An Animated Introduction to Economist John Maynard Keynes

If you know any­thing about mod­ern eco­nom­ic the­o­ry, you’ve learned the names Mil­ton Fried­man and John May­nard Keynes—gen­er­al­ly pit­ted against each oth­er as rep­re­sent­ing the divide down the cen­ter in West­ern polit­i­cal econ­o­my. While more rad­i­cal thinkers like F.A. Hayek and, of course, Marx and Engels, hold sway over a sig­nif­i­cant part of the pop­u­la­tion, when it comes to the entrenched two-par­ty sys­tem in the U.S. and so-called mod­er­ate Demo­c­ra­t­ic and Repub­li­can politi­cians, we can hand­i­ly refer to Fried­man and Keynes, respec­tive­ly, as advo­cat­ing on the one hand very lit­tle gov­ern­ment inter­ven­tion into free mar­ket affairs and, on the oth­er, a sig­nif­i­cant, very vis­i­ble, guid­ing hand.

Keynes “believed that gov­ern­ments have it in their pow­er,” says Alain de Bot­ton in his School of Life ani­mat­ed intro­duc­tion above, “to solve some of the great­est ills of cap­i­tal­ism.” Reject­ing both com­mu­nism and “the utter wis­dom of the unfet­tered free mar­ket,” Keynes sought to chart a mid­dle way, the­o­riz­ing cap­i­tal­ist economies planned through “judi­cious injec­tions” of mon­ey and “wise reg­u­la­tions” to “smooth out the peaks and troughs to which all economies seem fate­ful­ly prone.” Keynes him­self was not prone to many finan­cial ups and downs. Born in 1883 in Cam­bridge to a “well-to-do aca­d­e­m­ic fam­i­ly,” writes the BBC, his “father was an econ­o­mist and a philoso­pher” and his moth­er “became the town’s first female may­or.” He “amassed a con­sid­er­able per­son­al for­tune from the finan­cial mar­kets” between the wars and became a “board mem­ber of a num­ber of com­pa­nies.”

At the height of the eco­nom­ic cri­sis in 1930, Keynes pub­lished an essay titled “Eco­nom­ic Pos­si­bil­i­ties for Our Grand­chil­dren,” in which he “out­lined his belief that most eco­nom­ic prob­lems could be over­come, and give way to an age where the chief chal­lenge for human beings would be how to occu­py their leisure time in con­di­tions of mass pros­per­i­ty.” His utopi­an out­look may have been part­ly con­di­tioned by his posi­tion as “part of the British estab­lish­ment.” But Keynes was a nuanced, cre­ative thinker, a mem­ber of the Blooms­bury group—Vir­ginia Woolf was one of his clos­est friends—who “rec­og­nized that good eco­nom­ics was as fun­da­men­tal to well-being as good paint­ing or lit­er­a­ture, and in a deep sense not fun­da­men­tal­ly dif­fer­ent in its search for the well­springs of ful­fill­ment, and its atten­tion to human error and blind­ness.”

Like Woolf, Keynes tend­ed to view human well-being through a nar­row class prism, with some of the ugly prej­u­dices such a view entails. Yet his the­o­ry began by con­sid­er­ing the needs of huge num­bers of unem­ployed in Britain and the U.S. who should not have to live in pre­car­i­ty and pover­ty, he rea­soned, until the mar­ket got around to cor­rect­ing itself, if it hap­pened to do so in their life­times. The inter­ven­tion­ist the­o­ries Keynes elab­o­rat­ed in his Gen­er­al The­o­ry of Employ­ment, Inter­est and Mon­ey, his great work of 1936, led to his cre­ation in 1944 of the IMF and the World Bank, two of the most con­tro­ver­sial glob­al insti­tu­tions of the past half-cen­tu­ry for what many see as their dis­as­trous, coer­cive med­dling in the eco­nom­ic affairs of poor­er nations.

While deficit spend­ing may be a de fac­to prac­tice of every gov­ern­ment admin­is­tra­tion, it is the the­o­ry of John May­nard Keynes that most attach­es it philo­soph­i­cal­ly to the cen­ter-left. And while it may be that more Key­ne­sian stim­u­lus spend­ing, with gov­ern­ment as the “pri­ma­ry shop­per in the land,” as Peter Coy argued in 2014, is just what a sag­ging, stag­nant world econ­o­my needs, the per­pet­u­al chal­lenge, as de Bot­ton points out, is the ques­tion of just “who should pay for the loans” gov­ern­ments issue, or the ser­vices it funds to buoy the cit­i­zen­ry. Few peo­ple, no mat­ter how wealthy, seem to want to shoul­der the bur­den, how­ev­er light it may be for some, even if Keynes’ “mul­ti­pli­er effect” can be shown to raise all boats once it takes hold.

Relat­ed Con­tent:

Every­day Eco­nom­ics: A New Course by Mar­gin­al Rev­o­lu­tion Uni­ver­si­ty Where Stu­dents Cre­ate the Syl­labus

A Short Course in Behav­ioral Eco­nom­ics

Free Online Eco­nom­ics Cours­es 

Josh Jones is a writer and musi­cian based in Durham, NC. Fol­low him at @jdmagness

by | Permalink | Comments (0) |

Sup­port Open Cul­ture

We’re hop­ing to rely on our loy­al read­ers rather than errat­ic ads. To sup­port Open Cul­ture’s edu­ca­tion­al mis­sion, please con­sid­er mak­ing a dona­tion. We accept Pay­Pal, Ven­mo (@openculture), Patre­on and Cryp­to! Please find all options here. We thank you!

Leave a Reply

Open Culture was founded by Dan Colman.