General Theory of Employment, Interest and Money: With the Economic Consequences of the Peace by John Maynard Keynes
John Maynard Keynes (1883-1946) is perhaps the foremost economic thinker of the twentieth century. On economic theory, he ranks with Adam Smith and Karl Marx; and his impact on how economics was practiced, from the Great Depression to the 1970s, was unmatched.
The General Theory of Employment, Interest and Money was first published in 1936. But its ideas had been forming for decades ? as a student at Cambridge, Keynes had written to a friend of his love for 'Free Trade and free thought'. Keynes's limpid style, concise prose, and vivid descriptions have helped to keep his ideas alive - as have the novelty and clarity, at times even the ambiguity, of his macroeconomic vision. He was troubled, above all, by high unemployment rates and large disparities in wealth and income. Only by curbing both, he thought, could individualism, 'the most powerful instrument to better the future', be safeguarded. The twenty-first century may yet prove him right.
In The Economic Consequences of the Peace (1919), Keynes elegantly and acutely exposes the folly of imposing austerity on a defeated and struggling nation.
John Maynard Keynes, 1st Baron Keynes, CB, FBA; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of modern macroeconomics and the economic policies of governments. He built on and greatly refined earlier work on the causes of business cycles, and is widely considered to be one of the most influential economists of the 20th century and the founder of modern macroeconomics. His ideas are the basis for the school of thought known as Keynesian economics and its various offshoots. In the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He instead argued that aggregate demand determined the overall level of economic activity and that inadequate aggregate demand could lead to prolonged periods of high unemployment. According to Keynesian economics, state intervention was necessary to moderate "boom and bust" cycles of economic activity. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. Following the outbreak of World War II, Keynes's ideas concerning economic policy were adopted by leading Western economies. Keynes died in 1946; but, during the 1950s and 1960s, the success of Keynesian economics resulted in almost all capitalist governments adopting its policy recommendations. Keynes's influence waned in the 1970s, partly as a result of problems with inflation that began to afflict the Anglo-American economies from the start of the decade and partly because of critiques from Milton Friedman and other economists who were pessimistic about the ability of governments to regulate the business cycle with fiscal policy. However, the advent of the global financial crisis of 2007–08 caused a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the crisis by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.
