John Maynard Keynes (1883–1946)
Who They Were
John Maynard Keynes (1883-1946) was a British economist who spent most of his academic career at Cambridge. He first drew wide attention with The Economic Consequences of the Peace (1919), which argued that the reparations imposed on Germany at Versailles were economically ruinous and would destabilise Europe. Over the following decades he moved from monetary questions, treated in A Tract on Monetary Reform (1923), to a fundamental rethinking of how whole economies behave. His masterwork, The General Theory of Employment, Interest and Money (1936), challenged the classical assumption that supply creates its own demand. During the Second World War he led the British delegation to the 1944 Bretton Woods conference, which designed the postwar international monetary system. He remains one of the most influential economists of the twentieth century.
Key Contributions
Keynes set out to overturn the classical proposition, named for Jean-Baptiste Say, that supply creates its own demand. He argued that economies can settle at a persistent underemployment equilibrium and that governments should manage aggregate demand rather than wait for markets to clear on their own, a stance he summed up in the line that in the long run we are all dead, urging economists to address the short run. He used the term animal spirits for the spontaneous optimism that drives business investment beyond what cold calculation can justify, and highlighted the paradox of thrift, in which attempts to save more can reduce total saving by lowering incomes. His demand-management framework underpinned mid-century fiscal policy and the Bretton Woods institutions, and it remains one of the poles, set against classical and later monetarist thought, around which modern macroeconomics is organised.
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British economist whose 1936 General Theory reshaped macroeconomics, arguing governments should manage demand rather than wait for markets to self-correct. Play the games that feature John Maynard Keynes: