1st Baron Keynes
1883-1946
UK economist
1. Introduction
Keynes (rhymes with ‘rains’) was known to family and friends by his middle name Maynard and wrote as ‘J.M. Keynes’. He is best known for his economic theories. He was primarily an academic and a government advisor, representing the UK in international negotiations on economic matters. He was a severe critic of some of Churchill’s decisions when Churchill was chancellor of the exchequer in the 1920s. Keynes was a patron of the arts and had many other interests. He suffered from ill health for much of his life and died of a heart condition at his country home in Sussex, aged 62.
2. Stories
- Although mainly known as an economist, Keynes was highly capable in various fields.
- Despite being a renowned economist, Keynes had no formal education in economics.
- Keynes’s main criticism of Churchill was in relation to the gold standard, published as an essay entitled ‘The Economic Consequences of Mr. Churchill’ in 1925.
- As a Conservative, Churchill generally opposed Keynes’s interventionist economics, but the two found a friendly personal equilibrium.
- Keynes was part of the ‘Bloomsbury Set’, a group of talented and socially liberal individuals.
- Keynes first saw his future wife, ballerina Lydia, on stage in 1921 and became enthralled.
- Keynes once hid a Cézanne painting in a hedge in Sussex because he was too tired to carry it.
Although mainly known as an economist, Keynes was highly capable in various fields.
Historian and biographer Richard Davenport-Hines describes Keynes as a ‘universal man’1 with seven lives: altruist, boy prodigy, official, public man, lover, connoisseur and envoy. Leonard Woolf, author and husband of writer Virginia Woolf, described him as ‘a don, a civil servant, a speculator, a businessman, a journalist, a writer, a farmer, a picture-dealer, a statesman, a theatrical manager, a book collector, and half a dozen other things.’2
His father was a lecturer at Cambridge University and his mother became Cambridge town mayor. After a scholarship at Eton, Keynes studied mathematics at King’s College, becoming one of the elite ‘Apostles’, an intellectual society, and president of the Cambridge Union Society, a debating organisation. He became an economics lecturer and a fellow and bursar at King’s College. In 1936, he founded the Cambridge Arts Theatre which he gave to the university and town.3
His work for the UK government began in the India Office after he passed his civil service exams. His growing reputation as an economist and his persuasiveness contributed to changes in the policies of David Lloyd George when the latter was chancellor of the exchequer. He became an advisor to the Treasury, which he discontinued in protest at the punitiveness of the Treaty of Versailles. He continued to influence government policy with his writings and led the British delegation during international discussions at Bretton Woods, New Hampshire, that led to the foundation of the International Monetary Fund and a precursor to the World Bank. He also negotiated terms for US financing of British post-war reconstruction.
He was a speculator in foreign exchange and commodities, making major gains and losses, but ending with a net worth of £480,000 (equivalent to £20.6 million today). His wealth financed his art collection and patronage of the arts.
His early relationships were all with men, including ‘Dilly’ Knox, a codebreaker during World Wars I and II. In 1925, he married Lydia Lopokova, a Russian ballerina, with whom he had a close relationship. They had no children (Lydia had a miscarriage in 1926), about which Keynes was rather wistful. As an ennobled baron, he sometimes described himself as ‘barren Keynes’.
Despite being a renowned economist, Keynes had no formal education in economics.
His sole training in the ‘dismal science’[4] was gained by attending a term of economics lectures while doing some postgraduate work. However, his mathematics background, including a fellowship dissertation on probability, provided an alternative grounding. His first book was Indian Currency and Finance (1913). He became editor of the Economic Journal and secretary of the Royal Economic Society, giving him a broad awareness of current thinking.
His book The Economic Consequences of the Peace in 1919 did much to establish him as a leading economic commentator. In it, he argued (polemically) that the Treaty of Versailles was economically ruinous for Europe as a whole, and he penned withering critiques of US president Wilson, French president Clemenceau and British prime minister Lloyd George. It became a bestseller in both the UK and the USA.
He is best known for his 1936 book The General Theory of Employment, Interest and Money (usually abbreviated to General Theory), which had a significant effect on economic theory and government policies from shortly after publication until the 1970s. Prior to the ‘Keynesian revolution’, the classical laissez-faire economics of Adam Smith gave credence to free markets self-correcting by means of an ‘invisible hand’. The neoclassical economics of Keynes’s academic sponsor Alfred Marshall was based on markets finding equilibrium through the interaction of supply and demand, driven by rational behaviour. However, the persistently high, non-self-correcting unemployment level of the 1930s led to openness to Keynes’s new approach.
