John Maynard Keynes: Difference between revisions
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1883-1946. Economist. Member of the [[Bloomsbury Group]]. | 1883-1946. Economist. Member of the [[Bloomsbury Group]]. | ||
The theories of the British economist John Maynard Keynes have influenced theoretical discussions and the economy policy all over the world. Two of his suggestions were especially effective: the use of changing exchange rates as means of economy policy und the recommendation to fight unemployment with limited inflation. His thoughts were social; some call him socialist, others saviour of capitalism. After 1918, he fought the [[Treaty of Versailles]] and the allied reparation policy. | The theories of the British economist John Maynard Keynes have influenced theoretical discussions and the economy policy all over the world. His name is connected with the theoretical establishment was is called "macroeconomics" today. Two of his suggestions were especially effective: the use of changing exchange rates as means of economy policy und the recommendation to fight unemployment with limited inflation. His thoughts were social; some call him socialist, others saviour of capitalism. After 1918, he fought the [[Treaty of Versailles]] and the allied reparation policy. | ||
'''under construction''' | '''under construction''' | ||
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''' | '''War''' | ||
1916, the Government introduced the official duty for all men age 18-41. As an officer at the Financial Ministry, Keynes was excluded from this regulation; for reasons of conscience he applied again for dispensation. But for his fellow members from the [[ Bloomsbury Group]], his engagement in financing the war was already too much. His way to protest was to lay down his office and to write ''The Economic Consequences of the Peace''. | |||
'''Global Economic Crisis''' | |||
1919, the global economic crisis hit Britain and a Labour Government which was not up to this situation. From 1931-1935, a National Government was formed under Labour Premier Ramsey McDonald, involving liberal and conservative ministers. During this phase, the influence of Keynes’ theories was noticeable. Contrary to the traditional theory of budget consolidation, the Government prioritised the establishment of jobs through public projects. | |||
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'''Return to the Gold Standard''' | |||
When [[Winston Churchill|Churchill]], Chancellor of the Exchequer, reintroduced the gold standard in 1929, it was seen as a step towards back to Britain’s old economic reputation. This was welcomed across the board but by Keynes. Already in 1919, had he warned of the “Economic Consequences of the Peace” (Brüggemeier, 139), claiming that the reparations demanded by Versailles were too high. Now, he warned of the “Economic Consequences of Mr Churchill” (Brüggemeier, 139). Meaning that as a matter of principle the return to the gold standard was appropriate, but the fixed exchange rate was too high and would be an additional burden for the already weakened economy. | |||
'''Underconsumption''' | |||
Keynes picked up the idea of underconsumption, which was introduced around 1890 by the economist [[John A. Hobson]]. It said that in a capitalist economy the production increases faster than the demand. Under the influence of the global economic crisis, Keynes worked out his thoughts and pleat for an increase of the demand during crisis situations. | |||
''' | '''Britain - A Great Nation''' | ||
Keynes, who was familiar with economic difficulties of Britain very well, noticed: “We are a great nation, but if we continue to behave like a Great Power, we shall soon cease to be a great nation”(Brüggemeier, 230). But this only seems to be logical at first glance because although Britain was no longer a world power after the war, it was still a great power and superior to the other European states which were struck even harder. | |||
''' | '''Ministry of Finance''' | ||
In July 1940, Keynes was nominated special adviser of the Ministry of Finance. From then, his arguments got a bigger audience and he could introduce his new budget, which did not only list the income and expenditure of the Government but included more data. This was an important substructure for the establishment of the Welfare State in 1945. | |||
In 1945, Keynes negotiated a Credit Agreement with the USA and Canada. This credit allowed Britain to manage the most important responsibilities. | |||
'''Ennoblement''' | |||
In 1942, Keyens was ennobled as Lord Keynes or Baron Keynes of Tilton. | |||
'''Health''' | |||
Already during his education at school, Keynes suffered from an ill health, which kept him away from classes. The illesses reoccur during his further education and in 1937, he suffered his first heart attack, followed by a serious illness. After he was awarded the Order of Merit and became a member of the [[Royal Society]], Keynes died on April 21, 1946 in Tilton, Sussex of heart failure. | |||
| Line 61: | Line 72: | ||
*'''1922''' ''A Revision of the Treaty'' | *'''1922''' ''A Revision of the Treaty'' | ||
*'''1923''' ''A Tract on Monetary Reform'' | *'''1923''' ''A Tract on Monetary Reform'' | ||
*'''1925''' ''Am I Liberal?'' | |||
*'''1930''' ''A Treatise on Money'' | *'''1930''' ''A Treatise on Money'' | ||
*'''1936''' ''The General Theory of Employment, Interest and Money'' | |||
*'''1940''' ''How to Pay for the War'' | *'''1940''' ''How to Pay for the War'' | ||
Revision as of 21:01, 7 December 2011
1883-1946. Economist. Member of the Bloomsbury Group.
