John Maynard Keynes


John Maynard Keynes : biography

5 June 1883 – 21 April 1946

He and other monetarists have consequently argued that Keynesian economics can result in stagflation, the combination of low growth and high inflation that developed economies suffered in the early 1970s. More to Friedman’s taste was the Tract on Monetary Reform (1923), which he regarded as Keynes’s best work because of its focus on maintaining domestic price stability.


Joseph Schumpeter was an economist of the same age as Keynes and one of his main rivals. He was among the first reviewers to argue that Keynes’s General Theory was not a general theory, but was in fact a special case.

He said the work expressed "the attitude of a decaying civilisation". After Keynes’s death Schumpeter wrote a brief biographical piece called Keynes the Economist – on a personal level he was very positive about Keynes as a man ; praising his pleasant nature, courtesy and kindness. He assessed some of Keynes biographical and editorial work as among the best he’d ever seen. Yet Schumpeter remained critical about Keynes’s economics, linking Keynes’s childlessness to what Schumpeter saw as an essentially short term view. He considered Keynes to have a kind of unconscious patriotism that caused him to fail to understand the problems of other nations. For Schumpeter

"Practical Keynesianism is a seedling which cannot be transplanted into foreign soil: it dies there and becomes poisonous as it dies." 


Austrian School economic commentator and journalist Henry Hazlitt’s The Failure of the New Economics is a paragraph-by-paragraph refutation of The General Theory. In 1960 he published the book The Critics of Keynesian Economics where he gathered together the major criticisms of Keynes made up to that year.

Harry Truman

President Harry Truman was skeptical of Keynesian theorizing. "Nobody can ever convince me that Government can spend a dollar that it’s not got," he told Leon Keyserling, a Keynesian economist who chaired Truman’s Council of Economic Advisers.

Allegations of racism

Keynes was on occasion heard making statements which could be perceived as racist: for example, he would use the word "niggers" to refer to black people in casual conversations.Isaiah Berlin: A Life, (London 1998) Michael Ignatieff, page 128 This term was often used neutrally in British circles at that time, and was not necessarily an expression of negative feelings, as when, for example, he wrote to Duncan Grant that “the only really sympathetic and original thing in America are the niggers, who are charming”. Nonetheless fellow British observers recount being shocked by some statements he made, such as the following, apropos the Washington summer: "It’s far too hot. Much too hot for white men. All right for niggers." He also wrote that there was "beastliness in the Russian nature” as well as "cruelty and stupidity”, and other comments which may be construed as anti-Russian.A Short View of Russia, Essays in Persuasion, (London 1932) John Maynard Keynes, 297–312 Some critics, such as Rothbard, have sought to infer that Keynes had sympathy with Nazism, and a number of writers have described him as anti-Semitic. Keynes’s private letters express portraits and descriptions some of which can be characterised as anti-Semitic, others as pro-Semitic., History of Political Economy – Volume 32, Number 4, Winter 2000, pp. 833–856 Scholars have suggested that these reflect clichés current at the time that he accepted uncritically, rather than any racism. Keynes had many Jewish friends, including Isaiah Berlin and Piero Sraffa.Isaiah Berlin: A Life, (London 1998) Michael IgnatieffRay Monk, Wittgenstein: The Duty of Genius (London 1991), page 260. Keynes several times used his influence to help his Jewish friends, most notably when he successfully lobbied for Ludwig Wittgenstein to be allowed residency in the United Kingdom explicitly in order to rescue him from being deported to Nazi-occupied Austria. Keynes was, furthermore, a supporter of Zionism, serving on committees supporting the cause.

Allegations that he was racist or had totalitarian beliefs have been rejected by biographers such as Robert Skidelsky. Professor Gordon Fletcher writes that "the suggestion of a link between Keynes and any support of totalitarianism cannot be sustained". Once the aggressive tendencies of the Nazis towards Jews and other minorities became apparent, Keynes made clear his loathing of Nazism. As a lifelong pacifist he had initially favoured peaceful containment, yet he began to advocate a forceful resolution while many conservatives were still arguing for appeasement. After the war started he roundly criticised the Left for losing their nerve to confront Hitler:

Allegations of pro-inflationary views

Keynes has been characterised as being indifferent or even positive about inflation.

Keynes had indeed expressed a preference for inflation over deflation, saying that if one has to choose between the two evils it is "better to disappoint the rentier" than to inflict pain on working-class families. However, Keynes was consistently adamant about the need to avoid inflation where possible.

In The Economic Consequences of the Peace, Keynes had written:

Keynes remained convinced of the dangers of inflation to the end of his life; during World War II he argued strongly for policies that would minimise post-war inflation.