His work gave support to government intervention to stimulate demand through spending, even if this created a deficit. Its influence persisted until the 1970s when there was a shift to the monetarism of Milton Friedman, focussing on money supply as a key tool. The global financial crisis of 2007-2008 led to a partial resurgence of Keynesian ‘pump-priming’, and the coronavirus crisis also resulted in huge government interventions.
One of Keynes’s best-known phrases is ‘In the long run, we are all dead.’[5] It was not a recommendation of short-termism but a critique of economists whose emphasis on the long term meant, in Keynes’s view, that they could not make a useful contribution to current affairs.
Keynes’s main criticism of Churchill was in relation to the gold standard, published as an essay entitled ‘The Economic Consequences of Mr. Churchill’ in 1925.[6]
In November 1924, Stanley Baldwin* appointed Churchill as chancellor of the exchequer, despite Churchill’s lack of financial experience, probably to keep him distracted and within the camp. Churchill was as surprised as anyone, honoured, and grateful that he was being appointed to one of the major offices of state after two years of political isolation. He commented later about the invitation: ‘I should have liked to have answered “Will the bloody duck swim?” but as it was a formal and important occasion I replied “This fulfils my ambition.”’[7]
One of Churchill’s first major decisions was whether the UK should return to the gold standard, and if so, at what exchange rate. The UK had joined the system in 1821 but it was discontinued at the beginning of World War I, coming back into operation afterwards. Under pressure from the Treasury, the Bank of England and economic advisers, Churchill opted to re-join, at the pre-war US dollar exchange rate.
Keynes was in a minority of economists opposing the return to what he called a ‘barbarous relic’[8] and argued that the exchange rate used was 10 percent too high, making imports too expensive and exports too cheap. He was proved correct, with one of the consequences being a deterioration of workers’ spending power and the 1925 general strike.
In his essay against Churchill, Keynes asked, ‘Why did he do such a silly thing?’ Keynes’s own answer was: ‘Partly, perhaps, because he has no instinctive judgement to prevent him from making mistakes; partly because, lacking this instinctive judgement, he was deafened by the clamorous voices of conventional finance; and, most of all, because he was gravely misled by his experts.’ Later in the essay he wrote, ‘The plight of the coal miners is the first, but not – unless we are very lucky – the last, of the Economic Consequences of Mr. Churchill’.[9]
One of Churchill’s jokes was about the need for one-handed economists because they were always arguing that ‘on the one hand… but on the other hand…’ It has been attributed to Harry Truman but was in circulation beforehand. Keynes’s polemic style made him a one-handed economist, and it was rather Churchill that was two-handed due to his lack of experience.
As a Conservative, Churchill generally opposed Keynes’s interventionist economics, but the two found a friendly personal equilibrium.
As a Liberal in the early 1900s, Churchill supported interventionist government policies that were viewed as radical at the time (see the Budget Protest League*). His biographer Roy Jenkins describes him as being ‘at this stage something of a Keynesian before Keynes’.[10] By the time Liberal-supporting Keynes had established his name in government circles, Churchill had switched back to the Conservatives and had adopted their more laissez-faire approach. Although Churchill found some of Keynes’s arguments convincing, he was more attracted to the ideas of Austrian-British Friedrich Hayek whose later book The Road to Serfdom (1944) became a well-known treatise against significant government involvement in economic planning.
However, as with many of his public adversaries, Churchill developed a friendly relationship with Keynes, based on mutual respect. They had some areas of common ground, including both being opposed to communism as well as fascism. In 1927, only two years after The Economic Consequences of Mr. Churchill, Churchill invited Keynes to join his dining organisation, the Other Club (see Birkenhead* (Friends)). In 1932, after Churchill was run over in New York, Keynes was one of the contributors to the purchase of a car as a gift to welcome him home.
The dining camaraderie did not prevent Keynes from continuing to express his opposing opinions forcefully, as encouraged by the Other Club’s rules. In 1928, he wrote to Churchill, ‘Dear Chancellor of the Exchequer, What an imbecile Currency Bill you have introduced!’ Churchill replied, ‘My dear Keynes […] I will read your article enclosed and reflect carefully, as I always do, on all you say’.[11]
Both were unique individuals with impressive minds and strong personalities. Lionel Robbins, a British economist who attended the Bretton Woods meetings with Keynes, wrote that ‘Keynes must be one of the most remarkable men that ever lived – the quick logic, the birdlike swoop of intuition, the vivid fancy, the wide vision, above all the incomparable sense of the fitness of words […] Only [Churchill] is of comparable stature. […] But the greatness of the Prime Minister is something much easier to understand than the genius of Keynes.’[12]
Keynes was part of the ‘Bloomsbury Set’, a group of talented and socially liberal individuals.
