King's College, Cambridge, and worked for the British Treasury, representing it at the 1919 Paris peace conference before resigning over the reparations imposed on Germany. His book The Economic Consequences of the Peace (1919) made him widely known. His later work, The General Theory of Employment, Interest and Money (1936), argued that market economies can remain stuck below full employment and that public policy should support total spending. He helped design the postwar Bretton Woods monetary system in 1944 and died in 1946.
Political views
Argued that the main faults of the economy of his time were its failure to provide full employment and its unequal distribution of wealth and incomes.
Source: marxists.orgProposed a fairly comprehensive socialisation of investment, combined with cooperation between public authority and private initiative, as the route to full employment.
Source: marxists.orgStated that it was not ownership of the instruments of production that the state needed to assume, and defended individualism as compatible with his program.
Source: marxists.orgSupported deficit spending in downturns and opposed general wage cuts as a remedy for interwar unemployment.
Source: econlib.orgSupported redistributive taxation such as death duties, arguing that higher consumption could favor the growth of capital.
Source: marxists.orgCriticized the reparations demanded of Germany after the First World War as likely to keep it poor and politically unstable.
Source: gutenberg.orgHelped shape the postwar system of fixed exchange rates and the International Monetary Fund at the 1944 Bretton Woods conference.
Source: econlib.org
Legacy
Keynesian economics guided fiscal and monetary policy in many Western countries from the 1940s to the 1970s and returned to prominence during later recessions, including the 2008 financial crisis. Admirers credit him with explaining how deep slumps persist and with providing tools to fight unemployment. Critics, including Friedrich Hayek and later monetarists such as Milton Friedman, argued that his ideas encouraged inflation, public debt and excessive faith in government management. Others note that Keynes himself saw markets as workable once full employment was reached.
In their words
The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.