John Maynard Keynes was, at first glance, an unlikely candidate to become a great icons of Left-wing politics.
Born in 1883 to a Cambridge economist and social reformer, he was brought up in an atmosphere of privilege and attended Eton and Cambridge – where he got top marks and gained academic distinction.
Keynes was bisexual and known for being very sexually promiscuous in his younger years before eventually marrying Russian ballerina Lydia Lopokova in 1925.
The same year Keynes was building a reputation as the most brilliant and controversial economist in the western world.
March 1940, John Maynard Keynes, English economist and pioneer of the theory of full employment
After advising the Government during World War I, he seized attention in 1919 with an attack on the Treaty of Versailles, arguing that its punitive terms were bound to provoke a terrible German reaction.
And during the Twenties he cemented his image with a series of onslaughts on economic orthodoxy, chipping away at the three pillars of the old order – the Treaty, the gold standard (the system whereby bank notes were literally exchangeable for gold) and laissez-faire government, the economic ideology which advocates minimal state intervention.
But one of the great myths about Keynes is that when the Wall Street Crash sent shockwaves through the world economy in 1929, politicians seized on his ideas as a solution to the Depression. They did nothing of the sort, for although Keynes’ brains were highly regarded, he remained a heretic.
His trademark notions – government borrowing and spending on public works to boost demand and alleviate recession – were unpopular on both sides of the political divide.
Although Ramsay MacDonald’s Labour government brought him on board in 1930, it did not take up his prescriptions.
In fact, it was only at the margins of British politics than Keynesianism, as it eventually became called, really caught on.
March 1940, English economist John Maynard Keynes (1883-1946) in his study at Bloomsbury, London. The ‘unofficial economic adviser to Great Britain’
March 1940, English economist John Maynard Keynes (1883-1946) in his study at Bloomsbury, London. he ‘unofficial economic adviser to Great Britain’
During the Twenties, he had met a dashing young Labour politician, Sir Oswald Mosley, and it was he who made the most determined effort to introduce Keynes’ ideas into British economic life.
As early as 1925, Mosley was arguing for nationalised banks, an economic council and centralised planning for full employment.
And in 1930, Mosley, who was then a minister without portfolio outside the Cabinet, presented his famous Memorandum to the Labour Cabinet, recommending £200 million of public works and social spending to kick- start the economy into recovery.
This was Keynesianism pure and simple – and the Cabinet rejected it. To most Labour ministers, borrowing money to throw at public works during tough times smacked of profligate irresponsibility.
Mosley promptly flounced out of the Government and ended up founding the British Union of Fascists, horrifying his old friends and colleagues.
He remained an admirer of Keynes’s ideas, though – as did his great friend and mentor, Adolf Hitler.
Indeed, if there was one government that did embrace Keynesianism enthusiastically in the Thirties, it was Hitler’s Germany – where borrowing, spending and public works were the foundations of the Nazis’ economic appeal in a country ravaged by the Depression.