The Price of Peace

I finished reading The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes recently.

On the surface, The Price of Peace is a biography of John Maynard Keynes, the economist who is, at this point at least for me, synonymous with Obama’s attempt at stimulating the economy after the 2008 financial crisis. But the scope of the book is massive. This is partly because Keynes, from quite a young age, was directly involved in a lot of major 20th century events while he was alive. And partly because the latter third of the book careens through US economic and political history after Keynes died in the late 1940s through to the present day. Keynes’s policies were utilized by all US. Presidents from FDR to Obama, with the notable exception of Clinton, whether they were used in ways that he would have approved of or not (reader, he would most definitely not have enjoyed watching Nixon stimulate the economy through Cold War armament and deployment of troops to Southeast Asia.)

Keynes attended Eton and Cambridge although had a relatively unconventional education and social life. He studied math at Cambridge and dabbled in philosophy. He didn’t really have a formal economics training apart from attending the occasional lecture at King’s College. He was a part of the Bloomsbury Group which included Virginia Woolf. Almost all of his close friends were artists. His early romantic relationships were mostly with men until he met and married the Russian Ballerina, Lydia Lopokova in his late 30’s.

Keynes economic and political legacy comes across as almost tragic. Which seems absurd given how influential he was in his day and how popular he was. He almost single-handedly elevated the profession of economics and paved the way for economists to influence domestic and international policy in the UK and US.

This is first off because in the aftermath of both World War I and World War II, his recommendations were famously ignored to disastrous effects (although some disagree on this point). And secondly, where Keynes ideas did get enacted, like in the form of FDR’s New Deal, they were viewed as such a threat on the right that they ignited a groundswell of opposition that started in the FDR years and which has only grown stronger and more powerful in our current age. In other words, the book seems to make the case that what we’re experiencing in the early 21st century, is not so much the influence of Keynes but the impact of the rejection of Keynes. In the wake of World War II and the end of the FDR presidency, US aristocrat became disillusion with Keynes and FDR as they viewed their policies as giving too much power to government. The abandonment of individualism that was articulated by Hayek in “The Road to Serfdom”. The story of the decades following this is the rise of conservatism and the dismantling of New Deal style government interventional programs.

Keynes ideas were rooted in using economic management to protect democracies from authoritarians and alleviate inequality to establish an environment where great art could be made and “the good life” were available to everyone. The book left me frustrated that Keynes’s ideas have not found political leaders who were able or wiling to implement them at a time when they seem more relevant and necessary than ever.