John Maynard Keynes : biography
After the war, Keynes continued to represent the United Kingdom in international negotiations despite his deteriorating health. He succeeded in obtaining preferential terms from the United States for new and outstanding debts to facilitate the rebuilding of the British economy.
Just before his death in 1946, Keynes told Henry Clay, a professor of Social Economics and Advisor to the Bank of England
of his hopes that Adam Smith’s ‘invisible hand’ can help Britain out of the economic hole it is in: "I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago."
Keynes’s economic thinking only began to achieve close to universal acceptance in the last few years of his life. On a personal level, Keynes’s charm was such that he was generally well received wherever he went – even those who found themselves on the wrong side of his occasionally sharp tongue rarely bore a grudge.
Keynes’s speech at the closing of the Bretton Woods negotiations was received with a lasting standing ovation, rare in international relations, as delegates acknowledged the scale of his achievements made despite poor health.
Austrian School economist Friedrich Hayek was Keynes’s most prominent contemporary critic, with sharply opposing views on the economy. Yet after Keynes’s death he wrote:Keynes Hayek: The Clash That Defined Modern Economics, By Nicholas Wapshott, p 206.
For his part, Keynes praised Hayek’s book The Road to Serfdom, writing to the Austrian economist that, "Morally and philosophically I find myself in agreement with virtually the whole of it."
Lionel Robbins, former head of the economics department at the London School of Economics, who had many heated debates with Keynes in the 1930s, had this to say after observing Keynes in early negotiations with the Americans while drawing up plans for Bretton Woods:
Douglas LePan, an official from the Canadian High Commission, wrote:
named Keynes one of the most intelligent people he had ever known, commenting:
Keynes’s obituary in The Times included the comment:
As a man of the centre described as undoubtedly having the greatest impact of any 20th-century economist, Keynes attracted considerable criticism from both sides of the political spectrum. In the 1920s, Keynes was seen as anti-establishment and was mainly attacked from the right. In the "red 1930s", many young economists favoured Marxist views, even in Cambridge, and while Keynes was engaging principally with the right to try to persuade them of the merits of more progressive policy, the most vociferous criticism against him came from the left, who saw him as a supporter of capitalism. From the 1950s and onwards, most of the attacks against Keynes have again been from the right.
In 1931 Friedrich Hayek extensively critiqued Keynes’s 1930 Treatise on Money.
After reading Hayek's The Road to Serfdom, Keynes
wrote to Hayek saying: "Morally and philosophically I find myself in agreement with virtually the whole of it" but concluded the same letter with the recommendation: On the pressing issue of the time, whether deficit spending could lift a country from depression, Keynes
replied to Hayek's criticism in the following way:
Hayek explained the letter by saying:
According to some observers, Hayek felt that the post-World War II "Keynesian orthodoxy" gave too much power to the state and led toward socialism.
While Milton Friedman described The General Theory as "a great book", he argues that its implicit separation of nominal from real magnitudes is neither possible nor desirable. Macroeconomic policy, Friedman argues, can reliably influence only the nominal.