JOHN MAYNARD KEYNES
John Maynard Keynes was born in Cambridge, England in 1883. His family was very academic and pushed Keynes’ schooling. His father was an economist and his mother was the first female mayor of Cambridge. Keynes himself was studious, doing well at school, and then graduating from Cambridge University with a degree in mathematics.
Following university Keynes worked in the India Office and also worked on a dissertation which eventually earned him a fellowship at King’s college, London. Keynes quit the position after only a couple of years and returned to Cambridge in 1908. Soon after world war one broke out and he joined the treasury. In this role he identified a number of issues with the economy, and published a book which outlined his ideas. The book was titled ‘The Economic Consequences of the Peace’ and outlined Keynes’ argument against the severe reparations that were imposed on Germany after the First World War. Keynes’ predictions in the book were supported following Germanys economic collapse which resulted in the breading of extremist groups, and it is argued ultimately led to World War II.
Keynes is most remembered for his economic ideas and is considered one of the most influential economists of the 20th century. His most famous economic proposal and best known work, was published in 1936 and was titled ‘The General Theory of Employment, Interest and Money’. The book outlined Keynes’ idea that when national economies suffer a downturn, as happened in the Great Depression, governments should borrow and spend money to boost economic activity. Keynes argued that by doing so economic growth would occur, and some of the proceeds could be used to repay the debt incurred. The work helped the British Government in a time of severe economic uncertainty. As a result of the theory, and his previous economic work, Keynes was made a member of the House of Lords in 1942.
Another important contribution that Keynes made was his championing of concentrated investment portfolios that he proposed, in order for them to be successful, should only be made up of investments that the investor understood and had become highly knowledgeable about. Keynes was also involved with investing. He set up Keynes’ Chest Fund, and during an eighteen year period that included World War II and the Great Depression, the fund grew fivefold. Such increases were unheard of at the time as the UK stock market declined by over fifteen percent in the same eighteen year period. Keynes died in 1946.