John Maynard Keynes born 5 June 1883 (d. 1946)John Maynard Keynes, 1st Baron Keynes CB was a British economist whose ideas, called Keynesian economics, had a major impact on modern economic and political theory as well as on many governments' fiscal policies. He advocated interventionist government policy, by which the government would use fiscal and monetary measures to mitigate the adverse effects of economic recessions, depressions and booms. He is one of the fathers of modern theoretical macroeconomics.
Born in Cambridge, John Maynard Keynes was the son of an economics lecturer at Cambridge University and a successful author and a social reformer.
Keynes' early romantic and sexual relationships were almost all with men. Homosexuality was not unusual in the Bloomsbury group in which Keynes was avidly involved. One of his great loves was the artist Duncan Grant, whom he met in 1908, and he 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, and they married in 1925.After studying Mathematics at Cambridge, where his interest in politics lead him to switch to economics, Keynes accepted a lectureship at Cambridge in economics, from which position he began to build his reputation. Soon he was appointed to the Royal Commission on Indian Currency and Finance, where he showed his considerable talent at applying economic theory to practical problems.
His expertise was in demand during the First World War. He worked for the Adviser to the Chancellor of the Exchequer and to the Treasury on Financial and Economic Questions. Among his responsibilities were the design of terms of credit between Britain and its continental allies during the war, and the acquisition of scarce currencies.
His successes in this field led eventually to the appointment that would have a huge effect on Keynes’ life and career: financial representative for the Treasury to the 1919 Paris Peace Conference.
Keynes' career lifted off as an adviser to the British finance department from 1915 – 1919 during World War I, and their representative at the Versailles peace conference in 1919. His observations appeared in the highly influential book The Economic Consequences of the Peace in 1919, followed by A Revision of the Treaty in 1922. Using statistics provided to him by the German delegation, he argued that the reparations which Germany was forced to pay to the victors in the war were too large, would lead to the ruin of the German economy and result in further conflict in Europe. These predictions were borne out when the German economy suffered in the hyperinflation of 1923. Only a fraction of reparations were ever paid.
By 1942, Keynes was a highly recognised economist and was raised to the House of Lords as Baron Keynes, of Tilton in the County of Sussex, where he sat on the Liberal benches. During World War II, Keynes argued in How to Pay for the War that the war effort should be largely financed by higher taxation, rather than deficit spending, in order to avoid inflation. As Allied victory began to look certain, Keynes was heavily involved, as leader of the British delegation and chairman of the World Bank commission, in the negotiations that established the Bretton Woods system. The Keynes-plan, concerning an international clearing-union argued for a radical system for the management of currencies, involving a world central bank, the International Clearing Union, responsible for a common world unit of currency, the Bancor.
Keynes was ultimately a successful investor, building up a substantial private fortune. He was nearly wiped out following the Stock Market Crash of 1929, but he soon recouped his fortune. He enjoyed collecting books: for example, he collected and protected many of Isaac Newton's papers. He was interested in literature in general and drama in particular and supported the Cambridge Arts Theatre financially, which allowed the institution to become, at least for a while, a major British stage outside of London.
Keynes' personal interest in Classical Opera and Dance focused on his support of the Royal Opera House, Covent Garden and the Ballet Company at Sadlers Wells. 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. Following the War Keynes was instrumental in establishing the Arts Council of Great Britain and was the founding Chairman in 1946. Unsurprisingly from the start the two organisations that received the largest grant from the new body were the Royal Opera House and Sadlers Wells.
He also had a less laudable interest in eugenics.
Keynes died of a heart attack at his holiday home in Tilton, East Sussex, his heart problems being aggravated 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, a process he described as 'absolute hell'.