John Maynard Keynes

Who was John Maynard Keynes?

John Maynard Keynes, 1st Baron Keynes, CB, FBA was a British economist whose ideas have fundamentally affected the theory and practice of modern macroeconomics, and informed the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the founders of modern macroeconomics and the most influential economist of the 20th century. His ideas are the basis for the school of thought known as Keynesian economics, and its various offshoots.

In the 1930s, Keynes spearheaded a revolution in economic thinking, overturning the older ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. Keynes instead argued that aggregate demand determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment. According to Keynesian economics, state intervention was necessary to moderate "boom and bust" cycles of economic activity. He advocated the use of fiscal and monetary measures to mitigate the adverse effects of economic recessions and depressions. Following the outbreak of World War II, Keynes's ideas concerning economic policy were adopted by leading Western economies. In 1942, Keynes was awarded a hereditary peerage as Baron Keynes of Tilton in the County of Sussex. Keynes died in 1946, but during the 1950s and 1960s the success of Keynesian economics resulted in almost all capitalist governments adopting its policy recommendations.

Famous Quotes:

• In the long run we are all dead.
• The best way to destroy the capitalist system is to debauch the currency. By a continuing process of inflation governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
• But this long run is a misleading guide to current affairs. In the long run we are all dead.
• A study of the history of opinion is a necessary preliminary to the emancipation of the mind.
• Words ought to be a little wild for they are the assaults of thought on the unthinking.
• The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods.
• The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems -- the problems of life and of human relations, of creation and behavior and religion.
• If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.
• The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.
• Americans are apt to be unduly interested in discovering what average opinion believes average opinion to be...