Colin Wilson on Gabriel Pascal John Jones on Christopher Hill,
Christopher Sykes on Cecil Beaton's aunt J. E. J. Altharn on philosophy, Auberon Waugh on a sandwich
R. M. Hartwell on the young Keynes
The paradox of John Maynard Keynes is that of the libertarian Liberal who provided the theoretical and practical bases of modern interventionism. The twentieth century, for the democracies, has been a sad chronicle of the inexorable advance of the state in economic and social affairs, and it was Keynes's melancholy if involuntary role, as an intellectual and civil servant, to promote that advancement. Not that he desired it; not that his theories implied more than a balancing role for the state; but it was his misfortune that the theories he devised and the policies he recommended, which were forged for economies under strain, were later given Spurious universality and were used extensively to support a socialism he certainly would not have supported. With the sole exceptions of Indian Currency and Finance and Treatise on Probability all of Keynes's writings were written in unusual economic circumstances, and, to an important extent, with the same exceptions, were polemical in character. Keynes wrote mainly in reaction either to total war or to abnormally high unemployment, and the policies he devised in each case were dominated by one clear and dominant objective : in the case of war, how best to finance a war economy, and in the case of the inter-war years, how best to reduce massive unemployment. It is relatively more easy to make policies to meet a single objective than to come to terms with the simultaneously conflicting needs of many objectives. Keynes was not faced so much with many competing problems as always with one obvious and overriding problem which demanded analysis and solution; and it was theoretically and practically possible to simplify this problem and its solution, and this he did -brilliantly. The great tragedy — for theory and Policy — is that he died before the different and perhaps more complicated problems of the second half of the twentieth century became evident. For these new problems it can never be said with certainty what theories and prescriptions would have come from his fertile mind. We can be sure that he would not have been silent; we can be certain that he would have continued to support private enterprise, at the same time as being concerned with making a market economy work more efficiently; we can guess that he would have considered inflation the overriding problem of the post-war world. It is probable that his death robbed Britain of the one man who combined the theoretical ability and the practical insights to deal effectively with her postwar problems, more effectively at least than the host of lesser figures who since 1950 have misled governments and confused the public with their gloomy forebodings and harmful policies. Keynes, who was born in 1883 and died in 1946, is by far the most impor tant economist of the twentieth century, being responsible both for a revolution in economic thought and in the econo mic policies of government. No economist since Adam Smith has had such theoretical and practical impor tance; no economist has ever had his unique abilities and the opportunity to exercise them in public office. Keynes combined intellectual power and ad ministrative skill; he had a prodigious energy and capacity for work; his per suasiveness and debating skill made him an awe-inspiring controversialist. He dominated economics, both because of his own contributions to theory and be cause of his position for over thirty years as editor of the Economic Jour nal, journal of the Royal Economic Society and perhaps the world's leading periodical in its subject. It is fitting, therefore, that the Society should honour him as an economist and editor with a memorial edition of his economic writings in twenty-four volumes.* These volumes will include all his published books, his writings at the India Office and at the Treasury during two wars, his contributions to journals and to the press, and his correspondence on economic affairs.
The edition is not concerned with Keynes's many other activities — in the arts, for example — and will not include private and personal correspondence.
However, as the general introduction declares, "Keynes himself always had a joy in fine printing, and the Society, with the help of Messrs Macmillan as publishers and Cambridge University. Press as printers, has been anxious to give Keynes's writings a permanent form that is wholly worthy of him." The first four volumes to be published — I, II, XV and XVI — fulful the Society's aims; they are handsomely bound, beautifully printed, and carefully edited, the beginning of an enterprise to rival Straffa's superb edition of Ricardo. In addition to Indian Currency and Finance (Volume 1) and The Economic Consequences of the Peace (Volume II), Volume XV contains letters, minutes and memoranda for the period 1906 to 1914 (covering Cambridge and the India Office) and Volume XVI for the period 1914 to 1919 (covering the Treasury and the Versailles Treaty negotiations).