The theories of the British economist John Maynard Keynes have influenced theoretical discussions and the economy policy all over the world. His name is connected with the theoretical establishment was is called "macroeconomics" today. Two of his suggestions were especially effective: the use of changing exchange rates as means of economy policy und the recommendation to fight unemployment with limited inflation. His thoughts were social; some call him socialist, others saviour of capitalism. After 1918, he fought the Treaty of Versailles and the allied reparation policy.
under construction
Childhood and Youth
John Maynard Keynes was born in Cambridge on June 5, 1883. Keynes grew up in Victorian and Edwardian times; prices and interest rates were relatively stable. His childhood was formed by his father, John Neville Keynes, a philosopher, economist and administrator at university and his mother, Florence Ada, an early graduate of Cambridge University, active member of charity and later major of the city. Keynes was the oldest of three siblings.Already at the age of 4 ½, Keynes replied when asked what interest is: “If I let you have a halfpenny and you kept it a very long time, you would have to give me back that halfpenny and another too. That is interest.” (Sills, 114)
His upbringing was traditional: nanny, kindergarten, elementary school, followed by Eton and classical and mathematical studies at King’s College. His mathematics teacher sees him as talented, but also remarks his lack of patience when difficulties arise. During his school time he wins several prizes, e.g. Eton’s Junior Mathematical Prize (1898), Eton's Senior Prize (1900). At King’s College, he engages in several debating and intellectual societies, which are going to shape him more than his formal studies. His later development was clearly influenced by his membership in the Bloomsbury Group. He is also an active sportsman. In the final examinations, he scored 12th. In 1903, he entered a secret society called Apostel.
War
1916, the Government introduced the official duty for all men age 18-41. As an officer at the Financial Ministry, Keynes was excluded from this regulation; for reasons of conscience he applied again for dispensation. But for his fellow members from the Bloomsbury Group, his engagement in financing the war was already too much. His way to protest was to lay down his office and to write The Economic Consequences of the Peace.
Global Economic Crisis
1919, the global economic crisis hit Britain and a Labour Government which was not up to this situation. From 1931-1935, a National Government was formed under Labour Premier Ramsey McDonald, involving liberal and conservative ministers. During this phase, the influence of Keynes’ theories was noticeable. Contrary to the traditional theory of budget consolidation, the Government prioritised the establishment of jobs through public projects.
Marriage
In 1925, he married Lydia Lopakowa (1892-1981), a Russian ballet dancer.
Return to the Gold Standard
When Churchill, Chancellor of the Exchequer, reintroduced the gold standard in 1929, it was seen as a step towards back to Britain’s old economic reputation. This was welcomed across the board but by Keynes. Already in 1919, had he warned of the “Economic Consequences of the Peace” (Brüggemeier, 139), claiming that the reparations demanded by Versailles were too high. Now, he warned of the “Economic Consequences of Mr Churchill” (Brüggemeier, 139). Meaning that as a matter of principle the return to the gold standard was appropriate, but the fixed exchange rate was too high and would be an additional burden for the already weakened economy.
Underconsumption
Keynes picked up the idea of underconsumption, which was introduced around 1890 by the economist John A. Hobson. It said that in a capitalist economy the production increases faster than the demand. Under the influence of the global economic crisis, Keynes worked out his thoughts and pleat for an increase of the demand during crisis situations.
Britain - A Great Nation
Keynes, who was familiar with economic difficulties of Britain very well, noticed: “We are a great nation, but if we continue to behave like a Great Power, we shall soon cease to be a great nation”(Brüggemeier, 230). But this only seems to be logical at first glance because although Britain was no longer a world power after the war, it was still a great power and superior to the other European states which were struck even harder.
Ministry of Finance
In July 1940, Keynes was nominated special adviser of the Ministry of Finance. From then, his arguments got a bigger audience and he could introduce his new budget, which did not only list the income and expenditure of the Government but included more data. This was an important substructure for the establishment of the Welfare State in 1945. In 1945, Keynes negotiated a Credit Agreement with the USA and Canada. This credit allowed Britain to manage the most important responsibilities.
Ennoblement
In 1942, Keyens was ennobled as Lord Keynes or Baron Keynes of Tilton.
Health
Already during his education at school, Keynes suffered from an ill health, which kept him away from classes. The illesses reoccur during his further education and in 1937, he suffered his first heart attack, followed by a serious illness. After he was awarded the Order of Merit and became a member of the Royal Society, Keynes died on April 21, 1946 in Tilton, Sussex of heart failure.
Selection of his Publications
- 1919 The Economic Consequences of the Peace
- 1921 A Treatise of Probability
- 1922 A Revision of the Treaty
- 1923 A Tract on Monetary Reform
- 1925 Am I Liberal?
- 1930 A Treatise on Money
- 1936 The General Theory of Employment, Interest and Money
- 1940 How to Pay for the War
Sources
- Brüggemeier, Franz-Josef. Geschichte Großbrittaniens im 20. Jahrhundert. München: C.H.Beck, 2010.
- Maurer, Michael. Kleine Geschichte Englands. Stuttgart: Reclam, 2007.
- Moggridge, Donald. John Maynard Keynes. München: dtv, 1977.
- Sills, David L. and Merton, Robert K., ed. Social Science Quotations. Who said What, When, and Where. New Jersey: Transaction Publishers, 2000.
- John Maynard Keynes. Timeline. http://www.maynardkeynes.org/keynes-career-timeline.html December 6, 2011