John Keynes was a British economist and monetary expert whose ideas have been a central influence on modern macroeconomics. His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.
Keynes spearheaded a revolution in economic thinking, overturning the older ideas of neoclassical economics that held that free markets to correct itself and would automatically provide full employment.
His book “The General Theory of Employment, Interest and Money” (1936), which criticized this orthodox view, revolutionized economic theory and became the origin of Keynesianism.
Coming at a time when many nations had been racked by depressed economies, the book offered a sharp critique of laissez-faire economic policies and argued that central government needed to step in, particularly during periods of chronic unemployment.
He advocated interventionist government policy, by which governments would use fiscal and monetary measures to mitigate the adverse effects of business cycles, economic recessions, and depressions.
He advised to the British and American governments to realize a massive public works program to emerge from the depths of the Depression, and he endorsed deficit spending as a response to recessions.
Although Keynes favored controlled investment and an active public sector, he never wavered in his faith in the capitalist market economy. Thus, in Keynesian theory, government action is designed to stimulate the market, not to eliminate it.
Notable ideas: Macroeconomics, Keynesian economics, Liquidity preference, Spending multiplier, AD–AS model, Deficit spending.
After an education at Eton King’s College and Cambridge University, (BA in Mathematics 1905), he worked in the India Office in 1906–1908, and then returned to teach economics at Cambridge.
After 1919, he also had an succsessful career in the world of finance as a company director, insurance company chairman and a director of the Bank of England (1941–6). and bursar of King’s College, Cambridge.
At Cambridge, Keynes took an active part in the scientific society activity, whose members were the philosophers George Moore, Bertrand Russell and writer Virginia Woolf.
In the years following 1936, Keynes spent most of his time in public service, producing several articles on the subject of war financing. During World War II he was a consultant to the chancellor of the exchequer and a director of the Bank of England. He was raised to the peerage in 1942.
During his studies at school teachers described Keynes as brilliant, but on occasion, careless and lacking in determination.
In 1925 he married to Lydia Lopokova, a well-known Russian ballerina. They had no children.
Under the influence of his friends and wife Lydia Lopokova (ballerina dancer of the Diaghilev Ballet, (1892- 1981), he played an active and important role in the cultural life. Keynes was also a patron of the arts, an advisor to several charitable trusts, a writer, a private investor, an art collector, and even a farmer.
Keynes died of a heart attack at Tilton, on 21 April 1946, at the age of 62 years old.
Remains: Cremated, (ashes scattered on the Downs above Tilton).