John Maynard Keynes: Difference between revisions

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(1926). After the onset on the Depression in 1929, Keynes began to address the problems of unemployment. In a series of articles, ''The Means to Prosperity'', written in ''The Times'' of London, Keynes began to argue that the government should "spend its way out of the depression".
(1926). After the onset on the Depression in 1929, Keynes began to address the problems of unemployment. In a series of articles, ''The Means to Prosperity'', written in ''The Times'' of London, Keynes began to argue that the government should "spend its way out of the depression".


On 1930 Keynes published his his first major work on economics ''A Treatise on Money'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> which set out his ''[[Wicksellian Theory of the Credit Cycle|Wicksellian Theory]]'' <ref name=WICELLIANHET> [http://cepa.newschool.edu/het/essays/money/cumulative.htm Wicksellian Theory of the Credit Cycle]</ref> of the credit cycle. In this two-volume work, which Keynes intended to become his "magnum opus" - a  dense book, full of brilliant insights, but incomprehensible as a whole and in foal with inconsistencies - Keynes attempted with little success to improve upon of the Cambridge version of the ''quantity theory of money'', laying out the first rudiments of a ''liquidity preference theory'' <ref name=LIQPREF>[http://www.mhhe.com/economics/mcconnell15e/student/olc/chap13origin.mhtml Liquidity Preference]</ref> of interest. Keynes's new book came under immediate attack form [[Friedrich von Hayek]] <ref name=HAYEKHET>[http://cepa.newschool.edu/het/profiles/hayek.htm Friedrich von Hayek]</ref>, the ''[[laissez-faire]]'' advocate, who wrote a review of the ''Treatise'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> so harsh that Keynes decided to request [[Piero Sraffa|Sraffa]] <ref name=SRAFFAHET>[http://cepa.newschool.edu/het/profiles/sraffa.htm Piero Sraffa]</ref> to write a review of Hayek's own competing work and condemn it - no less harshly - so both authors could get even as far as inconsistencies were concerned.  The Keynes-Hayek conflict initiated an endless battle in the Cambridge-L.S.E. <ref name=CAMBLSEHET>[http://cepa.newschool.edu/het/profiles/hayek.htm Cambridge-L.S.E.]</ref> circuit, its reflexes extending to the present day.
On 1930 Keynes published his his first major work on economics ''A Treatise on Money'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> which set out his ''[[Wicksellian Theory of the Credit Cycle|Wicksellian Theory]]'' <ref name=WICELLIANHET> [http://cepa.newschool.edu/het/essays/money/cumulative.htm Wicksellian Theory of the Credit Cycle]</ref> of the credit cycle. In this two-volume work, which Keynes intended to become his "magnum opus" - a  dense book, full of brilliant insights, but incomprehensible as a whole and in foal with inconsistencies - Keynes attempted with little success to improve upon of the Cambridge version of the ''quantity theory of money'', laying out the first rudiments of a ''liquidity preference theory'' <ref name=LIQPREF>[http://www.mhhe.com/economics/mcconnell15e/student/olc/chap13origin.mhtml Liquidity Preference]</ref> of interest. Keynes's new book came under immediate attack form [[Friedrich von Hayek]] <ref name=HAYEKHET>[http://cepa.newschool.edu/het/profiles/hayek.htm Friedrich von Hayek]</ref>, the ''[[laissez-faire]]'' advocate, who wrote a review of the ''Treatise'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> so harsh that Keynes decided to request [[Piero Sraffa|Sraffa]] <ref name=SRAFFAHET>[http://cepa.newschool.edu/het/profiles/sraffa.htm Piero Sraffa]</ref> to write a review of Hayek's <ref name=HAYEKHET>[http://cepa.newschool.edu/het/profiles/hayek.htm Friedrich von Hayek]</ref> own competing work and condemn it - no less harshly - so both authors could get even as far as inconsistencies were concerned.  The Keynes-Hayek conflict initiated an endless battle in the Cambridge-L.S.E. <ref name=CAMBLSEHET>[http://cepa.newschool.edu/het/profiles/hayek.htm Cambridge-L.S.E.]</ref> circuit, its reflexes extending to the present day.


