The Price Of Peace: Money, Democracy, And The Life Of John Maynard Keyes, Carter - B+, Incomplete

            "Keynes was a philosopher of war and peace, the last of the Establishment intellectuals who pursued political theory, economics, and ethics as a unified design." His concerns were not about taxation or government spending, but rather the survival of civilization. His overarching vision of the future was a"vision of human freedom and political salvation."

             In August of 1914, the thirty-one year old Cambridge don hurried to London where the Bank of England had paid out two-thirds of its gold reserves. Everyone wished to hoard gold, but Keynes convinced the government to continue to redeem gold and issue a paper currency. He was appointed to a top position at Treasury. The war "transformed him from an inconspicuous, content academic into one of the most influential figures of his generation." He had a position in Treasury that thrust him into almost every important financial decision of the war. But, on a personal level, his role brought consternation to his Bloomsbury friends, and he became unsettled by the government's increasingly jingoistic sentiments. He was discomfited  by Britain's almost total reliance on the US to finance the war. When Wilson came out with his Fourteen Points, Keynes was one of many supporters. Wilson was perceived in Paris as the person who would save Europe from itself. Keynes went to Paris to represent the Treasury. "German reparations became the central, iconic drama of the peace conference." The British and French wanted blood money. The Americans and Keynes wanted a manageable number that wouldn't push Germany into poverty. America's reasonableness did not extend to forgiving any of its war debt. Overwhelmed by demands for absurd reparations and endless politicking, he resigned from Treasury and returned to England that summer. "The Economic Consequences Of The Peace is a provincial, shortsighted, vicious, and in many respects deeply unfair polemic. It is also a masterpiece and very likely the most influential work Keynes ever put his name to." He brilliantly predicted the ill-fated consequences of the treaty, made a lot of money because it became a run-away bestseller, and annoyed almost everyone in the British government.

             He returned to Cambridge, and began speculating in financial markets. He also met Lydia Lopokova, a Russian ballet dancer. The gay Maynard, one of the country's best known homosexuals, fell for, and eventually married the Russian dancer in 1925. His writings and his ownership of the newspaper 'Nation' meant he was once again accepted in the nation's political circles, even though he had taken on the need for the gold standard. He was asked to join a new committee when the Great Depression descended on the world. He delved into the causes and consequences of the Slump. He published a monstrous book called A Treatise On Money that garnered world wide attention and acclaim. His predilection for government intervention in economies was challenged by an Austrian, Friedrich Hayek, an apostle of laissez faire. Their arguments still resonate today, particularly in America. As he watched the world sink further into depression, he was extremely frustrated by the world's governments trying to solve the problem by raising taxes and attempting to balance budgets. 

            The year 1933 saw someone finally adopt his policies, and it was the United States that would reverse course first. FDR closed the banks, reopened them with a guarantee of their deposits, took the US off the gold standard, and proclaimed that it was the government's responsibility to manage the free market system for the benefit of the people. Cheap credit and public works programs were at the heart of Keynesian theory. At about the same time, he began work on his life's masterpiece. "The General Theory of Employment, Interest and Money is one of the great works of western letters, a masterpiece of social and political thought that belongs with the monuments left by Aristotle, Hobbes, Edmund Burke, and Karl Marx." Its focus is on alleviating inequality and posits that prosperity "must be orchestrated and sustained by political leadership."

           Maynard's health began to fail in the mid-1930's. He credited his recovery to "Hitler's aggression" and went back to work as an unpaid advisor for the UK when WWII broke out. He eventually accrued so much influence and power that he became the functional wartime Chancellor of the Exchequer. In 1944, now Lord Keynes, he headed to America for the Bretton Woods Conference. "At age sixty, with his health failing, Keynes had reached the zenith of his intellectual and political powers. Bretton Woods would be his final grueling test." He was influential in the creation of the IMF and World Bank, but held a losing hand throughout the conference as the representative of a bankrupt nation from a bankrupt continent. It was America's world to rule. He returned to America in early 1946 for the ratification in Savannah of the Bretton Woods decisions and died soon thereafter in London. He was 62. "No European mind since Newton had impressed himself so profoundly on both the political and intellectual development of the world." He lived an astonishing life and dominated political economics throughout his life and for the three-quarters of a century since his death.

       Usually the grade of Incomplete accompanies my inability to complete a book. In this instance, it means I did not finish the last fifth of the book dealing with the consequences of his thoughts which bring the story to this century. It also addresses the fact that I had to skip through innumerable pages of deep dives into the dismal science, which I acknowledge is both beyond me and something I find very boring. Eight years ago, when there was a flurry of writing about WWI, I stumbled upon two of the most brilliant minds of the 20th century: George Kennan and John Maynard Keynes. I would heartily recommend anything Kennan wrote, and in terms of Keynes, "The Economic Consequences Of The Peace" is one of the 33 A's on this blog of 967 books. It's magnificent. Thanks again to Greg Weiss for recommendations that challenge me.