“Much as I admire the Americans, when laissez-faire takes the form of agreeing to do whatever the Americans do, I am a little terrified.” Thus John Maynard Keynes, savior of capitalism.
It’s no small irony that it has taken a second depression to bring Keynesian ideas of government-induced economic stimulus back into fashion, since the first depression was supposed to have provided sufficient reasons for keeping an eye on the economy to ensure that such intervention was not needed again. Cambridge historian Clarke (The Last Thousand Days of the British Empire: Churchill, Roosevelt, and the Birth of the Pax Americana, 2008, etc.) paints a careful portrait of the prophet whose voice was once heard only in the wilderness of social democracy. Ironically, Keynes was only passingly sympathetic to socialism, and his advice to Franklin Roosevelt, who called on the British economist to help think through New Deal–era economic policy, was that the president conduct a “reasoned experiment within the framework of the existing social system” so that capitalism might be kept alive. Clarke writes a touch tunelessly at odd moments (“Keynes served as a temporary wartime civil servant and took to the administrative life like a duck to water”), but his brief but detailed biography makes for, well, stimulating reading in a time when Keynes’s notions of stimulus have proved once again to be an economic lifesaver. The author also notes that Keynes did not view government-injected stimulus funds as ideal policy, but that such actions were better in crisis than sitting around and waiting for the free market to straighten itself out, as capitalist orthodoxy holds that it will do. There are lessons aplenty to be drawn from Clarke’s recitation of the facts of Keynes’s life and thought—not least the lunacy of cutting government spending in tough times.
A useful, timely primer.