John Maynard Keynes

John Maynard Keynes
1883 - 1946
Keynes is famous for economic policies that changed the way Western governments manage their economies.

Keynes was a British economist who was raised in a stable, middle class home in England. He advocated government intervention in the economy during a recession. His policies were implemented during the Great Depression and became popular at the end of World War II. They remained in effect in Europe and North America until the 1970s. His ideas ran counter to those of classical liberalism and its central economic premise that if the market operates with complete freedom, everyone will prosper.

Main Ideas

Keynes believed that there was a strong link between income and consumption.  People do not spend what they do not have, and they do not spend when they feel nervous or pessimistic about the economy.  If they feel confident, they will spend, increasing effective demand and, therefore, total production and employment. This applies also to investors, who will not put their money into new ventures if they think there will be risk.  Governments can stimulate the economy by increasing the purchase of goods and services, expressing confidence in the economy.

When economic times are tough, Keynes recommended that government

  •     increase spending on public works such as roads and bridges
  •     reduce taxes so people have more money to spend
  •     borrow money to operate

When economic times are good, Keynes recommended that government

  •     decrease spending on public works such as roads and bridges
  •     increase taxes so the economy does not become overheated
  •     save money for times of economic difficulty

Famous Works

    The General Theory of Employment, Interest, and Money

Interesting Trivia

Keynes married a famous Russian ballerina and spent much of his life trying to prolong her career to help compensate for the lack of children.

He was named one of the world's 100 most influential people by Time Magazine in 2009.

Last modified: Monday, 9 March 2020, 7:42 PM