John Maynard Keynes was as awkward as he was brilliant.
He was 6’7” tall, and once rode in a motorcycle sidecar, giraffe-legs-akimbo, so that he could get to an important appointment on time.
He was a keen painter, a bisexual, and a champion of women’s rights. A founder of the Bloomsbury Group, Keynes sucked up all of the intellectual energy wherever he went. The likes of Bertrand Russell, author of Principia Mathematica and A History of Western Philosophy, and Virginia Woolf were in awe of his ability to think and talk deeply in real time.
Very brief side note:
writes Beyond Bloomsbury on Substack; Victoria is a PhD researcher of the artists and writers of the Bloomsbury Group. Her page is well worth a look if you’re curious about this important and influential group.The quirkiness and intellectual rigor of Bloomsbury combined in meaningful ways for Keynes. Just three years after moving into this community of intellectual titans, Keynes penned “The Economic Consequences of the Peace," one of the most important and influential publications in the history of economics, and a scathing indictment of the framework of society.
Scathing, for Good Reason
Just after the conclusion of World War I, Europe was reeling from the devastation. Keynes—widely considered one of the great economic thinkers of the day—was a key participant in the discussions that led up to the Treaty of Versailles, but he saw that shortsighted economic interests of individual nations were the only consideration leaders were willing to entertain.
World leaders, Keynes felt, should be made of sterner stuff than to simply want to hold onto power, especially in a democratic society. But that’s exactly what the Treaty of Versailles delivered: a demand for reparations to rebuild Europe that was so absurd as to be unsustainable.
Versailles positively burst Keynes’s bubble in this regard, pissing the great thinker off, in a manner of speaking. Disillusioned with those holding the levers of power, he went on the offensive, picking up his pen for the monumental task at hand. He also resigned from the committee he was on.
He made a few predictions in his piece:
that the reparations would cripple Germany’s economy
that this would lead to hyperinflation
all this would sow the seeds of another great conflict, destabilizing Europe for generations
His focus on the long-term sustainability of economic policies over immediate political gains was revolutionary, and unlike his presence at Versailles, The Economic Consequences of the Peace could not be ignored.
Here's a taste of Keynes's prescient insights, eloquently captured by his own words:
"If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp."
Vengeance came in the form of the rise of the Nazi Party and its subsequent takeover of Germany, leading directly to World War II.
Simple Takeaways
We can learn a great deal from the things Keynes wrote, but we can also see that long-term economics can drive major geopolitical events. If this seems obvious or mundane today, thank Keynes for that.
Today, with rising populism, nationalism, trade wars, and strained international relations, policymakers often prioritize short-term gains, just as Keynes lamented in his own time.
In Türkiye, President Recep Tayyip Erdoğan infamously lowered interest rates at a time when inflation was out of control, more or less throwing a “popularity bone” to his people so he could hold onto power. Raising rates would have been tough, but almost certainly the correct economic call.
And: Brexit. I can almost feel Keynes’s eyes rolling in their sockets (like everything he did, when Keynes’s eyes roll, you feel it).
The pro-Brexit campaign preyed on populist fears of the “liberal elites” on the continent had too much control over trade arrangements and even sovereign law, and Russia was all-too-eager to jump in and stoke these fears. Putin could not have hoped for a better outcome than a further divided Europe.
Ripple effects from Brexit are being felt today, and there are a lot of areas where the negative implications are only just now starting to become clear. Trade volumes with Europe fell as restrictions and protectionism took center stage, and things got worse for the UK when inflation began to creep away from the Bank of England’s control.
The U.S.-China trade war seems a lot more complicated to me than either of the previous two scenarios. After all, the US and China are often competing for the same strategic control, or the same set of resources, so some protectionism over AI development could be seen as part of a longer-term strategy.
Still, the world tends to benefit more from free and open trade. Tariffs and trade restrictions risk destabilizing international relations and global supply chains, something we’re clearly going to continue dealing with for the remainder of this decade.
Ultimately, we have to navigate away from “zero-sum” type thinking, and gradually move over to more of a growth mindset.
Concluding Thoughts
Our world is a complex place. There are hundreds of nations jockeying for a little share of power on the global stage, and corporations and ultra-rich individuals compete for that same power. With so many players, we need a framework to help us think about how things will play out.
Today, Keynes's theories not only inform government economic policies but also offer a framework for international cooperation, urging us to think beyond short-term gains for sustainable global progress.
Thinking about how the entire world is connected—how one nation’s decision can affect every other nation’s future—is one important aspect of this framework. Another is to look far ahead of the interests of individuals or nations, and further, to how things will play out over much longer periods of time.
It is this deep insight that draws me to Keynes. That, and his punk-rock awkwardness! Keynes’s ability to step outside of the expectations of institutional thought made him great. His ideas have proven themselves out over the last century, and Keynes remains a titan of intellectual and economic thought.
Man, Keynes gets to do the world's longest "I Told You So" dance.
Yes, but what does Keynes have to say about woke culture?