John Maynard Keynes Biography
John Maynard Keynes was born on June 5, 1883, in Cambridge, United Kingdom and died, at age of 62, on April 21, 1946, in East Sussex, United Kingdom. He was one of the most influential British economists of the twentieth century thanks to his impact on economic policies. His main work, the General Theory of Employment, Interest, and Money, aside from opposing the classical economy of the moment, dealt with his considerations on labor, monetary theory and the cycle of trade. He is also considered one of the founders of macroeconomics, the global study of economics.
Maynard comes from a cultured and well-off family; his parents John Neville Keynes and Florence Ada Brown, along with his sister and brother, Margaret and Geoffrey Keynes, were the were the role model for the little economist. John’s education was excellent, he went through Eton College and King’s College at the University of Cambridge where he studied mathematics, probability theory and economics, becoming, little by little, a scholarly humanist. In his university days he was part of the Bloomsbury circle, artistic and intellectual group formed by the writer Virginia Woolf, the philosophers Bertrand Russell and Ludwig Wittgenstein, among its members were Clive Bell, the Hispanist Gerald Brenan, Lytton Strachey, Vanessa Bell, Duncan Grant and EM Forster; all promoted an opposite and alternative order to the dominant Victorian proposal.
His career as an economist began in 1906 when he was appointed public servant of the Home Civil Service, where he would learn everything about the Indian economy. As a result of this, he wrote the book Currency and Finance in India in 1913. Then, after considering his current job, he decided to resign, and go to work at the University of Cambridge in the department of probability theory.
All of Keynes’s works are associated with trying to find solutions to the economic problems through which the world economy was passing, as well as The Economic Consequences of Peace, written in 1919, deals with the economic implications and consequences imposed on Germany in the Treaty of Versailles; As in the Treaty on probabilities, Keynes attacked the deflationary policies of the 1920s on the monetary reform of 1923, with a profound argument about why countries should aim for the stability of domestic prices while proposing the use of interest rates of flexible change, and so many more works, that make up all the work of the economist.
In 1925, he married Lidya Lopokova, a Russian dancer whom Keynes met thanks to his fascination with the works of Sergei Diaghilev. However, before knowing her in 1918, several male partners were associated with him, confirming his homosexuality.
But undoubtedly his most important work Theories of Employment, Interest, and Money, published in 1935, not only responds aptly to the reason of the great economic depression of 1929 but also triggers a huge change in all economic thought. The work, in summary, indicates that the level of employment in the modern economy was determined by three factors: the marginal propensity to consume, the marginal efficiency of capital and the interest rate. Faced with an economy weakened by low demand (for example, in a depression), where there is a triggering problem (difficulty in achieving a vigorously growing economy), the government can increase aggregate demand by increasing its expenditures (even if it incurs public deficit), without the public sector increasing the interest rate enough to undermine the effectiveness of this policy. The importance of the points of view contained in that book was such that he founded an entire branch of modern economic theory, macroeconomics, dedicated to exploring the relationships between the great aggregates of national income.
Keynes achieved a revolution in the economy, but it was after the Second World War (1939-45) when Keynesian thought was formed as a new orthodoxy, determining the economic policies of the entire Western world for more than three decades of sustained growth. The prestige of Keynes was so great that King George VI appointed him as Baron in 1942, entering the House of Lords. From that position, he argued in How to pay the war? that the war effort should be financed by increasing colonies in Africa and by higher taxes, instead of deficit spending, and thus avoid inflation.
Keynes also had an interest in literature and the arts, which was reflected when he became the director and principal shareholder of the Cambridge Theater of the Arts. Politically, Keynes achieved great achievements by taking the side of the British Liberals, occupying very relevant positions in the British public sphere. He was a leading member of the British delegation at the Bretton Woods conference, where and established the World Bank and the IMF and laid the foundations for the economic system for several decades. He died of a heart attack. He suffered from heart problems, which worsened after the hard work of the financial problems of the postwar period. Still today Keynes, remains a “very current” economist, with reflections that even today continue to make us think a lot about saving and economic policy.