Keynes

born June 5, 1883, Cambridge, Cambridgeshire, England
died April 21, 1946, Firle, Sussex

English economist, journalist, and financier, best known for his economic theories (Keynesian economics) on the causes of prolonged unemployment. His most important work, The General Theory of Employment, Interest and Money (1935–36), advocated a remedy for economic recession based on agovernment-sponsored policy of full employment.

Keynes was born into a moderately prosperous family. His father, John Neville Keynes, was an economist and later an academic administrator at the King's College, Cambridge. His mother was one of the first female graduates of the same university, which Keynes entered in 1902.
At Cambridge he was influenced by economist Alfred Marshall, who prompted Keynes to shifthis academic interests from mathematics and the classics to politics and economics. Cambridge also introduced Keynes to an important group of writers and artists. The early history of the Bloomsbury group—an exclusive circle of the cultural elect, which counted among its members Leonard and Virginia Woolf, the painter Duncan Grant, and the art critic Clive Bell—centred upon Cambridge and theremarkable figure of Lytton Strachey. Strachey, who had entered Cambridge two years before Keynes, inducted the younger man into the exclusive private club known simply as “the Society.” Its members and associates (some of them homosexual, like Keynes himself) were the leading spirits of Bloomsbury. Throughout his life Keynes was to cherish the affection and respond to the influence of this group.After earning a B.A. in 1905 and an M.A. in 1909, Keynes became a civil servant, taking a job with the India Office in Whitehall. His experience there formed the basis of his first major work, Indian Currency and Finance (1913), a definitive examination of pre-World War I Indian finance and currency. He then returned to Cambridge, where he taught economics until 1915. With the onset of World War I,Keynes returned to government employment, this time in the Treasury (an agency even more powerful than its American counterpart), where he studied relations with allies and recommended means of conserving Britain's scant supply of foreign currencies.
His performance may have marked Keynes for a public career, but the Versailles Peace Conference changed his aspirations. Accompanying Prime MinisterDavid Lloyd George to France as an economic adviser, Keynes was troubled by the political chicanery and burdensome policies that were to be imposed upon the defeated Germany. He resigned his post, depressed, to quote from a letter to his father, by the impending “devastation of Europe.”
He took an activist's stance, however, by transforming personal distress into public protest. In two summermonths he composed the indictment of the Versailles settlement that reached the bookstores by Christmas 1919 as The Economic Consequences of the Peace. The permanent importance of this polemical essay lies in its economic analysis of the stringent reparations placed upon Germany and the corresponding lack of probability that the debts would ever be paid. The popular success of the book, however, camefrom the blistering sketches of Woodrow Wilson, Georges Clemenceau, and Keynes's old chief, Lloyd George. As a consequence, in some Whitehall circles Keynes was considered a man not quite to be trusted, an iconoclast willing to rock any boat into which he had imprudently been invited.

Keynes's reputation at Cambridge was quite different. He was esteemed as the most brilliant student ofMarshall and fellow economist A.C. Pigou, authors of large, definitive works explaining how competitive markets functioned, how businesses operated, and how individuals spent their incomes. After publication of The Economic Consequences of the Peace, Keynes resigned his lecture post but stayed on as a fellow of King's College, dividing his time between Cambridge and London.
Although the tone of...