The ''Treatise'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> and its critics led to the formation of a reading group, which became known as ''"the Circus"'' <ref name=CIRCUS>[http://cepa.newschool.edu/het/schools/cambridge.htm#circus Keyne's "the Circus"]</ref> formed, among others, by the young Cambridge economists [[Richard Kahn]] <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref>, [[Joan Robinson]] <ref name=ROBINSONHET>[http://cepa.newschool.edu/het/profiles/robinson.htm Joan Robinson]</ref>, her husband [[Austin Robinson]] <ref name=AUSTINROBHET>[http://cepa.newschool.edu/het/schools/english.htm#austin Edwin Austin Gossage Robinson]</ref>, [[James Meade]] <ref name=MEADEHET>[http://cepa.newschool.edu/het/profiles/meade.htm James E. Meade]</ref> and [[Piero Sraffa]] <ref name=SRAFFAHET>[http://cepa.newschool.edu/het/profiles/sraffa.htm Piero Sraffa]</ref>.  Kahn <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref> dutifully delivered reports of ''"the Circus's"'' discussions to Keynes, who subsequently began revising his ideas.  One resulting criticism of the ''Treatise'' was that it failed to provide a theory of the determination of output and employment as a whole -- a particular pertinent question given the huge amount of unemployment at the time.   
The ''Treatise'' <ref name=KEYNES2>KEYNES, John Maynard. ''A Treatise on Money''. New York: Harcourt, Brace and Co.; 1st American edition; 1930 </ref> and its critics led to the formation of a reading group, which became known as ''"the Circus"'' <ref name=CIRCUS>[http://cepa.newschool.edu/het/schools/cambridge.htm#circus Keyne's "the Circus"]</ref> formed, among others, by the young Cambridge economists [[Richard Kahn]] <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref>, [[Joan Robinson]] <ref name=ROBINSONHET>[http://cepa.newschool.edu/het/profiles/robinson.htm Joan Robinson]</ref>, her husband [[Austin Robinson]] <ref name=AUSTINROBHET>[http://cepa.newschool.edu/het/schools/english.htm#austin Edwin Austin Gossage Robinson]</ref>, [[James Meade]] <ref name=MEADEHET>[http://cepa.newschool.edu/het/profiles/meade.htm James E. Meade]</ref> and [[Piero Sraffa]] <ref name=SRAFFAHET>[http://cepa.newschool.edu/het/profiles/sraffa.htm Piero Sraffa]</ref>.  Kahn <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref> dutifully delivered reports of ''"the Circus's"'' discussions to Keynes, who subsequently began revising his ideas.  One resulting criticism of the ''Treatise'' was that it failed to provide a theory of the determination of output and employment as a whole -- a particular pertinent question given the huge amount of unemployment at the time.   
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The solution to the enigma -- the ''theory of the income-expenditure multiplier'' -- was provided to Keynes by [[Richard  Kahn]] <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref> (1931) in an article which became the basis of the future Keynesian revolution. Keynes began, tentatively, announcing his new idea in articles and pamphlets during 1933, submitted drafts of his new book to the ''"Circus"'' <ref name=CIRCUS>[http://cepa.newschool.edu/het/schools/cambridge.htm#circus Keyne's "the Circus"]</ref> and other fellow economists for review and dissection.  His ideas on the ''marginal efficiency of investment'' took longer to work out.
The solution to the enigma -- the ''theory of the income-expenditure multiplier'' -- was provided to Keynes by [[Richard  Kahn]] <ref name=KHANHET>[http://cepa.newschool.edu/het/profiles/kahn.htm Richard F. Kahn]</ref> (1931) in an article which became the basis of the future Keynesian revolution. Keynes began, tentatively, announcing his new idea in articles and pamphlets during 1933, submitted drafts of his new book to the ''"Circus"'' <ref name=CIRCUS>[http://cepa.newschool.edu/het/schools/cambridge.htm#circus Keyne's "the Circus"]</ref> and other fellow economists for review and dissection.  His ideas on the ''marginal efficiency of investment'' took longer to work out.


