John Maynard Keynes (1883-1946)

D.E. Moggridge

Introduction

John Maynard Keynes was a product of reforming Victorian Cambridge which admitted non-conformists to University degrees and expanded educational activities for women and pre-university candidates. His father, John Neville Keynes (1852-1949), was the first non-conformist Fellow of Pembroke College. His mother, Florence Ada Brown (1861-1958), daughter of John Brown, pastor of the Bunyan Meeting, Bedford, and biographer of Bunyan, was an early member of Newnham College, where she took a Cambridge Higher Certificate. Neville Keynes was University Lecturer in Moral Science, 1884-1911, and a University civil servant, first in the Local Examinations Syndicate, 1884-1910, and later as Registrary, 1910-1925. In 1914, Florence was the first woman elected to Cambridge town council, a post she held for three decades, and its first woman mayor, 1932-1933.

Maynard was educated at Eton and King’s College, Cambridge, where he was equal 12th Wrangler in mathematics in 1905. He spent 1905-1906 preparing for the civil service examination—including a term attending Marshall’s lectures, writing papers for him, and reading a formidable amount of economics, which turned out to be his worst subject in the examination—in which he came second overall. The first candidate chose to enter the Treasury, so

D.E. Moggridge (H)

Professor Emeritus Economics, University of Toronto, Canada e-mail: This email address is being protected from spam bots, you need Javascript enabled to view it

R.A. Cord (ed.), The Palgrave Companion to Cambridge Economics,

DOI 10.1057/978-1-137-41233-1_23

Keynes went into the India Office (October 1906-June 1908). He returned to Cambridge at the invitation of Marshall to lecture in the Economics Tripos, created in 1903. He became a Fellow of King’s in March 1909 and Girdlers’ Lecturer in Economics in 1910. In 1911, he succeeded Edgeworth as Editor of the Economic Journal, a post he held until 1945. Back in Cambridge, he maintained contact with the India Office. His first book Indian Currency and Finance (1913) won him membership of the Royal Commission on Indian Currency and Finance of 1913-1914, where he made further contacts that stood him in good stead when he briefly advised the Treasury on emergency monetary policy after the outbreak of war in 1914.

In January 1915, Keynes joined the Treasury full-time. Initially, his activities covered a wide range of subjects, but he soon concentrated on Britain’s overseas financial affairs. When A’ Division was created in 1917 to deal with these, Keynes became its head. In 1919, he was the Principal Treasury Representative at the Paris Peace Conference. He resigned his Treasury position and left Paris in June 1919 over the terms of the Peace Treaty. On his return to England, he embarked on The Economic Consequences of the Peace, which appeared in England in December. It made him famous and wealthy.

He gave up his Girdlers’ Lectureship in April 1920, when he also became a Supernumerary Fellow of King’s. After that, his connections with Cambridge were almost non-pecuniary but still substantial: in November 1919, he became Second Bursar of King’s, First Bursar 1924-1946. He continued to give eight University lectures per year dealing with his work in progress until 1937. He continued supervising students for King’s. He was elected to the Council of the Senate on the reform ticket in 1920 and played an important role in the transformation of Cambridge as an academic institution after the Report of the Asquith Royal Commission, the resulting Act of Parliament and the subsequent revision of University and College statutes. That job completed he stood down from the Council of the Senate in 1926. For the same reason his father retired as Registrary at the end of 1925. After 1920, Maynard supported himself primarily through his journalism, City directorships, and his own investment income. From Tuesday to Friday, he lived at 46 Gordon Square in London, spent long weekends in King’s and vacations in the country, after 1925 at Tilton in Sussex.

Keynes continued as an adviser to governments. He became more regularly involved after the formation of the Economic Advisory Council (EAC) in 1930 and its various committees, notably the Committee on Economic

Information, which met regularly between 1931 and 1939 and became an important influence on government thinking (Howson and Winch 1977). After the outbreak of war in 1939, his influence grew larger as regards both domestic as well as overseas finance, both in the prosecution of the war and planning for the post-war world. He was given a room in the Treasury from August 1940. His position was anomalous. He was a member of the Chancellor of the Exchequer’s Consultative Council, a position that did not entitle him to a room in the building nor to lead British delegations overseas. He ‘was just “Keynes”, free to shoot at anybody—and anybody, regardless of rank, was free to go to him with his troubles’ (Proctor 1949: 27). Being ‘Just Keynes’ had its advantages for he could take these troubles to where they mattered, even to Churchill, and set further enquiries in train, sometimes to be dealt with by himself: ‘He was the strangest civil servant Whitehall has ever seen, less the civil servant and more the master of those he served than any I have ever seen’ (Salter 1967: 88-89).

‘If Maynard Keynes had died in 1925 it would have been difficult for those who knew intimately the power and originality of his mind to have convinced those who did not know him of the full measure of Keynes’s ability’ (Austin Robinson 1947: 35). Support for this position comes from Patrick Deutscher’s (1990: 188-194) tabulations of citations in the fields of money and macroeconomics from the Index of Economic Journals. For the years 1920-1930, he ranked tenth with an average of around one citation per year—Pigou ranked third, Marshall fourth, and Hawtrey and Robertson joint sixth. In contrast, for 1931-1935, 1936-1939, and 1940-1944 he ranked first, with Robertson second in the first two periods and fourth in the third, Hayek third in the first, seventh in the second, and Hicks third in the second and second in the third. Further support could be drawn from Keynes’s Tract on Monetary Reform, albeit a reworking of articles from the Manchester Guardian Reconstruction Supplements, which was basically Marshallian with a partial reworking of Cassel’s theory of purchasing power parity, a treatment of the inflation tax (which Keynes had first discussed in a Treasury memorandum in 1915) and a consideration of cyclical issues which was ‘unoriginal’ (Laidler 1999: 112).

In examining the transformation of Keynes’s position, I should like to look at the bases for the changes in his influence as he wrote and discussed A Treatise on Money (1930) and The General Theory of Employment, Interest and Money (1936) and his contributions to discussions of international monetary reform in the 1930s and 1940s.