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Keynes and the Manchester Guardian's Reconstruction

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Keynes and the Manchester Guardian's Reconstruction Annals of the Fondazione Luigi Einaudi Volume LI, December 2017: 9-24 KEYNES AND THE MANCHESTER GUARDIAN’S RECONSTRUCTION SUPPLEMENTS Peter Clarke * ABSTRACT This introduction explains why and how Keynes became associated with the project for publishing Reconstruction Supplements that would circulate throughout Europe in 1922-3. The idea came from C.P. Scott, the long-serving editor and pro- prietor of the Manchester Guardian, Britain’s most prestigious liberal newspaper. Keynes agreed to edit the proposed series, to recruit contributors from across Eu- rope, and to write a number of essays himself. This was a new kind of journalistic challenge for him, but it brought both prestige and considerable financial rewards. The proposal was intimately linked with the commission for Keynes to attend the international Genoa Conference in the spring of 1922 as a special correspondent, contributing a series of articles that were widely syndicated. All this came at a criti- cal moment in his personal life, at the beginning of his relationship with the Russian ballerina Lydia Lopokova, who was to become his wife. Her impact on the project should not be underestimated, encouraging Keynes to write in a more accessible way than previously. The results were seen not only in the publication of the Supplements themselves but also in the subsequent book that Keynes published, A Tract on Mon- etary Reform, which owes much to the Supplements both in style and in substance. Keywords: Keynes, Manchester Guardian, Genoa Conference, Lydia Lopokova, Treatise on Money. JEL codes: B31. Introduction The devastating effects upon Europe of the First World War can hard- ly be exaggerated. We think first of the death toll among the millions of young men who fought each other, not only on the western front in France * University of Cambridge. Address for correspondence: [email protected]. ISSN: 2532-4969 doi: 10.26331/1013 10 PETER CLARKE but on the less well-commemorated eastern front or that between Italy and the Habsburg Empire. A vast number of others – men, women and children alike – perished through violence, famine and disease. Great em- pires collapsed: the Romanovs first but then inexorably the Habsburgs, the Hohenzollerns and the Ottomans. The two leading European Allies, Britain and France, eventually claimed victory; true, the peace treaties ag- grandised them territorially, especially in the Middle East – with long-term results that we are still confronting today. But the only real winner was the United States, especially in establish- ing its economic supremacy in a way that challenged all Europeans, though initially it fell to the victors among them to remake the world after this ‘war to end war’. The fact that the United States, having acted as the supreme arbiter at the peace conference in Paris in 1919, then refused to ratify the resulting treaties was a body-blow to liberal hopes. The League of Nations had been the brainchild of President Wilson and was set up as an organisa- tion premised on American leadership, yet it subsequently became a forum from which the United States excluded itself. John Maynard Keynes made his name in writing about the economic consequences of these successive events. Until 1914, when he turned thirty- one, he had been virtually unknown outside the University of Cambridge. He was then a young economist, but one with unusually wide interests, not only methodologically through his philosophical work on probability, but also in his political, social and cultural commitments. It was the war that brought him into a key role in the British Treasury, first on anad hoc basis in advising the Government to maintain specie payment, signalling a continued commitment, despite the war, to the international gold stan- dard. Keynes was subsequently recruited as a Treasury official and thus -be came largely responsible for the external finance of the British war effort. This was still nominally conducted under the gold standard, by means of huge dollar loans, some of which were in reality on behalf of Britain’s allies (France, Italy, Russia, Belgium, Serbia etcetera) since their own credit rating failed to satisfy the Americans. In this way Keynes acquired a unique perspective on the issue of war debts, not least because of his own (unacknowledged) responsibility for running them up on such a large scale. Equally obvious is the link with reparations, as demanded from Germany by the victors in Paris much to Keynes’s disapproval. Here, then, lay the reasons for this young Brit- ish Treasury official to resign his important government post in the early summer of 1919 and devote his time to the composition of his book The Economic Consequences of the Peace, published at the end of the year. This was