Finally in 1936 Keynes published his "magnum opus" ''The General Theory of Employment, Interest and Money'' <ref name=GENERAL>[http://cepa.newschool.edu/het/texts/keynes/gtcont.htm KEYNES, John Maynard. ''General Theory of Employment, Interest and Money, The''. London: Macmillan Press; New York: St. Martin's Press; 1936]</ref> which gave a strong theoretical support to his ideas about the causes of the economic Depression of the thirties and faced the classical economists who, in Keynes's opinion, were recommending policies which actually aggravated the recession. Keynes's concepts were already being implemented, simultaneously and intuitively, by Horace Greely Hjalmar Schacht <ref name=SCHACHT>[http://pdftohtml.markoer.org/pdf2html.php?url=http://www.people.fas.harvard.edu/~jfrieden/Selected%20Articles/Books/GlobalCapitalism/EconomicPrincipals.pdf  WARSH, David; Editor. ''Hjalmar Horace Greeley Schacht and Other Citizens of the Twentieth Century''.<small> in: www.people.fas.harvard.edu; April 9, 2006</small>]</ref> the minister of economics (1934–37) in the National Socialist government of Adolf Hitler as well as by Roosevelt's  ''New Deal'' in the United States, a few years before Keynes's book publication. In 1940 Keynes published ''How to Pay for the War'' <ref name=HOWTOPAY>KEYNES, John Maynard. ''How to Pay for the War: a Radical Plan for the Chancellor of the Exchequer''. London: Macmillan. 1940. 1st Ed.</ref>
Finally in 1936 Keynes published what actually became his "magnum opus" ''The General Theory of Employment, Interest and Money'' <ref name=GENERAL>[http://cepa.newschool.edu/het/texts/keynes/gtcont.htm KEYNES, John Maynard. ''General Theory of Employment, Interest and Money, The''. London: Macmillan Press; New York: St. Martin's Press; 1936]</ref>. This new book gave a strong theoretical support to Keyne's ideas about the causes of the economic Depression of the thirties and confrnted the classical economists who, in Keynes's opinion, were recommending policies which aggravated the recession. Keynes's concepts were already being implemented, simultaneously and intuitively, by Horace Greely Hjalmar Schacht <ref name=SCHACHT>[http://pdftohtml.markoer.org/pdf2html.php?url=http://www.people.fas.harvard.edu/~jfrieden/Selected%20Articles/Books/GlobalCapitalism/EconomicPrincipals.pdf  WARSH, David; Editor. ''Hjalmar Horace Greeley Schacht and Other Citizens of the Twentieth Century''.<small> in: www.people.fas.harvard.edu; April 9, 2006</small>]</ref> the minister of economics (1934–37) in the National Socialist government of Adolf Hitler as well as by Roosevelt's  ''New Deal'' in the United States, a few years before Keynes's book publication. As it has been said by someone, "many people, specially some politicians, alredy knew that the classical economic advices for handling the recession were bad politics; after the publication of ''The General Theory of Employment, Interest and Money'' <ref name=GENERAL>[http://cepa.newschool.edu/het/texts/keynes/gtcont.htm KEYNES, John Maynard. ''General Theory of Employment, Interest and Money, The''. London: Macmillan Press; New York: St. Martin's Press; 1936]</ref> they knew it was also bad Economics."
 
In 1940 Keynes published ''How to Pay for the War'' <ref name=HOWTOPAY>KEYNES, John Maynard. ''How to Pay for the War: a Radical Plan for the Chancellor of the Exchequer''. London: Macmillan. 1940. 1st Ed.</ref>


==References==
==References==

Revision as of 16:31, 9 April 2007

<This article is under construction>
For more information, see: Economics.

