JOHN MAYNARD KEYNES: BIOGRAPHY, THEORIES AND WORKS - ECONOMY - 2025

John Maynard Keynes (1883 - 1946) was a British economist, financier, and journalist. His theories influenced macroeconomic thought and political economy in the 20th century.

He was the creator of the economic trend known as Keynesianism, opposed to neoclassical thinking in which it was proposed that the free market tends to total employment of the population, as long as wage demands are flexible.

By Official Portrait, via Wikimedia Commons

Keynes proposed that aggregate demand influences total economic activity and can generate periods of unemployment. For this reason, it recommended that the States apply fiscal policies as a way to overcome recessions and depressions.

According to his postulate, governments should invest in public works, to promote employment during crises and thus seek to bring the economy back to equilibrium, despite the fact that a budget deficit may be generated in the State.

This idea was embodied in his most famous work The General Theory of Employment, Interest, and Money, which he developed between 1935 and 1936. He believed that increased consumption, lower interest rates, and public investment would regulate the economy.

His approaches were accepted by almost all the major economies of the Western world before 1940. Between this date and 1980, Keynes's theories were included in most economics texts in the world.

He was a critic of the economic policies adopted by the winning states of the First World War, since he considered, as indeed it happened, that the terms of the Peace of Paris would lead the world economy to a general crisis.

He was also interested in journalism and was editor of some specialized economic media in Great Britain, such as The Economic Journal. John Maynard Keynes was always linked to academic life, especially at Cambridge, his alma mater.

Biography

Early years

John Maynard Keynes was born in Cambridge on June 5, 1883. His parents were John Neville Keynes and Florence Ada Keynes. The young man was the first of three siblings and grew up in an environment highly stimulating for his intellect.

His father was a politician, philosopher, professor at Cambridge (1884 -1911) and secretary of the same university (1910 - 1925). While her mother was one of the first women to attend college in England.

Florence Ada Keynes was a historian, politician and writer, the first councilor of the City of Cambridge, where she was also a magistrate. Keynes's home was loving, she had good relations with both parents and with her brothers Margaret (1885) and Geoffrey (1887).

At the age of 5 and a half he began to attend school, but his poor health prevented him from attending regularly. His mother and guardian Beatrice Mackintosh were in charge of grooming the young man at home until he entered St. Faith in 1892, where he quickly stood out among all his peers.

Their parents cared about the interests of their children and always encouraged them to pursue them, in the same way they created reading and writing habits in the three young people. Keynes always had a penchant for mathematics and solved quadratic equations at the age of 9.

Eton

Both his father and John Maynard Keynes himself decided that the best option for the young man was to study at Eton, and since the tests for Winchester were at the same time, they opted for the first.

To prepare him for the entrance exams, Keynes had several private tutors, including the mathematician Robert Walter Shackle. Neville would get up with his son to study before breakfast.

On July 5, 1897, both parents and Keynes left for the tests, which lasted three days. Finally, on the 12th of the same month, they received a telegram announcing not only that Keynes had been admitted, but that he was the king's 10th student, that is, that his performance in the evaluations was one of the highest. That gave him a scholarship for his studies.

John Maynard Keynes began studying at Eton on September 22, 1897, living in a college dormitory with other young men of his generation, some of whom became his lifelong friends.

Despite not being very good at sports, due to his unhealthy nature, he adapted to Eton's activities and led an active life at school. Keynes was part of the Debating Group and the Shakespeare Society.

Also, during his senior year, he was part of the Eton Society. During her time at the school she won a total of 63 awards.

Cambridge

In 1901 Keynes and his father were undecided as to where the young man should apply for his higher education. Ultimately, they decided that King's College was the right place for the young man.

There, John Maynard secured two annual scholarships to study Mathematics and Classics, one for £ 60 and the other for £ 80. Plus, he had free tuition and dormitory until he took his BA.

It started in October 1902 and stood out in the same way as at Eton. Although the student body was small, 150 people, there were many activities at King's College.

Keynes participated from 1903 in the Cambridge Conversazione Society, known as the Apostles. He was also in the Bloomsbury Group, the Moral Science Club and the University Liberal Club, from where he approached his political position and the development of his criteria on the matter.

In May 1904 he received his first class BA in Mathematics. However, he continued to make his life around the university for a while longer.

While studying for his Civil Service diploma, he became interested in economics with Alfred Marshall, who was one of his professors and creator of this career at Cambridge.

Start of his career

After earning his Civil Service degree in 1906, Keynes accepted a clerical position in India, which he liked at first but ended up boring in 1908 when he returned to Cambridge.

Keynes secured a position as a university professor in probability theory and in 1909 also began teaching economics at King's College.

That same year Keynes published his first paper in The Economic Journal about the economy in India. He also founded the Political Economy Club.

From 1911 he became editor of The Economic Journal, where he could exercise his journalistic streak. In 1913 Keynes published his first book, Currency and Finance of India, which was inspired by the years he spent in the administration of this British colony.

That year John Maynard Keynes was appointed as one of the members of the Royal Commission on Currency and Finance of India, until 1914. There Keynes showed that he had good sense to apply economic theories to reality.

First World War

John Maynard Keynes was requested in London before the outbreak of the war as one of the economic advisers. He recommended that gold withdrawals from banks not be suspended before it was strictly necessary, to protect the reputation of the institutions.

In 1915 he officially accepted a position in the Treasury department, Keynes's task in this regard was to design the terms for the credits that Great Britain supplied to her allies during the war. He was made a Companion of the Order of the Bath in 1917.

