John Maynard Keynes

Nationality

United Kingdom

Date of Birth

1883

Date of Death

1946

Political
Preference

Liberal

John Maynard Keynes, was a British economist whose ideas revolutionized economic thought and inspired the Keynesian economics school of economic thought. Born and raised in Cambridge, and graduating from King’s College Cambridge with a mathematics degree, Keynes became a civil servant as a clerk in the India Office, but returned to Cambridge to continue his studies. He was called to advise the British government in London at the onset of the First World War. During negotiations over the Versailles Treaty, Keynes opposed setting reparation payments too high for Germany, citing concerns that Germany’s economy, and by extension the world’s, would suffer its consequences. In 1919, Keynes therefore published The Economic Consequences of the Peace.

In the 1920s and 1930s, under the influence of the Great Depression, Keynes argued that that the free market economy would not automatically lead to full employment. This was contrary to the doctrine of classical liberalism that was dominant at the time. Keynes advocated a more active role of the state in the fiscal and monetary realm, in order to provide economic incentives that would lead to full employment policies.

During the Second World War, Keynes was involved in the allocation of resources between the British and Americans. From 1942 onwards, he was the leading spokesperson for the British government in negotiating with the Americans a post-war international economic order. Keynes’ plan for an International Clearing Union (ICU) aimed to restore the worldwide system of free trade through monetary means. In order to get input from the European governments in exile at the time, Keynes hosted a series of discussions between the Allied financial experts at the U.K. Treasury in London. Despite this, the rendering of the post-war international economic system remained a mostly Anglo-American affair.

Eventually, Keynes was outmaneuvered on many points by his American counterpart Harry D. White (who made the dollar the basis of the post-war economic system). But Keynes’ economic thought was still at the basis of post-war international economic system of which the foundation was laid with the Bretton Woods Agreement of 1944. Keynes’ thought on clearing unions, for this matter, also inspired the European Payments Union (EPU).