Richard Davenport-Hines - Universal Man: The Lives of John Maynard Keynes

UNIVERSAL MAN

Copyright 2015 by Richard Davenport-Hines

Published by Basic Books,

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A catalog record for this book is available from the Library of Congress

Library of Congress Control Number: 2015934354

ISBN: 978-0-465-06066-5 (e-book)

First published in Great Britain by William Collins in 2015

10 9 8 7 6 5 4 3 2 1

For Selina Hastings and Jonno Keates and again to the gentle memory of Cosmo Davenport-Hines

Contents

Good work is not done by humble men. It is one of the first duties of a professor, for example, in any subject, to exaggerate a little both the importance of his subject and his own importance in it. A man who is always asking Is what I do worthwhile? and Am I the right person to do it? will always be ineffective himself and a discouragement to others. He must shut his eyes a little, and think a little more of his subject and himself than they deserve.

G. H. Hardy

It is, I think, of the essential nature of economic exposition that it gives, not a complete statement, which, even if it were possible, would be prolix and complicated to the point of obscurity but a sample statement, so to speak, out of all the things which could be said, intended to suggest to the reader the whole bundle of associated ideas, so that, if he catches the bundle, he will not in the least be confused by the technical incompleteness of the mere words which the author has written down This means, on the one hand, that an economic writer requires from his reader much goodwill and intelligence and a large measure of co-operation; and, on the other hand, that there are a thousand futile, yet verbally legitimate, objections which an objector can raise. In economics you cannot convict your opponent of error you can only convince him of it.

Maynard Keynes

What do we do? What is the remedy? It would be most inappropriate for me to stand up here and tell you what Keynes would have thought. Goodness knows he would have thought of something much cleverer than I can think of.

Roy Harrod

SEVEN SNAPSHOTS OF A UNIVERSAL MAN:

An intellectual in his twenties in college rooms in Cambridge, hunched forward listening, lolling back in reflection, then standing on a hearth-rug speaking, eager, testing, provoking, always in passionate, lucid paragraphs, to the secretive discussion group called the Apostles, offering new intellectual or ethical systems, and later acting on his belief in the virtues of immorality, having energetic bouts of illegal, risky sex with men from all classes whom he picked up in museums, saunas, railway stations and streets.

A man of thirty-one perched in the side-car of a motorbike driven by his brother-in-law hurtling at top speed on the dusty hot roads from Cambridge to London on 3 August 1914. The young man is a Cambridge economist, and has been summoned to the Treasury to help with the crisis caused by the looming European war. This heretical outsider single-handedly dissuades the Chancellor of the Exchequer, Lloyd George, and the Treasury mandarins from taking a fatal step that the banks had convinced them was essential: the suspension of the Bank Charter Act. His advice is decisive in averting monetary panic and financial collapse in the first week of the war.

Less than four years later, during a critical phase of the world war, the Treasury official responsible for the governments external finances persuading the hard-bitten and visually insensitive Chancellor of the Exchequer, Bonar Law, whose home is notorious for its drabness, to allot 20,000 of government money to buy paintings for the National Gallery at the auction of the contents of Degas studio; attending the auction in Paris, as the booms of advancing German artillery rattle the confidence of buyers; buying for himself works by Czanne, Ingres, Delacroix and Degas; carrying the Czanne back to England in his suitcase, and secreting it in the ditch of a Sussex farm-track, because it is too heavy for him to carry to the friends house which he is visiting.

A man in his forties, a member of the Bloomsbury group, art collector, bibliophile, magazine proprietor, balletomane and husband of a dancer in Diaghilevs Ballets Russes named Lydia Lopokova, stumping round England on behalf of Liberal candidates during general elections, explaining taxation to Blackburn cotton operatives, slumps to Barrow shipyard workers, Russian loans to the shopkeepers of Cambridge, mobbed by railwaymen at Blackpool; becoming an international opinion-former as his articles in the Manchester Guardian are syndicated to newspapers in New York, Berlin, Paris, Milan, Vienna, Amsterdam and Stockholm.

As the Slump hits Britain, and the Great Depression looms over the United States, a Cambridge don leading an informal seminar, lasting several days, for members of a government committee on Finance and Industry, bewitching bankers, manufacturers, officials, trade unionists with piercing new insights (such as the difference between investment and saving) and radical proposals (public-works expenditure by the government to break the vicious cycle of underinvestment, cheap money through low interest rates, tariff barriers to protect home markets, and closing inefficient or surplus factories). You are a complete dramatist, the committee chairman Lord Macmillan told him in admiration. His scrupulous, exact and judicious speeches captivate the committee into issuing

A man in his fifties who knows the creativity of inconsistency, and defines someone of perfect consistency as the man who has his umbrella up whether it rains or not, revises his ideas, and publishes his General Theory of Employment, Interest and Money in 1936. This founding text (if not the absolutely original creator) of macroeconomics becomes the most important economics book of the twentieth century. It proves as important as Adam Smiths Wealth of Nations in inaugurating an economic era. We were pedestrian, perhaps a little complacent, said A. C. Pigou, a senior Cambridge economist who often resisted his ideas. General Theory broke resoundingly that dogmatic slumber. Whether in agreement or in disagreement with him discussion and controversy sprang up and spread over the world. Economics and economists came alive. The period of tranquillity was ended. A period of creative thought was born.