John Maynard Keynes is recognized as one of the most prominent economists of the 20th century let alone his generation. He transformed the lens through which macroeconomics was viewed and studied, giving birth to a whole new school of thought termed “Keynesian” economics, which emphasized the need for government intervention to save national economies from stagnation and stimulate growth.
Keynes was born in Cambridge, England, in 1883 in a relatively well to do family. Both his parents held associations with the Cambridge University, which paved the way for his own matriculation in to the institution. There he was influenced by another world famous economist, Alfred Marshall, who encouraged Keynes to drop his interest in mathematics and philosophy in an attempt to push him towards economics. Keynes eventually completed his B.A. and M.A. in the years 1905 and 1909 respectively.
Keynes joined the British civil service soon after his graduation from Cambridge. It was during this endeavor that he gathered substantial material to be used in his first book, “Indian Currency and Finance”, where he explored the dynamics of the monetary system in India. Keynes eventually joined the British Treasury where he made significant inroads in a short space of time. He assumed the role of the chief representative of the Treasury in 1919 due to his strong position in the government. However Keynes found his position in the Treasury untenable after learning about the Versailles peace treaty in the aftermath of the First World War. He condemned the British government’s unreasonable punitive reparation demands from Germany and believed that retaliation from the latter was inevitable. These views were published in his book, ‘The Economic Consequences of the Peace‘, which topped the best sellers charts, bringing him worldwide fame.
John Maynard Keynes returned to Cambridge as an instructor in 1919. During his time there he was introduced to the Bloomsbury group, an exclusive entity comprising of elite scholars, writers, artists, and other intellectuals. His induction in to the group helped him become a prolific writer and speaker. During the years of the Great Depression, Keynes published some of his best works which shed light on the Britain’s economic despairs. His book ‘The General Theory of Unemployment, Interest, and Money’ discarded the notion that the prevalent unemployment featuring Britain during the Depression would be rectified via free market forces. Keynes argued that employment arises due to demand for goods and services, and if it is to be increased then the government should escalate aggregate demand within the economy by increasing its own levels of spending. Such measures were necessary to surge economic activity or high unemployment would persist.
Keynes advocacy of the government’s crucial interventionist role in protecting and regulating economies by tweaking fiscal and monetary components was revolutionary. “Keynesian economics” as it became known, began to be employed by a number of Western states after its advent. Keynes groundbreaking work brought him enhanced status, exemplified by his appointment by the British Government to serve as an advisor during negotiations with other nations to reestablish economic order after the Second World War. He led a number of delegations and played a vital in the planning process of the creation of the World Bank and the International Monetary Fund. Keynes was given the title of a Lord in 1942, and he passed away in 1946. Economists today continue to utilize Keynes work, especially The General Theory, which provided a sound foundation for such scholars to build on and construct their own theories.