Short Biography of John Maynard Keynes

Born: 5 June 1883

Died: 21 April 1946

Birthplace: Cambridge, England

Best known as: The British economist who created macroeconomics

John Maynard Keynes was one of the most influential economic thinkers of the 20th century. He was born the son of an economics lecturer at Cambridge University in 1883, the year of Karl Marx's death. After being educated at Eton College he entered King's College and studied economics while president of the Cambridge University Liberal Club. He built up his reputation as a lecturer at Cambridge before working for the Treasury during the First World War on overseas finances.

He became famous after World War I with The Economic Consequences of Peace, his 1919 critique of the Versailles Peace Conference. (He thought the harsh reparations demanded of Germany would lead to economic instability -- and they did.) His 1936 book, General Theory of Employment, Interest and Money, made him the most famous and influential economist since Adam Smith. Keynes's notion that governments should intervene in times of market distress eclipsed Smith's theory of capitalism and has influenced Western democracies since the 1930s.

Written during the depths of the Great Depression, his book argued that in order to keep people fully employed, governments have to run deficits when the economy is slowing. In other words the government should spend money it doesn't have to keep the economy afloat. His ideas were adopted in the US by Franklin D Roosevelt. As the Depression deepened following the failure of other economic policies Roosevelt reluctantly embraced Keynes' suggestions. "I came to the conclusion that the present-day problem calls for action both by the Government and by the people, that we suffer primarily from a failure of consumer demand because of lack of buying power. Therefore it is up to us to create an economic upturn," he said in an address to the American public. He would do this by making "additions to the purchasing power of the Nation," he added. The grand experiment worked almost exactly as Keynes had predicted and his idea became the cornerstone of US fiscal policy, with Richard Nixon proclaiming years later: "We are all Keynesians now".

By the close of World War II Keynes had become a key player in the formation of an international banking system. His general theories about managing free markets on a global scale are considered to be the foundation of macroeconomics. Keynes became heavily involved in setting up the Bretton Woods system of monetary management that was established when Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, in the US in 1944. The Bretton Woods agreement led to the establishment of the International Monetary Fund and the International Bank for Reconstruction and Development (IBRD). He died of a heart attack in 1946 aged 62.

Exercises

I. Translate the text and determine the grammar tense of the predicate in each sentence.

II. Make up five or six sentences to express in brief the contents of the text.

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