Keynes In The Long Run
Niall Ferguson's suggestion that John Maynard Keynes was concerned only with the present doesn't stand up to scrutiny, argues Paul Lay.
‘The long run is a misleading guide to current affairs. In the long run we are all dead,’ wrote John Maynard Keynes in his 1923 work, A Tract on Monetary Reform.
Though rarely quoted in full, it is the utterance for which the great economist is both best known and most damned. An assertion of the primacy of the present over the past and the future, it is often contrasted with Edmund Burke’s definition of society as ‘a partnership not only between those who are living, but between those who are dead, and those who are to be born’. There can be little doubt that Keynes’ elevation of a permanent present has been one of the most influential and enduring ideas of the postwar West, especially resonant in the 1992 US presidential campaign slogan of Bill Clinton – the ultimate babyboomer, of appetites to be quenched here and now – ‘it’s the economy, stupid’. Coined by the strategist James Carville, the phrase took on its own life as a ‘snowclone’ and stands as the motif of the reckless pursuit by too many western governments of short-term prosperity at the price of long-term pain, which sowed the seeds of the current world economic crisis, following the banking collapse of 2008.
Quite why – or, indeed, whether – Keynes embraced such a ‘short-termist’ world view is a question in need of an answer, for which the starting point should be the work of his biographer, Robert Skidelsky. It certainly did not stem from the fact that he ‘was a homosexual and had no intention of having children’, a ‘stupid and tactless’ argument made last month by the Harvard historian Niall Ferguson, for which he offered a swift and dignified apology. Apart from the daft idea that gay men and lesbians have no interest in the past or the future, it doesn’t appear to be at one with Keynes’ life. His marriage in 1925 to the ballerina Lydia Lopokova appears to have been a sexually active one: Skidelsky claims that Lopokova miscarried Keynes’ child, though others have disputed this, suggesting that their childlessness may be explained by the fact that Lopokova, while a star of the Ballets Russes, had endured damaging abortions, while Keynes was already middle aged when they married, and maintained a bisexual lifestyle.
Keynes is in many ways an unattractive man, a fact confirmed by Benn Steil’s article in our June issue on his role in the Bretton Woods negotiations of 1944, where his intellectual arrogance, diplomatic ineptitude and patronising approach to the ascendant Americans were on prominent display. Yet the idea that Keynes was concerned only with the present takes a battering at Bretton Woods. He was by then 60, relatively old for the time, having suffered chronic heart trouble for many years. Yet he immersed himself in the reordering of the postwar world and, in particular, its economic institutions, the International Monetary Fund and the World Bank, that bear so much of his personal stamp. Two years later he was dead, worn out by his participation in the negotiations leading to the creation of a new world order for the benefit of generations yet unborn. Scholars will continue to make judgments about Keynes’ contribution to the effort, but off the cuff soundbites, to which even the best celebrity historians are prone, contribute little.