John Maynard Keynes
John Maynard Keynes changed how governments understand recessions, and designed much of the postwar international financial system. Born in Cambridge in 1883 to an economist father and a mother who became the city's mayor, he was educated at Eton and King's College, Cambridge, where he read mathematics and was drawn into the Bloomsbury Group alongside Virginia Woolf and Lytton Strachey. He worked at the India Office, lectured at Cambridge, and joined the Treasury during the First World War. He resigned in 1919 in protest at the Versailles settlement and wrote The Economic Consequences of the Peace, arguing that the reparations imposed on Germany were beyond its capacity to pay and would produce economic ruin and political extremism. It made him famous and proved substantially right. His central work, The General Theory of Employment, Interest and Money, was published in 1936 during the Depression. Against the orthodox view that markets return to full employment automatically, he argued that an economy can settle at a persistent equilibrium with high unemployment, because output is driven by aggregate demand and demand can be chronically deficient. When private spending collapses, saving makes things worse, and government should borrow and spend to replace it. In the long run, he had written earlier, we are all dead. He criticised the return to the gold standard at the prewar parity in 1925, correctly predicting deflation and unemployment. He led the British delegation at Bretton Woods in 1944, where his proposal for an international clearing union and a supranational currency was defeated by the American plan; the IMF and World Bank emerged from those negotiations. He also speculated successfully, managed King's endowment, and founded what became the Arts Council. He died in 1946.
- Lived: 1883 CE – 1946 CE
- Nationality: British
- Roles: economist
