Overrated: John Maynard Keynes
John Maynard Keynes: Held in awe by the wartime generation (illustration by Michael Daley)
For the wartime generation, Keynes seemed nothing less than the saviour of mankind. He was the knight errant who returned from Washington in 1945, having negotiated the terms of the American loan that kept Britain afloat. He was the wizard who created the monetary system that restored stability to the post-war global economy. It was his General Theory of Employment, Interest and Money that heralded "the end of boom and bust" (as his disciple Gordon Brown would later put it). For decades after he died prematurely, exhausted by the task of saving the world, the great man was held in awe by his contemporaries. "Maynard was the cleverest man I have ever met," recalled his Bloomsbury friend Clive Bell. Even the less easily impressed Isaiah Berlin found him "intellectually awe-inspiring".
Keynes has never ceased to be a name to conjure with, but his reputation was eclipsed, at least in the Anglosphere, during the Reagan-Thatcher era. Even at his nadir, however, his biographers were busy burnishing his credentials, above all the three-volume monument by Robert Skidelsky. Now Richard Davenport-Hines has produced a superb biography for the general reader: Universal Man: The Seven Lives of John Maynard Keynes (William Collins, £18.99).
Davenport-Hines does not treat Keynes primarily as a thinker, but, as his title suggests, concentrates on Keynes the private and public man. For him, Keynes was indeed "an inspiring example of an intellectual who was bold in his ideas and unselfish in the ways that he put them into action". Even without Davenport-Hines's brilliant advocacy, it is enough to read Keynes to appreciate his genius and admire his generosity.
But it is precisely because Keynes the man has been constantly invoked as "beyond emulation" that Keynes the economist was and still is overrated. The theories that came to be known as "Keynesian" were inconsistent, ephemeral or plain wrong. Whether Keynes was in fact a Keynesian was unclear in his lifetime and is still moot. What is not in dispute is the extent of his influence, which has been colossal and mostly disastrous.In 1940, for instance, he wrote that the Nazi "New Order" was "excellent and just what we ourselves ought to be thinking of doing." While he claimed to believe in balanced budgets during "normal" times, his grandiose conception of macroeconomic management has provided a fig-leaf for big government ever since.
The economic crisis that broke in 2008 has predictably brought about a Keynesian renaissance, though he would surely have repudiated the demagogues who now take his name in vain. Keynes looms so large today because ideas long outlast the circumstances of their inception. After Churchill disregarded his advice and returned to the gold standard, Keynes wrote a devastating polemic, The Economic Consequences of Mr Churchill. Yet Churchill's mistake was at worst a short-sighted policy that was unsustainable in the long term. Politicians rarely look beyond the electoral horizon; Keynes himself observed that in the long run we are all dead. But the economic consequences of Lord Keynes are still with us.