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The Most Influential Economist of the 20th Century

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The Most Influential Economist of the 20th Century

In the history of economics, John Maynard Keynes is of the most influential people. He strongly influenced the economy and became widely recognized while he was still alive. The man who 75 years ago wrote an essay "The Economic Possibilities for our Grand Children" brought very important issues to our attention. Keynes wondered what kind of world our children would live in, and what sort of tools would they need to succeed and be happy. So what do we know about this extraordinary man, and how did his economic views change our lives?

In order to know why Keynes was a successful economist, it is important to know where he came from. John Maynard Keynes was born June 5, 1883 in Cambridge England. His father was an economist and a lecturer at the University of Cambridge, and his mother was a local social reformer. With the assistance and coaching of his parents, Keynes was successful throughout his time in school. Many people were not surprised that Keynes became an economist since his father was a professor of economics. He was good at managing his own finances. His investments with foreign money made him a wealthy man. This allowed him to sponsor the classic ballet along with his Russian wife, a classic ballet dancer.

In Grossak's (1978) article he explains how Keynes did not plan on becoming an economist. He did not study economics until his senior year at college, and although his professors encouraged him to continue on with economics he chose a job in civil service. Keynes felt that when it came to economic theory, there was nothing more to be taught. (Grossak's, 1978) Keynes took the civil service exam in 1906, and he did not receive a top score. Ironically, math and economics were his low scores. Because of his scores he was forced to take


a job in India. (Grossak's, 1978) He had very little to do there, and began writing on the economic conditions in India. Keynes always had a strong interest in economics, and when a job opened up teaching at his old college in 1909 he took it. He was very successful, and was even offered the editorship of the economic journal. He would keep this position throughout his life (Grossak's, 1978).

According to Grossak's (1978) article, Keynes decided to make money and venture off on his own. He did not want to go back to teaching because of the low pay and long hours, so he became a speculator in foreign exchange (Grossak's, 1978). Keynes made a good living for himself, and enjoyed the independence. Keynes always stayed loyal to the liberal party, and the money he made afforded him the opportunity to help them out. He would conduct seminars for the liberal party, and also pumped money into the failing liberal weekly, the Nation (Grossak's 1978). He was made chairman of the Nation, and also became a columnist for many other American and British Newspapers (Grossak's 1978).

Although Keynes was making money and enjoying his independence, his true passion was economics. He enjoyed writing about economics, and in 1923 he published "a Tract on Monetary Reform". Keynes took notice of the severe inflation during 1919-1920, and the severe deflation and depression from 1921-1922 (Grossak's 1978). Keynes was very concerned with inflation and its effect on the economies of democratic nations. Keynes felt since there were more debtors than lenders in democratic nations, inflation was politically popular (Grossak's 1978). Keynes continued to write about inflation, deflation, and unemployment for the next few years.


Keynes was frustrated with the beliefs of many political leaders in England and decided to travel to the United States to meet with Franklin D. Roosevelt in 1932 (Grossak's 1978). This meeting motivated him to write a new book, "The General Theory of Employment, Interest, and Money". The book was published in 1936 and was met by heavy criticism by older economists (Grossak's 1978). Many people disagree with the exact meaning of the "General Theory" but Patinkin, (1993) describes it very well. He explain that the theoretical novelty of the book is its theory of effective demand cum equilibrating role of changes in output; that is, a theory of aggregate demand and supply for output in which changes in the level of output themselves act as the equilibrating force that brings the economy to an equilibrium level of output, which need not be one of full employment (Patinkin, 1993). One of Keynes primary arguments in the General Theory is about unemployment. He argues that just because somebody



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