He held his position as financial representative until 1919, when the Peace of Paris was signed. Keynes did not agree with plundering Germany, as he considered that this would irreversibly affect German morals and the German economy, which would subsequently affect the economy of the rest of the world.

Unable to avoid treaties that required exorbitant payments to the losers, John Maynard Keynes resigned from his post. He then declined the £ 2,000 a year offer to be the chairman of the British Bank Northern Commerce, which only asked him for one morning's work a week.

His views and theories about the Paris economic agreements were established in one of his most popular works The Economic Consequences of the War, published by Keynes in 1919.

Interwar

He went on to write about the economic problems that existed in the United Kingdom as a result of the war and the folly in the selection of policies to counteract them by the government.

In 1925 he married Lydia Lopokova, a Russian dancer with whom he fell deeply in love. Despite having been openly gay throughout his youth, there were no rumors about his sexuality since their marriage.

During the 1920s Keynes investigated the relationship between unemployment, money, and prices. This was the foundation of his two-volume work called A Treatise on Money (1930).

He continued as editor of The Economic Journal, and also of the Nation and Atheneum. He was successful as an investor and managed to recover his capital after the recession of the year 29.

During this time he was one of the economic advisers to the British Prime Minister.

Second World War

In 1940 Keynes published his work How to pay for war, where he explains how the winning countries should proceed to avoid an inflationary scenario. In September of the following year he entered the Court of Directors of the Bank of England.

As a reward for his services, he was granted a hereditary noble title in 1942, from then on he would be Baron Keynes, of Tilton, in the county of Sussex.

John Maynard Keynes was the leader of the British delegation for the negotiations when the victory of the allies loomed. He was also the chairman of the World Bank Commission.

He himself was the one who proposed the creation of two institutions, which would finally be called the World Bank and the International Monetary Fund. However, its terms were not enforced, with the vision of the United States of America winning.

Death

After the war ended, Keynes continued to represent the United Kingdom in international affairs quite successfully.

In 1937 he had had an angina pectoris, but the care of his wife Lydia made him recover quickly. However, his health declined again after the pressure of his responsibility and position before the country.

John Maynard Keynes died on April 21, 1946 after suffering a heart attack.

Theories-work

In his best-known work, The General Theory of Employment, Interest and Money, considered one of the books that has had the greatest impact on the economy, he argues that states should have an active economic policy in crisis situations.

It considers that the reduction of wages will not affect the magnitude of unemployment. On the contrary, Keynes argued that the increase in public spending, together with the fall in interest rates, was what could return the market to equilibrium.

That is, as long as more money is saved than invested, in a state of high interest, unemployment will increase. Unless economic policies intervene the formula.

After World War I, Keynes became the face of modern liberalism.

He considered moderate inflation preferable to deflation. However, at the end of World War II, he argued that, to avoid inflation, war spending had to be paid for with increased taxes on the colonies and increased savings for the working class.

Other contributions

In addition to his economic theories, John Maynard Keynes always had an interest in journalism and the arts. In fact, he used to participate in groups such as Bloomsbury, in which figures like Leonard and Virginia Woolf were also found.

He undertook the undertaking of making the Cambridge Theater of the Arts the second center for drama in England, after London. And the result was satisfactory.

Lopokova and Keynes. By Walter Benington (1872-1936), via Wikimedia Commons

During his participation in the government he also supported different artistic organizations such as the Royal Opera House and the Sadler Wells Ballet Company. His wife, Lydia Lopokova, was also an art enthusiast, being herself a professional Russian dancer.

Plays

- Indian Currency and Finance (1913).

- The Economics of War in Germany (1915).

- The Economic Consequences of the Peace (1919).

- A Treatise on Probability (1921).

- The Inflation of Currency as a Method of Taxation (1922).

- Revision of the Treaty (1922).

- A Tract on Monetary Reform (1923).

- Am I a Liberal? (1925).

- The End of Laissez-Faire (1926).

- Laissez-Faire and Communism (1926).

- A Treatise on Money (1930).

- Economic Possibilities for our Grandchildren (1930).

- The End of the Gold Standard (1931).

- Essays in Persuasion (1931).

- The Great Slump of 1930 (1931).

- The Means to Prosperity (1933).

- An Open Letter to President Roosevelt (1933).

- Essays in Biography (1933).

- The General Theory of Employment, Interest and Money (1936).

- The General Theory of Employment (1937).

- How to Pay for the War: A radical plan for the Chancellor of the Exchequer (1940).

- Two Memoirs (1949). Ed. By David Garnett (On Carl Melchior and GE Moore).

References

1. En.wikipedia.org. (2018). John Maynard Keynes.. Taken from: en.wikipedia.org.
2. Well, M. (2007). The Little Larousse Illustrated Encyclopedic Dictionary 2007. 13th ed. Bogotá (Colombia): Printer Colombiana, p. 1446.
3. Encyclopedia Britannica. (2018). John Maynard Keynes - Biography, Theory, Economics, Books, & Facts.. Taken from: britannica.com.
4. Moggridge, D. (1995). Maynard Keynes: An Economist's Biography. London: Routledge, pp. 1-100.
5. Gumus, E. (2012). LIFELONG LIBERAL JOHN MAYNARD KEYNES: SOME HIGHLIGHTS FROM HIS LIFE. MPRA Paper.. Taken from: mpra.ub.uni-muenchen.de.
6. Felix, D. (1999). Keynes: A Critical Life (Contributions in economics and economic history, no. 208). Greenwood Press, pp 1-49.