no mere economic analysis by a technical expert. It was a po- lemical work of great artistry and eloquence that took the world by storm. KEYNES AND THE MANCHESTER GUARDIAN’S RECONSTRUCTION SUPPLEMENTS 11 Keynes’s close friend, Lytton Strachey, the author of the recent bestseller Eminent Victorians (1918), could hardly have bettered the literary effect of the some of the early chapters of the Economic Consequences, with their fe- line portraits of Lloyd George and Wilson, both of them professed liber- als in whom Keynes was now bitterly disappointed. Accordingly, in both Britain and the United States the book found ready admirers, especially but not exclusively on the left; in France, conversely, it faced scorn, not least because it was widely perceived as pro-German; and in Germany, it is true, Keynes’s arguments were soon put to work in justifying the ‘innocence campaign’ against German liability for reparations, as demanded under the Treaty of Versailles. Keynes was henceforth a central figure in these inter- national debates (Clarke 2017: 255-318). Keynes’s career as an academic economist in Cambridge, already inter- rupted by his wartime service as a Treasury official, was now eclipsed by his fame as a polemicist, with prestigious newspapers anxious to seek con- tributions from him and to print articles that were syndicated throughout the world. Only in such a context can we understand the origins, the nature and the impact of the famous Supplements that the Manchester Guardian commissioned under Keynes’s editorship, with the general title Reconstruc- tion in Europe. It was on 12 October 1921 that the editor of the paper, Charles Prestwich Scott, met Keynes face to face. Scott, at seventy-five, was now a living leg- end, still sitting in the editor’s chair that he had occupied in Manchester for half a century and notorious for having the ear of the Prime Minister, Da- vid Lloyd George. (Scott’s self-appointed role was to act as Lloyd George’s liberal conscience when he strayed from the paths of righteousness.) Scott was also ready to travel to London to meet Keynes, a man half his own age, in order to sell the idea of a series of special supplements. These were to be supervised by Keynes and to be printed not only in Manchester but with translation for French, German, Spanish and Italian editions. This proposal clearly proved attractive, in more senses than one. “I like the idea and and I think I might be able to make a good job of it”, Keynes responded after thinking it over for a week, while making it clear that, if he agreed, it would not be a nominal commitment: “In fact, I am not prepared for my name to appear in a way that implies responsibility unless I can really exercise pretty detailed supervision over the writers” (CW 17: 320). The proposal held two big attractions and faced two major distractions. The money on offer was obviously attractive, as Keynes immediately made clear to Scott. “The question of the disposal of the American Rights in the articles is important, for I think they could be disposed of for a very substan- tial sum, which would have the effect of greatly reducing the the burden on you of payment to the authors.” He went into some detail about this 12 PETER CLARKE before committing himself. “I suggest that remuneration to myself should be at the rate of £200 issue, with additional payments for any articles which I should contribute myself ” [CW 17: 321]. Thus, for each number as editor, he demanded a sum that would be worth about £8000 today; and, together with payments for his dozen signed articles, as eventually published, his to- tal remuneration was about four thousand pounds (say, £160,000 in today’s money). In the 1920s the annual salary of a Cambridge professor – A.C. Pigou, for example, who now held Alfred Marshall’s former chair in eco- nomics – was around one thousand pounds a year; and Keynes was in every way junior to Pigou in the academic hierarchy. But by this time Keynes was not just an academic economist but an internationally renowned liberal publicist whom Scott very much wanted to recruit. The terms of his con- tract were not the problem. There was another obvious attraction for Keynes. For in his eyes the Manchester Guardian was not just any old newspaper. The fact that it was published in Manchester rather than in London announced its status, speak- ing for the commercial and industrial interests of Britain, as it had since the days of the ‘Manchester School’ with its laissez-faire ethos in the nine- teenth century. Until the First World War, Lancashire was still the home of a thriving cotton industry that accounted for over a quarter of Britain’s visible exports. A commitment to free trade was shared by both the Liberal party and the infant Labour party; Scott had long seen it as his mission to preach the need for a progressive alliance between them, with a common commitment to social reform.
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