John M. Keynes (Scientists)

(June 5, 1883 – April 21, 1946) was one of the most influential economists of the twentieth Century. His groundbreaking work in the 1930s led to the development of a whole new economic discipline dedicated to macroeconomics.

John M. Keynes was born in Cambridge. He was bright scholar and studied Maths at Kings College Cambridge. The great economist Alfred Marshall encouraged Keynes to take up the relatively new science of Economics.

After the end of the First World War, Keynes took part in the British delegation to the Treaty of Versailles. Keynes was shocked at the level of reparations the Allies wanted to impose on the Germans. Keynes resigned from the British delegation saying it was a recipe for bankrupting Germany. He wrote the Economic Consequences of the Peace in 1919, accurately predicting the difficulties Germany would have and the consequent political resentment at such as harsh peace treaty.

In the 1920s, Keynes was a fearsome critique of Britain's decision to remain in the gold standards at a pre 1914 level. Keynes argued that this high value of sterling made life difficult for British exporters and was the main reason for the deflation and high unemployment the UK experienced.

It was the Great Depression of 1929-39, which gave Keynes the opportunity to disparage the classical orthodoxy which dominated economic theory at the time. At the outbreak of the Great Depression, the classical response was to rely on free markets. The classical response was to try and balance the government budget, through tax increases and government spending. But, in countries like the UK, this decision to reduce government spending made the recession deeper.

Keynes argued the government needed to do the exact opposite. He said, although free markets may solve the problem in the long run. - In the long run we are all dead. Therefore, Keynes argued the government should borrow to try and stimulate unemployed resources. Through government spending commitments, Keynes argued aggregate demand would increase and this would help reduce the length of the recession.

In the 1930s, Keynes' advice was generally ignored, but, his ground breaking work - The General theory of Employment, Interest and Money (1936) provided a framework for macroeconomics and was a radical departure from the more limited classical framework. After the war, to varying degrees, government's in the West, pursued Keynesian demand management in an attempt to achieve full employment. This led the US president R. Nixon to declare in the 1960s - "we're all Keynesians now."

With the credit crunch of 2008 and the serious recession, there has been renewed interest in the work of Keynes and his policy suggestions for economic depressions.

Outside economics, Keynes was lover of the arts, opera and noted with wit. He used his knowledge of economics to brilliant effect in making a fortune on the stock market. He was a member of the Bloomsbury Group, a fashionable society of Cambridge graduates, who also included Virginia Woolf and E.M.Forster

Keynes married the ballerina Lydia Lopokova, but, had a number of affairs with both women and men.

He tragically died from a heart attack in 1946, just as he was helping to implement the post war economic settlement and set up the Woods system.