Although it was not a formal organisation, the Bloomsbury Set’s ‘members’ included the writers E.M. Forster, Leonard Woolf and Lytton Strachey, as well as the artist Duncan Grant and art critics Clive Bell and Roger Fry. Four others were siblings from the Stephen family: artist Vanessa, who married Clive Bell; barrister Thoby (pronounced ‘Toby’); writer Virginia, who married Leonard Woolf; and author and psychoanalyst Adrian. Nearly all the men had been students at Cambridge and the women at King’s College London. Many of the Cambridge students had been members of the ‘Apostles’, drawn primarily from King’s and Trinity colleges.
They lived, worked or met in the Bloomsbury area of London, beginning with Vanessa’s ‘Friday Club’ at her home in Fitzroy Square and Thoby’s ‘Thursday Evenings’. They were said to have ‘lived in squares, painted in circles and loved in triangles’.[13] An example of the latter was Clive and Vanessa Bell who remained married while Vanessa lived with Duncan Grant, with Clive as a frequent visitor. Grant was one of Keynes’s many former lovers.
Keynes was at times viewed with concern by the others. Many were pacifists and disliked his working for the Treasury during World War I, facilitating the financing of the conflict. He redeemed himself somewhat in their eyes afterwards with his anti-Versailles diatribe. A second source of ambivalence was his introduction of Lydia Lopokova into Bloomsbury social circles (see below).
The Bloomsbury Set was only one of Keynes’s many affiliations, which included various dining, discussion and business clubs.[14] He was also a director of the Bank of England; bursar of King’s College, Cambridge; a director and vice-president of the British Eugenics Society (now the Galton Institute); and vice-chairman of a Marie Stopes organisation, promoting family planning. With Lydia’s encouragement and shared interest, his patronage of the arts included involvement with the Camargo Society, a ballet company; the Royal Opera House; Sadler’s Wells Theatre; the Cambridge Arts Theatre; and the Arts Council of Great Britain, of which he was the first chairman.
Keynes first saw his future wife, ballerina Lydia, on stage in 1921 and became enthralled.
Lydia Lopokova trained as a ballerina in Russia, then became part of Sergei Diaghilev’s Paris-based Ballets Russes. She spent two years in the USA, to great acclaim, where she was engaged briefly to journalist Heywood Broun. Broun was later a member of the Algonquin Round Table (also known amongst themselves as the ‘Vicious Circle’) which had some similarities with the Bloomsbury Set and included composer Irving Berlin, writer Noël Coward and comedian Harpo Marx. She had an affair with composer Igor Stravinsky and married an Italian, Randolfo Barrocchi, but it turned out that he was already married.
In 1921, she performed in The Sleeping Beauty in London, which Keynes saw, and fell for her. They wed in 1925 after her US marriage annulment had been finalised. They corresponded almost daily when apart, Lydia in her idiosyncratic English, such as: ‘My further utterings contain no words but a widespread kissing on your attractive eyes’ and ‘If it is cold where you are, as it is here, I warm you with my foxy licks’. She often addressed him as ‘Maynarochka’ and signed herself off with phrases such as ‘Your lively vitamin’ and ‘Your pale chaffinch’.[15]
The Bloomsbury set were initially sceptical about Keynes’s switch to heterosexuality and resentful of what they saw as intellectual compromise, disrupting the group’s dynamics. Strachey described Lydia as a ‘half-witted canary’. Virginia Woolf wrote, ‘And they say you can only talk to Maynard now in words of one syllable’. Over time they began to realise the strength of the Keynes’s marriage and some began to appreciate Lydia’s abilities and personality, including E.M. Forster who wrote, ‘How we all used to underrate her!’[16]
They have subsequently been referred to as ‘the beauty and the brain’ and inevitably ‘the odd couple’, sometimes being compared to Marilyn Monroe and Arthur Miller. Even their physical sizes were strongly contrasted, with Keynes being an imposing 6’7” (2.01 m) and Lydia about 5”0’ (1.52 m). Although Lydia’s fame in her time exceeded that of many in the Bloomsbury set, she has been largely forgotten, partly because of her own withdrawal from public attention after Keynes’s death, even in ballet circles. Nine years his junior, she outlived him by 35 years.
Keynes once hid a Cézanne painting in a hedge in Sussex because he was too tired to carry it.
In 1918, art critic and fellow Bloomsbury Set member Roger Fry hatched a plan with Keynes as a Treasury employee for the British government to buy artworks from the estate of the recently deceased French artist Edward Degas. With government approval and £20,000 in French francs (equivalent to £1.1 million today), Keynes travelled to Paris with Sir Charles Holmes, director of the National Gallery. They purchased 135 valuable works at bargain prices for a total of nearly £13,000 (equivalent to £755,000 today), while German shells were landing near the auction house.
