John Maynard Keynes continues to fascinate us. Perhaps, it’s because, during this twilight of neoliberalism and the advent of a Brave New World, the world badly needs someone like him. Zachary Carter’s The Price of Peace is the best study of Keynes that’s appeared in a long while. In fact, it’s the best intellectual biography of anyone that’s come out in the last few years. Of course, it’s no substitute for reading Robert Sidelsky’s massive three-volume bio of Keynes, but it’s more beautifully written, with former Financial Times’ writer Carter having the skilled journalist’s feel for digging out formerly unknown or neglected tidbits that help us in fleshing out what made the man the arresting and interesting public intellectual that he was.
Carter also brings out what was formerly glided over, which was how Keynes’ view of the world—a view that underlay his economics—was shaped by his being part of the Bloomsbury Circle of anti-Victorian cultural and sexual radicals that also produced luminaries like the novelist Virginia Woolf. Not being a poet or artist, Keynes worshiped writers and artists, whom he considered a cut above being a pedestrian economist, and who instilled in him a permanent unease about serving in government, which they disdained. Perhaps, in expiation, he made his Bloomsbury friends financially secure by making money for them with his speculative skills in the stock market. But despite occasional spats, the Bloomsbury cultural radicals considered him one of their own, even after he decided to give up going after men and settled down to a heterosexual life with the famous Russian ballerina Lydia Lopokova.
While Carter does not neglect the bombastic The Consequences of the Peace, Keynes’ denunciation of the Treaty of Versailles of 1919 as setting the stage for another European crisis, and his magnum opus, The General Theory of Employment, Interest, and Money, he calls attention to other texts, such as The End of Laissez Faire, which lay out the paradigm or perspective that lies beneath the strategy of demand management for which Keynes economics is known. Keynes was not a socialist, but he felt that the conditions of scarcity that produced free market economics had given way to an age of relative plenty owing to the increase in capitalism’s productive capacity so that the socialist ideal of more egalitarian distribution of wealth and income had become a practical possibility. Keynesianism was more than the technology of demand management. It was an ethical perspective, one that, while not socialist, sought to reconcile capital accumulation with more egalitarian concerns, something that had not been possible in the era of laissez-faire.
The tension between the concern for stabilizing capitalism and that of addressing questions related to a more egalitarian distribution of wealth was one that marked and roiled Keynesian economics after the passing of Keynes. Carter does a great job detailing the chasm that emerged between left-wing Keynesians like Joan Robinson and more technocratic types like Paul Samuelson, whose textbook "Economics" provided the entryway to Keynesian economics for millions of undergraduates throughout the world. The enmity was not just intellectual but personal, a point that Carter illustrates with his anecdote of Robinson and Samuelson managing to snub each other while eating in the same room in a restaurant during an economics conference. To Carter, Robinson was as brilliant as the master himself, and her not being awarded the Nobel Prize was one of the greatest sins of the male-dominated economics profession. Robinson hit back at the Keynesian technocrats when she accused them of turning “Keynes’ pleasant daydream…into a nightmare of terror” in her keynote address at the American Economics Association in 1971.
Keynes’ technocratic successors had their problems, but, in retrospect, Robinson’s jeremiad might have been better directed at the ex-Keynesian Milton Friedman and his band of neoliberals who came to dominate the field in the 1980s and 1990s and ended up producing the Wall Street crash of 2008-2009, from which the western world has never recovered and which helped produce Donald Trump and other far right figures that today plague the liberal international order that has rested, in great part, on Keynes’ intellectual shoulders.