What do these volumes reveal of the development of Keynes? At the beginning we see Keynes,. the recent graduate, concentrating on the Civil Service examinations which led him to the India Office; at the end we see him resigning from the Civil Service in protest at the Peace Treaty, abandoning what appeared to be a brilliant public career. He was twenty-three when he entered the India Office, thirtyfive when he resigned from the Treasury, during which time he progressed enormously as a technical economist. But what was most impressive about the young Keynes was his limitless self-assurance, the certainty of his ability and the confidence with which he exercised it. "Is it monomania — this colossal moral superiority that we feel?", he wrote to Lytton Strachey in October 1905. "I get the feeling that most of the rest never see anything at all — too stupid or too wicked." Whether at the India Office before the war, or at the Treasury during the war, Keynes was inevitably dominant; he was cleverer and quicker than other people; he could work harder; he was more useful. He was certainly the most influential member of the Royal Commission on Indian Finance and Currency. Even though he was under thirty when appointed, his mastery of the subjeet and his ability to write persuasive and lucid., minutes allowed him to shape the .repcut and its recommendations in a remarkable fashion. Similarly with the Treasury, which Keynes joined in 1915. As Keynes himself wrote, "I was in the Treasury throughout the war and all the money we either lent or borrowed passed through my hands." By the end of the war Keynes headed a division responsible for all of Britain's inter-allied financial arrangements, a remarkably important role for a man not yet thirty-six years of age. Indeed up to 1918 Keynes's career went smoothly and successfully. Volume XVI ends, however, with failure and black despair; he could not influence events in Paris to praduce what he considered to be a rationali.peace treaty. In May 1919 he wrote to Duncan Grant, "Do write to me and remirid me that there are still some decent people in the world. Here I could cry all day for rage and vexation. The world cannot be quite so bad as it looks from the Majestic." Keynes, for the first time in his life, was faced with forces he could not understand and could not control. Keynes had grown up in an ordered and civilized world, and as he wrote later, "We were not aware that civilization was a thin and precarious crust erected by the personality and will of a very few, and only maintained by rules and conventions skilfully put across and guilefully preserved." Indian Currency and Finance, published in 1913, was Keynes's first book, arid was also his least controversial. It was well written, well argued, and well received, but it was in no sense novel or polemical. In spite of its cogency of argument and skilful analysis, it shows few signs of the Keynesian Revolution. Analytically it was in the mainstream of classical economics and Chapter II, on the gold-exchange standard, is perhaps the best exposition ever made of that phenonemon. But if the theory is not novel, what of the policy recommendations ? Keynes argued for a gold-exchange standard for India (to which, in any case, actual developments had moved) and for the establishment of a State Bank. The argument for a State Bank — for a degree of monetary management — was based on the desirability of centralizing gold reserves so that drains in time of crisis could be more easily met. Keynes showed that India's attraction for gold caused price fluctuations, and how those fluctuations, and consequent speculations, could be mitigated. The novelty of Keynes's policy recommendations, both here and in the report of the Royal Commission, was to argue that a currency system should allow a measure of manipulation in the interests of price stability. But if Keynes's first book was uncontroversial, his second, The Economic Consequences of the Peace (1919), was ultra-polemical. As Harrod has argued, it must surely take its place as one of the finest pieces of polemic in the English language. The book was a best-seller; it was translated into Danish, Swedish, Dutch, Flemish, Italian, Spanish, Russian, Japanese, Chinese and German and there was also an American edition; it made Keynes famous and gave him a role, still debated, in the fall of the Weimar Republic and the rise of Hitler. Keynes argued, briefly, that the provisions of the Peace Treaty were economically unjustified, and that the size of the reparations demanded was unrealistic and its results would be harmful, not only for Germany, but for Europe. The book was both an analysis of economic folly and a plea for magnanimity to a defeated foe. In the long run, however, Germany did not have to pay. The Dawes Plan was a liberal solution to the reparations problem, and Germany in the 'twenties received loans from America in excess of her reparations payments. Those who argue against Keynes can point out that, in spite of liberal treatment as regards reparations and foreign aid, Germany turned to Hitler and fascism. Would not harsher treatment, therefore, have been more effective ? In any case, as Etienne Mantoux argued, did not Keynes exaggerate the reparations bill and Germany's incapacity to pay ? Here, however, Keynes was surely right. Germany could only have paid the reparations originally demanded by building up a vast and successful export industry in competition with France and Britain. As Churchill declared in The World Crisis, Keynes "showed in successive chapters of unanswerable good sense the monstrous character of the financial and economic clauses." What Keynes underestimated was France's desire for guaranteed security, and, generally, the difficulty for even good men in difficult and emotional circumstances to be rational and generous.
What is most obvious in The Economic Consequences of the Peace is a nostalgia for the past, which produced one of the most striking passages in all of his writings : What an extraordinary episode in the economic progress of man that age was which came to an end in August 1914! The greater part of the population, it is true, worked hard and lived at a low standard of comfort, yet were, to all appearances, reasonably contented with this lot. But escape was possible, for any man of capacity or character at all exceeding the average, into the middle and upper classes, for whom life offered, at a low cost and with the least trouble, conveniences, comforts and amenities beyond the compass of the richest and most powerful monarchs of other ages. The inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep; he could at the same moment and by the same means adventure his wealth in the natural resources and new enterprises of any quarter of the world, and share, without exertion or even trouble, in their prospective fruits and advantages; or he could decide to couple the security of his fortunes with the good faith of the townspeople of any substantial municipality in any continent that fancy or information might recommend. He could secure forthwith, if he wished it, cheap and comfortable means of transit to any country or climate without passport or other formality, could despatch his servant to the neighbouring office of a bank for such supply of the precious metals as might seem convenient, and could then proceed abroad to foreign quarters, without knowledge of their religion, language, or customs, bearing coined wealth upon his person, and would consider himself greatly aggrieved and much surprised at the least interference. But, most important of all, he regarded this state of affairs as normal, certain, and permanent, except in the direction of further •improvement, and any deviation from it as aberrant, scandalous, and avoidable. The projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper, and appeared to exercise almost no influence at all on the ordinary course of social and economic life, the internationalisation of which was nearly complete in practice.
Keynes saw the world before 1914 as one in which the market economy worked smoothly, in which civilization was safe and unchallenged, and in which progress was certain. He held these views up to 1914, and even during the war, when he was able to satisfy his conscience about working for the Treasury at the same time as declaring himself a conscientious objector to military service. The negotiations for the Peace Treaty, however, changed him and made him more realistic about human affairs; it revealed 'wickedness and folly' he had not dreamed of. It had the effect of driving him out of public office back to the civilized security of Cambridge. Here he did not have to completely abandon his early beliefs. And so in 1938 Keynes admitted that, "1 still suffer incurably from attributing an unreal rationality to other people's feelings and behaviour (and doubtless to my own too) ".
R. M. Hartwell is a Fellow of Nuffield College and Reader in Economic and Social History at Oxford
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