John Maynard Keynes

"John Keynes" and "Keynes" redirect here. For his father, see John Neville Keynes. For other uses, see Keynes (disambiguation).

The Right Honourable
The Lord Keynes
CB FBA
Keynes in 1933
Born(1883-06-05)5 June 1883
Cambridge, England
Died21 April 1946(1946-04-21) (aged 62)
Tilton, near Firle in Sussex, England
Education
Political partyLiberal
Spouse
​
(m. 1925)​
Parents
Academic career
Field
InstitutionKing's College, Cambridge
School or
tradition		Keynesian economics
Influences
Contributions
Member of the House of Lords
Lord Temporal
In office
7 July 1942 – 21 April 1946
Hereditary peerage
Succeeded byPeerage abolished
Preceded byPeerage created
Signature
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John Maynard Keynes, 1st Baron Keynes[3] CB, FBA (/keɪnz/ KAYNZ; 5 June 1883 – 21 April 1946), was an English economist and philosopher whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles.[4] One of the most influential economists of the 20th century,[5][6][7] he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots.[8] His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics. He is known as the "father of macroeconomics".[9]

During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labour costs are rigid downwards the economy will not automatically rebound to full employment.[10] Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. After the 1929 crisis, Keynes also turned away from a fundamental pillar of neoclassical economics: free trade. He criticized Ricardian comparative advantage theory (the foundation of free trade), considering the theory's initial assumptions unrealistic, and became definitively protectionist.[11][12][13] He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in early 1936. By the late 1930s, leading Western economies had begun adopting Keynes's policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946. As a leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II but was overruled by the American delegation on several aspects.

Keynes's influence started to wane in the 1970s, partly as a result of the stagflation that plagued the British and American economies during that decade, and partly because of criticism of Keynesian policies by Milton Friedman and other monetarists,[14] who disputed the ability of government to favourably regulate the business cycle with fiscal policy.[15] The 2007–2008 financial crisis sparked the 2008–2009 Keynesian resurgence. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the 2007–2008 financial crisis by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.[16]

When Time magazine included Keynes among its Most Important People of the Century in 1999, it reported that "his radical idea that governments should spend money they don't have may have saved capitalism".[17] The Economist has described Keynes as "Britain's most famous 20th-century economist".[18] In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals.[19]

  1. ^ Bradley W. Bateman; Toshiaki Hirai; Maria Cristina Marcuzzo, eds. (2010). The Return to Keynes. Harvard University Press. p. 146. ISBN 978-0-674-05354-0. Archived from the original on 22 April 2017. Retrieved 21 April 2017.
  2. ^ Parsons, Wayne (4 December 2006). The Cambridge History of Twentieth-Century Political Thought. Cambridge University Press. p. 46. ISBN 9781139053600.
  3. ^ Cairncross, Alec. "Keynes, John Maynard, Baron Keynes (1883–1946)". Oxford Dictionary of National Biography (online ed.). Oxford University Press. doi:10.1093/ref:odnb/34310. (Subscription or UK public library membership required.)
  4. ^ Yergin & Stanislaw 2002, pp. 39–42.
  5. ^ Sloman, John (22 October 2008). "How to kick-start a faltering economy the Keynes way". BBC. Archived from the original on 4 April 2009. Retrieved 13 November 2008.
  6. ^ Cohn, Steven Mark (2015). Reintroducing Macroeconomics: A Critical Approach. Taylor & Francis. p. 111. ISBN 978-1-317-46120-3. Archived from the original on 22 April 2017. Retrieved 21 April 2017.
  7. ^ Davis, William L.; Figgins, Bob; Hedengren, David; Klein, Daniel B. (May 2011). "Economic Professors' Favorite Economic Thinkers, Journals, and Blogs" (PDF). Econ Journal Watch. 8 (2): 126–46. Archived (PDF) from the original on 17 April 2021. Retrieved 21 April 2017.
  8. ^ Skidelsky, Robert (26 October 2010). Keynes: The Return of the Master. Cambridge: Public affairs. ISBN 978-1-58648-897-0.
  9. ^ Wolf, Martin (23 December 2008). "Keynes offers us the best way to think about the financial crisis". Financial Times. (Columnist opinion)
  10. ^ Cite error: The named reference :0 was invoked but never defined (see the help page).
  11. ^ Maurin, Max (2011). "J.M. Keynes, le libre-échange et le protectionnisme" [J.M. Keynes, Free Trade and Protectionism]. L'Actualité Économique (in French). 86: 109–129. doi:10.7202/045556ar. Archived from the original on 6 May 2021. Retrieved 14 May 2021.
  12. ^ Maurin, Max (2013). Les fondements non neoclassiques du protectionnisme (Thesis) (in French). Université Bordeaux-IV.
  13. ^ John Maynard Keynes (June 1933). "National Self-Sufficiency". The Yale Review. 22 (4): 755–769. Archived from the original on 15 May 2011. Retrieved 14 May 2021.
  14. ^ Krugman, Paul (1995). Peddling Prosperity: Economic Sense and Nonsense in the Age of Diminished Expectations. W.W. Norton. p. 43. ISBN 978-0-393-31292-8. In 1968 in one of the decisive intellectual achievements of postwar economics, Friedman not only showed why the apparent tradeoff embodied in the idea of the Phillips curve was wrong; he also predicted the emergence of combined inflation and high unemployment ... dubbed 'stagflation.
  15. ^ "To Set the Economy Right". Time. 27 August 1979. Archived from the original on 4 April 2009. Retrieved 13 November 2008.
  16. ^ Chris Giles; Ralph Atkins; Krishna Guha. "The undeniable shift to Keynes". Financial Times. Archived from the original on 20 October 2020. Retrieved 23 January 2009.
  17. ^ Reich, Robert (29 March 1999). "The Time 100: John Maynard Keynes". Time. Archived from the original on 24 May 2021. Retrieved 18 June 2009.
  18. ^ "The IMF in Britain: Toothless truth tellers". The Economist. 11 May 2013. Archived from the original on 18 April 2021. Retrieved 2 October 2013.
  19. ^ "Maynard Keynes". The Bloomsbury Group. 22 August 2007. Archived from the original on 30 April 2021. Retrieved 26 May 2012.