John Maynard Keynes, 1st Baron of Tilton (Cambridge, England, June 5, 1883 - London, England, April 21, 1946) [1] was the son of John Neville Keynes, registrar of the University of Cambridge and eminent logician and economist, and Florence Ada Brown, advocate for the poor, first female Councillor of Cambridge Borough Council, and later mayor of Cambridge. He was educated at Eton and King's College, Cambridge, and began a short career in the civil service, where he was assigned to the India Office from 1906 to 1909. There he acquired an intimate knowledge of the government service. A reorganization of the Economics Department at Cambridge opened up an opportunity for Keynes, who had earlier come under the influence of its head, Alfred Marshall. Resigning from the civil service in 1909 Keynes was elected fellow of King's College and returned to Cambridge. In 1911 he was chosen as editor of the Economic Journal, the publication of the Royal Economic Society and one of the leading professional journals.

Keynes was greatly influenced by Alfred Marshall (1842–1924) who, besides being a brilliant and original theorist, also passionately believed that economics should contribute to human well-being and that economics students should know as much about the economic and social facts of the real world as the theoretical approaches through which they could be organised and understood. Interested in literature and philosophy, Keynes was invited to join the "Apostles" (The Cambridge Conversazione Society) [2], a secret society of dons and undergraduates who met to discuss ethical and political issues. The group included Lytton Strachey, Leonard Woolf, E. M. Forster and Bertrand Russell. Woolf and Russell brought him into contact with leaders of the Fabian Society [3], including Sidney Webb, Beatrice Webb and George Bernard Shaw.

Keynes became one the most important figures in the entire history of economics. He revolutionized economics with his classic book, The General Theory of Employment, Interest and Money [4] (1936). This is probably the most influential social science treatise of the XXth Century. It changed the way the world looked at the economy and the role of government in society.

Major works published:

In 1913, shortly after he was appointed to the Royal Commission on Indian Currency and Finance, Keynes published his first book, Indian Currency and Finance [5] . This book has been referred to as the best in the English language on the gold exchange standard. By 1919 Keynes was the senior Treasury official sent as part of the British delegation to the Versailles Peace Conference. Keynes disagreed with the harsh terms negotiated at Versailles and, after resigning, returned to England and wrote The Economic Consequences of the Peace [6] (1919), a controversial book which argued that the war reparations imposed on Germany could not be paid and turned Keynes a worldwide famous economist. The controversy over the Treaty of Versailles, signed in Paris in 1919, soon subsided because Keynes' predictions almost immediately started to materialize. Keynes went to Russia in 1926, interested in the study of the economic measures being taken by the communist regime. Upon his return he wrote The End of Laissez-Faire [7] (1926). After the onset on the Depression in 1929, Keynes began to address the problems of unemployment. In a series of articles, The Means to Prosperity, written in The Times of London, Keynes began to argue that the government should "spend its way out of the depression".

On 1930 Keynes published his his first major work on economics A Treatise on Money [8] which set out his Wicksellian Theory [9] of the credit cycle. In this two-volume work, which Keynes intended to become his "magnum opus" - a dense book, full of brilliant insights, but incomprehensible as a whole and in foal with inconsistencies - Keynes attempted with little success to improve upon of the Cambridge version of the quantity theory of money, laying out the first rudiments of a liquidity preference theory [10] of interest. Keynes's new book came under immediate attack form Friedrich von Hayek [11], the laissez-faire advocate, who wrote a review of the Treatise [8] so harsh that Keynes decided to request Sraffa [12] to write a review of Hayek's [11] own competing work and condemn it - no less harshly - so both authors could get even as far as inconsistencies were concerned. The Keynes-Hayek conflict initiated an endless battle in the Cambridge-L.S.E. [13] circuit, its reflexes extending to the present day.

