John Maynard Keynes Biography

John Maynard Keynes was the most influential British economist of the 20th century

Quick Facts

Birthday: June 5, 1883

Nationality: British

Died At Age: 62

Born In: Cambridge,April

Famous As: Economist

Died On: April 21, 1946

John Maynard Keynes was the most influential British economist of the 20th century whose ideas fundamentally changed the practice of macroeconomics and the economic policies of the world.
He is regarded as the Founder of Macroeconomics.
He introduced Keynesian principles to the world that created a revolution in economic thinking with its unconventional approach. It challenged neoclassical economics and brought to the forefront the importance of state intervention to moderate the economic activity of the country .
The Great Depression was an extremely severe global economic downturn. In the United States, it started in 1929 and ended in 1941. In other countries, the Great Depression started and ended slightly earlier or later than it did in America.From 1929 to 1932, global GDP shrank by approximately fifteen percent. In the US, unemployment reached 25%. In fact, in some countries, it exceeded 33%.During the Great Depression, Keynes spearheaded an economic thinking revolution. He challenged the ideas of contemporary economists who insisted that free markets were self-adjusting. His contemporaries were neoclassical economists.Neoclassical economists believe that free markets automatically provide full employment in the short to medium term.Keynes, on the other hand, argued that aggregate demand was the driver of overall economic activity. In other words, Keynesian Economics asserts that sometimes government intervention is necessary.
His 1936 book ‘The General Theory of Unemployment, Interest and Money’ was path-breaking in terms of content. Through his book, he argued that full employment could be maintained only with the help of government spending .
He believed that unemployment is basically caused if people don’t spend enough money. Lower spending results in demand falling further and a vicious circle commences which leads to job losses and a further fall in spending.
Keynes’ solution to the problem was that governments should borrow money and boost demand by pushing the money into the economy. Once the economy has recovered and is expanding, governments should pay back the loans.
Keynes was also responsible for the foundation of the International Monetary Fund (IMF) and World Bank (WB). Till date, he is best remembered as one of the world’s most influential economists of all time.
In 1936, Keynes came up with his magnum opus, titled ‘The General Theory of Unemployment, Interest and Money.’ The book came at a time when the unemployment rate was over 20 per cent in Britain. It was path-breaking in terms of content and revolutionized the economic ideologies of the world.
Keynes argued through his book that full employment could be maintained only with the help of government spending.
The General Theory of Unemployment, Interest and Money’ set the foundation of modern macroeconomics. It became a benchmark for future economic thought. His ideas, which are fondly known as Keynesian principles followed one principal rule to reduce unemployment by increasing government spending even if that meant running on deficit budget.
Keynes made it clear that he was a firm believer in balanced budgets and regarded the proposals for programs of public works during the Great Depression as an exceptional measure to meet the needs of exceptional circumstances.
John Maynard Keynes’ most prominent work came in 1936 with his book ‘The General Theory of Employment, Interest and Money’. The book became a benchmark for future economic thought and laid the foundation for Keynesian principles that have sustained till date. Through the book, Keynes created a revolution in economic thinking by bringing to foray the importance of budget deficit.
In his lifetime and afterwards, Keynes has been referred to as one of the most influential economists of the 20th century. In 1999, to mark his legacy, ‘TIME’ magazine listed him on the ‘Most Important People of the Century’ list. Britain’s paper, ‘The Economist’ described him as the ‘Britain’s Most Famous 20th Century Economist.
Books by John Maynard Keynes