Galbraith on Keynes

Galbraith on Keynes In a classic, The“ Age of Uncertainty”, the author, late economist John Kenneth Galbraith, writes on Lord Keynes. “Keynes was born in 1883, the year that Karl Marx died. His mother, Florence Ada Keynes, a woman of high intelligence, was diligent in good works, a respected community leader and, in late life, the mayor of < ?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Cambridge. His father, John Neville Keynes, was an economist, logician and for some fifteen years the Registrary, which is to say the chief administrative officer of the University of Cambridge. Maynard, as he was always known to friends, went to Eton, where his first interest was in mathematics. Then he went to King's College, after Trinity the most prestigious of the Cambridge colleges and the one noted especially for its economists. Keynes was to add both to its prestige in economics and, as its bursar, to its wealth. Churchill held – where I confess escapes me – that great men usually have unhappy childhoods. At both Eton and Cambridge, Keynes, by his own account and that of his contemporaries, was exceedingly happy. The point could be important. Keynes never sought to change the world out of any sense of personal dissatisfaction or discontent. Marx swore that the bourgeoisie would suffer for his poverty and his carbuncles. Keynes experienced neither poverty nor boils. For him the world was excellent. While at King's, Keynes was one of a group of ardent young intellectuals which included Lytton Strachey, Leonard Woolf and Clive Bell. All, with wives – Virginia Woolf, Vanessa Bell- and lovers, would assemble later in London as the Bloomsbury Group. All were much under the influence of the philosopher, G. E. Moore. In later years Keynes told of what he had from Moore. It was the belief that: “The appropriate subjects of passionate contemplation and communion were a beloved person, beauty and truth, and one's prime objects in life were love, the creation and enjoyment of aesthetic experience and the pursuit of knowledge. Of these, love came a long way first.” With these thoughts, inevitably, Keynes found his interest shifting from mathematics to economics. The more important instrument of the change was Alfred Marshall, who was not at King's but along the river in the equally beautiful precincts of St. John's, known as John's. Marshall, who combined the reputation of a prophet with the aura of a saint, presided over the world of Anglo-American economics in nearly undisputed eminence for forty years – from 1885 until his death in 1924. When I was first introduced to economics at Berkeley in 1931, it was Marshall's Principles students were required to read. It was a majestic book. It was also superb for discouraging second-rate scholars from any further pursuit of the subject. www.capitalideasonline.com Page - 1 Galbraith on Keynes When he finished with Cambridge in 1905, Keynes sat for the Civil Service examinations and did badly in economics. His explanation was characteristic: “The examiners presumably knew less than I did.” But this deficiency was not fatal, and he went to the India Office. Here he relieved his boredom by work on books-a technical treatise on the theory of probability and his later book on Indian currency. Neither much changed the world or economic thought; soon he returned to Cambridge on a fellowship provided personally by Alfred Marshall. It was the economics of Alfred Marshall- the notion, in particular, of a benign tendency to an equilibrium where all willing workers were employed – that Keynes would do most to make obsolete. War and the Peace When the Great War came, Keynes was not attracted to the trenches. He went to the Treasury, where his job was to take British earnings from trade, proceeds from loans floated in the United States and returns from securities conscripted and sold abroad and make them cover all possible overseas war purchases. And he helped the French and the Russians do the same. No magic was involved, as many have since suggested. Economic skill does not extend to getting very much for nothing. But an adept and resourceful mind was useful, and this Keynes had. In the course of time Keynes received a notice to report for military service. He sent it back. When the war was over, he was a natural choice for the British delegation to the Peace Conference. That, from the official view, was an appalling mistake. The mood in Paris in the early months of 1919 was vengeful, myopic, indifferent to economic realities, and it horrified Keynes. So did his fellow civil servants. So did the politicians. In June he resigned and came home, and, in the next two months, he composed the greatest polemical document of modern times. It was against the reparations clauses of the Treaty and, as he saw it, the Carthaginian peace. Europe would only punish itself by exacting, or seeking to exact, more from the Germans than they had the practical capacity to pay. Restraint by the victors was not a matter of compassion but of elementary self- interest. The case was documented with figures and written with passion. In memorable passages Keynes gave his impressions of the men who were writing the peace. Woodrow Wilson he called “this blind and deaf Don Quixote.” Of Clemenceau he said: “He had one illusion – France; and one disillusion, mankind . .” On Lloyd George he was rather severe: How can I convey to the reader, who does not know him, any just impression of this extra-ordinary figure of our www.capitalideasonline.com Page - 2 Galbraith on Keynes time, this syren, this goat-footed bard, this half-human visitor to our age from the hag-ridden magic and enchanted woods of Celtic antiquity. Alas, no man is of perfect courage. Keynes deleted this passage on Lloyd George at the last moment. The Economic Consequences of the Peace was published before the end of 1919. The judgment of the British Establishment was rendered by The Times: “Mr. Keynes may be a 'clever' economist. He may have been a useful Treasury official. But in writing this book, he has rendered the Allies a disservice for which their enemies will, doubtless, be grateful.” In time there would be a responsible view that Keynes went too far – that in calculating the limits on Germany's ability to pay, he was excessively orthodox. Perhaps he contributed to the Germans' sense of persecution and injustice that Hitler so effectively exploited. But the technique of The Times attack should also be noticed. It was not that the great men of the Treaty and the Establishment were suffering under the onslaught, although that, of course, was the real point. Rather, the criticism was causing rejoicing to the nation's enemies. It's a device to which highly respectable men regularly resort. “Even if you are right, it is only the Communists who will be pleased.” And it is when they are wrong that great men most resent the breaking of ranks. So they greatly resented Keynes. For the next twenty years he headed an insurance company and speculated in shares, commodities and foreign exchange, sometimes losing, more often winning. He also taught economics, wrote extensively and applied himself to the arts, old books and his Bloomsbury friends. But on public matters he was kept outside. He had broken the rules. We saw earlier that, as often as not, the intelligent man is not sought out. Rather, he is excluded as a threat. Keynes's exclusion was his good fortune. The curse of the public man is that he first accommodates his tongue and eventually his thoughts to his public position. Presently saying nothing but saying it nicely becomes a habit. On the outside one can at least have the pleasure of inflicting the truth. Also, as a freelance intellectual, Keynes could marry Lydia Lopokova who had just enchanted London as the star of Diaghilev's ballet. My memory retains from somewhere a couplet: Was there ever such a union of beauty and brains As when the lovely Lopokova married John Maynard Keynes? For a civil servant, even for a Cambridge professor, Lopokova would then have been a bit brave. As it was www.capitalideasonline.com Page - 3 Galbraith on Keynes (according to legend), old family friends in Cambridge asked: has Maynard married a chorus girl? Mostly in those years Keynes wrote. Good writing in economics is suspect-and with justification. It can persuade people. It also requires clear thought. No one can express well what he does not understand. So clear writing is perceived as a threat, something deeply damaging to the numerous scholars who shelter mediocrity of mind behind obscurity of prose. Keynes was a superb writer when he chose to try. This added appreciably to the suspicion with which he was regarded. But while Keynes was kept outside, he could not, as would a Marxist, be ignored. He was a Fellow of King's. He was the Chairman of the National Mutual Insurance Company. He was the director of other companies. So he was heard. It might have been better strategy to have kept him inside and under control.” www.capitalideasonline.com Page - 4.

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