Holmes did not agree to the purchase of Cézanne’s Still Life with Apples (c. 1878), but Keynes bought it himself for £500 (equivalent to £29,000 today). On arrival back in England, he was dropped off at the end of a muddy track near Vanessa Bell’s farmhouse, Charleston, in the South Downs in Sussex. Too tired to carry all his luggage, he hid the painting in a hedge next to a ditch, which was retrieved after dinner by his hosts. Keynes later donated it to King’s College, Cambridge, along with over 130 other works. King’s has loaned some of these, including Still Life with Apples, to Cambridge’s Fitzwilliam Museum.
Lydia was a subject of portraits by Pablo Picasso, Augustus John, Glyn Philpot and Walter Sickert* (Friends). Keynes sat for portraits by some of his Bloomsbury set, as well as for William Roberts and Gwen Raverat, née Darwin, Charles Darwin’s granddaughter (Keynes’s brother Geoffrey married Margaret Darwin, Gwen’s sister).
Keynes loved the South Downs and later moved into Tilton House near Firle, within a few miles of Vanessa Bell and Virginia Woolf. He spent long periods of recuperation at Tilton House and its farm due to a heart condition and exhaustion from overwork, cared for by Lydia. He had a serious angina attack in 1937 and a series of heart attacks in early 1946 including a fatal one in April of that year, dying at his country home at age 62. His ashes were spread on the Sussex Downs nearby.
3. Biographical summary
| Occupation | Economist, journalist, financier |
| Country | UK |
| Career | Clerk, India office (1908-09). Economics lecturer, Cambridge (1909-19). Fellow, King’s College, Cambridge (1909-46). Author (1913-46). Treasury official (1915-19). The Economic Consequences of the Peace (1919). Bursar, King’s College (1919-46). Vice-Chairman of Marie Stopes’s Society for Constructive Birth Control and Racial Progress (1932). The General Theory of Employment, Interest and Money (1936). Founder, Cambridge Arts Theatre (1936). Director, British Eugenics Society (1937-44). Lecturer and Treasury advisor (1939-44). UK delegate, Bretton Woods Conference (1944). Negotiation of US government loan to UK (1945). Chairman, Arts Council of Great Britain (1946). |
| Born | 1883 at 6 Harvey Road, Cambridge, Cambridgeshire (nine years younger than Churchill) |
| Father | John ‘Neville’ Keynes (1805-1878), economist and lecturer in Moral Sciences, Pembroke College, Cambridge |
| Mother | Florence Ada Brown (1821–1907), charity administrator, mayor of Cambridge |
| Siblings | Eldest of three children: John Maynard (1883-1946)Margaret (1885-1970); married Archibald Hill, Nobel prize winner (physiology, 1922)Geoffrey (1887-1982), surgeon; married Margaret Darwin, Charles Darwin’s granddaughter |
| Education | Eton College; King’s College, Cambridge (mathematics and classics) |
| Spouse | Lydia Lopokova (1892-1981), Russian ballerina, m.1925 until Keynes’s death |
| Relationships | Numerous including Duncan Grant, painter (best man at Keynes’s wedding); Dilly Knox, codebreaker |
| Children | None. Lydia had a miscarriage in 1926. |
| Died | 1946 at his country home Tilton House, Firle, East Sussex, aged 62 (19 years before Churchill); heart attack |
| Buried | Ashes scattered on South Downs, East Sussex, despite his wish to be interred in the crypt at King’s College |
| Nickname | Snout (childhood); Lanky (wife); Pozzo, meaning ‘a well’ or ‘cesspool’, possibly after a Samuel Beckett character in Waiting for Godot (1953) (Bloomsbury group) |
| Height | 6’7” (2.01 m) |
| Time magazine | One of ‘100 Most Important People of the Twentieth Century’. Front cover: December 1965. General Theory was in Time’s 2011 list of 100 best and most influential non-fiction books written in English since 1923. |
4. See also
Decline of British Empire
Churchill and economics
- Budget Protest League*
- UK strikers*
The Other Club
Birkenhead, Lord* (F.E. Smith) (Friends)).
