Philosophy of John Maynard Keynes

British Influential Economist, Famous for Keynesian Economics

Mar 4, 2009 Tel Asiado

Economic principles of John M. Keynes, best-known for The Economic Consequences of Peace and General Theory of Employment, Interest and Money.

John Maynard Keynes (1883-1946), was a British economist and philosopher, regarded as one of the fathers of modern theoretical macroeconomics. He was an influential economist of the 20th century and founded a school of thought known as "Keynesian economics."

John Keynes Biography in a Nutshell

John Maynard Keynes was born on June 5, 1883, in Cambridge. He came from a family of intellectuals. His father was John Neville Keynes, an economics lecturer at Cambridge University, and mother, Florence Ada Brown, a successful author and a social reformer. His younger brother Geoffrey Keynes was a surgeon. His younger sister Margaret married a Nobel Prize laureate, physiologist Archibald Hill.

John Keynes Principles

In his General Theory which he wrote during the 1930s depression years, John Keynes optimistically argues that downturns in the economy are short-lived problems that stems from a lack of demand. His solution to these problems was simple but radical: that the government should boost short-term demand through public spending. Further, he claimed that once the economy returns to buoyancy the government reclaims its budget deficit by increasing taxes and reducing public spending.

In other words, the government spending should be inversely proportional to private trade. When the economy slumps public spending should go up, and when trade is booming, the government should spend little. What was radical about his proposal was the general principle that the government should intervene in the economy if only to control demand. His idea is known as "demand management policy."

Keynes Philosophy Versus a Classical View

Keynes showed how government intervention could lead to a stable free market economy. Critics deplored his principle of government intervention in the trade cycle. It encouraged the anti-liberal idea that social problems should be solved by government.

Liberal thinking or classical view inculcates that the government should not intervene in order for the economy to function best, that it should look to academics to show them how to solve such problems. The opposing side sees the supporters of the classical "laissez-faire" economics, Adam Smith and John Stuart Mill.

Economics Beyond Keynes's Principles

In subsequent years in the United Kingdom, during the 1970s, the theories of Keynes were allowed, with controversies. Critics were quick to point out that economic powers like Japan and Germany, both refrained from adopting Keynesian economic policies during the post-war.

Prior his pursuit of economics, Keynes trained as a mathematician and initially influenced by the works of Bertrand Russell and Alfred North Whitehead. Economics has moved on, but Keynes school of thought remains the yardstick in which other principles or theories are measure.

Major Books by John Keynes

• The Economics Consequences of Peace, 1919
• General Theory of Employment, Interest and Money, 1936

Sources:

• McGovern, Una, Editor. Biographical Dictionary. Edinburgh: Chambers Harrap Publishers, 2002.
• Stokes, Philip. Philosophy, the Great Thinkers. Capella, 2007.

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John Maynard Keynes, Economist and Philosopher