The 60th Anniversary of the Death of Keynes

April 18, 2006  


60 years ago on the last Saturday before Easter on April 21, 1946 the great English economist John Maynard Keynes suffered a fatal heart attack and died just two months short of his 63rd birthday at his home in Sussex, Tilton just a few miles up the road from Lewes north of Brighton on the edge of the beautiful South Downs. His wife, the former Russian Diaghilev ballerina star, Lydia Lopokova and his mother Florence Ada Brown Keynes, herself the former mayor of Cambridge were with him at the end. He was also survived by his father, the economist John Neville Keynes.(His father lived until the age of 97 his mother 96, his brother 95.His wife Lydia lived until 1981 dying at the age of 88.(See Peter Clarke, Keynes) Hence, he ought to have survived at least into his 80s which would have taken him to the 1960s, but his smoking , his previous heart attack, the state of medical science and his overwork led to his premature death.)  


Keynes was definitely one of the greatest economists of the twentieth century, some would argue the greatest if greatness is measured in terms of lasting influence over economic policy as opposed to pure economic theory. He was , of course, much more than an academic economist. 


He was a policy adviser to the British treasury; a key member of the Bloomsbury circle that included many famous writers and artists like Virgina Woolf, her sister the painter Vanessa Bell , the painter Duncan Grant, the novelist E.M.Forster, the writer Lytton Strachey, the painter Dora Carrington,the art critic, art historian and painter Roger Fry, the writer and publisher Leonard Woolf, the writer Katherine Mansfield, and a number of other important literary, artistic and cultural figures who were at the centre of a movement in Edwardian England to break away from Victorian values and forge new paths in British culture. 


Keynes was also the co-founder and intellectual inspiration for the World Bank and the IMF, the co-inventor of the Bretton-Woods system for managing international exchange rates, the key figure in the British Treasury who negotiated the lend -lease agreements with the Americans and Canadians that helped Britain survive the war with Hitler in the period before the entry of the Americans after Pearl Harbour, the chief economic advisor to Prime Minister Lloyd George at the Paris Peace Talks after the first World War; the author of a number of best selling books and economic treatises including his epochal General Theory of Employment, Interest and Money (1936) which dramatically shifted the debate in economics about problems of prolonged unemployment and the failure of the market clearing model to explain the great depression; as well as best sellers like The Economic Consequences of the Peace which sold over 100,000 copies when it was published in 1920 and serious economic and philosophical treatises like A Tract on Monetary Reform (1923), the Treatise on Money (1930)and the Treatise on Probability(1921)-a fellowship dissertation at Cambridge completed in 1907 under the influence of Bertrand Russell and the supervision of Alfred Whitehead and W.Johnson -which was the basis of an important debate with the famous economist and mathemematician Frank Ramsey about probability and inductive method.  


Keynes would be appalled by the state of the world today and the state of economics. The monetarist counter-revolution, which has its origins in part in the work of Freidrich von Hayek, Keynes` chief rival during the 1930s but in its modern form in the work of Milton Friedman who successfully revived it from the dead during the 1960s and the stagflation of the 1970s, replaced Keynesian doctrine as the dominant orthodoxy in contemporary economics.  


Even worse, something called appropriately the new classical macroeconomics associated with the recrudescence of pure laissez-faire and reliance on ridding markets of rigidities thereby facilitating the operation of Say`s law which itself dates back to 1802 to govern economic theory and policy has become the orthodoxy of the moment. Keynes would have been appalled but probably not surprised by the triumph of such foolishness.He would roll up his sleeves and set to work to demolish these orthodoxies because they failed to pass his pre modern test of ethics. 


In that sense Keynes was, as Athol Fitzgibbons has correctly called him,(see his book Keynes`s Vision, Oxford:Oxford U. Press, 1988.) a pre-modern thinker and hence likely to be misunderstood, particularly in an era under the spell of post-modernism. Theories and policies which lead to unethical results which violate the common good must be faulty in their theoretical conception and must be revised. Hence, theories and policies which result in mass unemployment, increased poverty and distress cannot be correct.  


There is therefore much work to be done in reversing the damage of the past 30 years.