The Treatise [8] and its critics led to the formation of a reading group, which became known as "the Circus" [14] formed, among others, by the young Cambridge economists Richard Kahn [15], Joan Robinson [16], her husband Austin Robinson [17], James Meade [18] and Piero Sraffa [12]. Kahn [15] dutifully delivered reports of "the Circus's" discussions to Keynes, who subsequently began revising his ideas. One resulting criticism of the Treatise was that it failed to provide a theory of the determination of output and employment as a whole -- a particular pertinent question given the huge amount of unemployment at the time.

The solution to the enigma -- the theory of the income-expenditure multiplier -- was provided to Keynes by Richard Kahn [15] (1931) in an article which became the basis of the future Keynesian revolution. Keynes began, tentatively, announcing his new idea in articles and pamphlets during 1933, submitted drafts of his new book to the "Circus" [14] and other fellow economists for review and dissection. His ideas on the marginal efficiency of investment took longer to work out.

Finally in 1936 Keynes published what actually became his "magnum opus" The General Theory of Employment, Interest and Money [4]. This new book gave a strong theoretical support to Keyne's ideas about the causes of the economic Depression of the thirties and confrnted the classical economists who, in Keynes's opinion, were recommending policies which aggravated the recession. Keynes's concepts were already being implemented, simultaneously and intuitively, by Horace Greely Hjalmar Schacht [19] the minister of economics (1934–37) in the National Socialist government of Adolf Hitler as well as by Roosevelt's New Deal in the United States, a few years before Keynes's book publication. As it has been said by someone, "many people, specially some politicians, alredy knew that the classical economic advices for handling the recession were bad politics; after the publication of The General Theory of Employment, Interest and Money [4] they knew it was also bad Economics."

In 1940 Keynes published How to Pay for the War [20]

References

  1. ↑ Keyne's full biography. Encyclopedia of World Biography
  2. ↑ Cambridge Apostles (The Cambridge Conversazione Society).
  3. ↑ Fabian Society Homepage
  4. ↑ 4.0 4.1 4.2 KEYNES, John Maynard. General Theory of Employment, Interest and Money, The. London: Macmillan Press; New York: St. Martin's Press; 1936
  5. ↑ KEYNES, John Maynard. Indian Currency and Finance. London: MacMillan & Co., Ltd., 1913
  6. ↑ KEYNES, John Maynard. The Economic Consequences of the Peace. New York: Harcourt, Brace and Howe, 1920 E-text prepared by Rick Niles, Jon King, and the Project Gutenberg Online
  7. ↑ KEYNES, John Maynard. The End of Laissez-Faire. Great Minds Series, Prometheus Books.Online edition preceded by pamphletary anti-Keynes "Note" by the online editor ISBN 1591022681
  8. ↑ 8.0 8.1 8.2 KEYNES, John Maynard. A Treatise on Money. New York: Harcourt, Brace and Co.; 1st American edition; 1930
  9. ↑ Wicksellian Theory of the Credit Cycle
  10. ↑ Liquidity Preference
  11. ↑ 11.0 11.1 Friedrich von Hayek
  12. ↑ 12.0 12.1 Piero Sraffa
  13. ↑ Cambridge-L.S.E.
  14. ↑ 14.0 14.1 Keyne's "the Circus"
  15. ↑ 15.0 15.1 15.2 Richard F. Kahn
  16. ↑ Joan Robinson
  17. ↑ Edwin Austin Gossage Robinson
  18. ↑ James E. Meade
  19. ↑ WARSH, David; Editor. Hjalmar Horace Greeley Schacht and Other Citizens of the Twentieth Century. in: www.people.fas.harvard.edu; April 9, 2006
  20. ↑ KEYNES, John Maynard. How to Pay for the War: a Radical Plan for the Chancellor of the Exchequer. London: Macmillan. 1940. 1st Ed.

Bibliography




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