Churchill and intellectuals
- Wells, H.G.* (Friends) (writer)
Churchill controversies
- Gold standard (Appendix C)
5. Further reading
Kenyatta
Keynes
- Barnett, Vincent, John Maynard Keynes (Routledge, 2013)
- Davenport-Hines, Richard, Universal Man: The Seven Lives of John Maynard Keynes (HarperCollins Publishers, 2015)
- Felix, David, Keynes: A Critical Life (Greenwood Press, 1999)
- Skidelsky, Robert, Keynes: A Very Short Introduction (OUP Oxford, 2010)
Keynes and his wife Lydia Lopokova
- Lopokova, Lydia, and John Maynard Keynes, Lydia and Maynard: Letters Between Lydia Lopokova and John Maynard Keynes, ed. by Polly Hill and R.D. Keynes (Andre Deutsch, 1989)
- Mackrell, Judith, Bloomsbury Ballerina: Lydia Lopokova, Imperial Dancer and Mrs John Maynard Keynes (Orion, 2013)
Bloomsbury Group
- Rosenbaum, Stanford Patrick, ed., The Bloomsbury Group: A Collection of Memoirs and Commentary (University of Toronto Press, 1995)
- Spalding, Frances, The Bloomsbury Group (National Portrait Gallery Publications, 2021)
- Thirlwall, A.P., and Derek Crabtree, Keynes and the Bloomsbury Group (Palgrave Macmillan UK, 1980)
Keynes and Churchill
- Arndt, H.W., ‘The Wizard and the Pragmatist’, International Churchill Society, 2011 <https://winstonchurchill.org/publications/finest-hour/finest-hour-153/thewizard-and-the-pragmatist/>
Keynes and economic theory
- Wapshott, Nicholas, Keynes Hayek: The Clash That Defined Modern Economics (W. W. Norton, 2011)
6. References
[1] Richard Davenport-Hines, Universal Man: The Seven Lives of John Maynard Keynes (HarperCollins Publishers, 2015).
[2] Davenport-Hines, p. 000.
[3] Cambridge did not become a city until 1951, a status granted by the monarch. Oxford has been a city since 1542. Eighteen of the UK’s 69 present-day cities do not have cathedrals, including Cambridge, disproving the common notion associating cities with cathedrals. There are a few towns with cathedrals that are not cities, including Guildford, Bury St Edmunds, Oban and Enniskillen. London has two cities: the City of London and the City of Westminster.
[4] The writer Thomas Carlyle coined the phrase ‘dismal science’ in 1849 in relation to slavery in the West Indies, not, as is commonly thought, in relation to the dire predictions of the economist Thomas Malthus. Carlyle had, however, referred earlier to Malthus’s work as ‘dismal’.
[5] J.M. Keynes, A Tract on Monetary Reform (Macmillan, 1923), p. 80. ‘But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.’ (Italics emphasis is in the original.)
[6] J.M. Keynes, ‘The Economic Consequences of Mr. Churchill’, The Economics Network, 1925 <https://www.economicsnetwork.ac.uk/archive/keynes_persuasion/The_Economic_Consequences_of_Mr._Churchill.htm>.
[7] Martin Gilbert, Winston S. Churchill: Volume 5: The Prophet of Truth, 1922-1939 (Rosetta Books, 2015), p. 59. ‘Will the bloody duck swim?’ was one Churchill’s favourite phrases, akin to ‘Is the Pope a Catholic?’. Violet Bonham Carter (Lady Asquith) knew this and used it when Churchill asked her if she would like to be appointed as a director of the BBC (see Violet Bonham Carter* (Friends)).
[8] Keynes, A Tract on Monetary Reform, p. 172.
[9] Keynes, ‘The Economic Consequences of Mr. Churchill’.
[10] Roy Jenkins, Churchill (Pan Books, 2002), p. 151.
[11] J.M. Keynes, Collected Writings of John Maynard Keynes: Activities 1922-1929: The Return to Gold and Industrial Policy, ed. by Donald Moggridge (Macmillan, 1981), p. 749.
[12] Lionel Robbins and James Meade, The Wartime Diaries of Lionel Robbins and James Meade, 1943–45, ed. by Susan Howson and David Moggridge (Palgrave Macmillan UK, 1990), p. 158.
[13] Attributed to American writer Dorothy Parker.
[14] They included the Eighty Club, a dining association for Liberal Party supporters; the Cambridge Political Economy Club, an economics version of the Apostles; the London Political Economy Club; the Tuesday Club, a business group; the Cranium Club, a dining society for intellectuals; and the Athenaeum, a private members’ club.
[15] Lydia Lopokova and John Maynard Keynes, Lydia and Maynard: Letters Between Lydia Lopokova and John Maynard Keynes, ed. by Polly Hill and R.D. Keynes (Andre Deutsch, 1989).
[16] David Felix, Keynes: A Critical Life (Greenwood Press, 1999), p. 182.