John Maynard Keynes

John Maynard Keynes was a British economist and arguably one of the most influential of the 20th century.

John Maynard Keynes was born on the 5th of June 1883 in Cambridge. His father was an economist and a philosopher and his mother became the town's first female mayor. He attended two prestigious schools: Eton, and the University of Cambridge, where he studied mathematics.

Keynes went on to simultaneously work as a civil servant in the India Office and work on a dissertation, which earned him a fellowship at King's College. In 1908, he quit the civil service and returned to Cambridge. Following the outbreak of World War One, Keynes joined the treasury, and in the wake of the Versailles peace treaty, he published 'The Economic Consequences of the Peace' in which he criticized the exorbitant war reparations demanded from a defeated Germany and prophetically predicted that it would foster a desire for revenge among Germans. He resigned because he thought the Treaty of Versailles was overly burdensome for the Germans. This best-selling book made him world famous.

Keynes' best-known work, 'The General Theory of Employment, Interest and Money', was published in 1936, and became a benchmark for future economic thought. Keynes was so influential that an entire school of modern thought bears his name. Many of his ideas were revolutionary; almost all were controversial but his General Theory revolutionized the way economists think about economics. It introduced the notion of aggregate demand as the sum of consumption, investment, and government spending; and because it showed that full employment could only be maintained with some government spending. It also secured his position as Britain's most influential economist, and with the advent of World War Two, he again worked for the treasury. In 1942, he was made a member of the house of lords.

Keynes is also known for his ideologies during the 1930s. After the 1929 stock market crash and the resulting Great Depression, Keynes became more radical. He came to believe that complete free-market capitalism was inherently untenable and that it needed to be reformulated. As a result, he began advocating for government intervention as a way to curb unemployment and resulting recessions. He argued that a government jobs program, increased government spending, and an increase in the budget deficit would decrease high unemployment rates.

President Franklin Roosevelt's New Deal during the 1930s directly reflects many principles of Keynesian economics. With the New Deal, the U.S. government intervened and tried to stimulate the national economy on an unprecedented scale. Following the 1937 recession, Roosevelt explicitly adopted Keynes' notion of expanded deficit spending to stimulate aggregate demand. In 1938 the Treasury Department designed programs for public housing, slum clearance, railroad construction, and other massive public works. Finally, though, it was World War II-related export demands and expanded government spending that led the economy back to full employment capacity production by 1941.

During the war years, Keynes played a decisive role in the negotiations that were to shape the post-war international economic order. In 1944, he led the British delegation to the Bretton Woods conference in the United States. At the conference he played a significant part in the planning of the World Bank and the International Monetary Fund. He died on 21 April 1946.

By Donte