About

Born in 1883, Keynes grew up in a cultured and intellectual environment and excelled in academics. He began his career in the Civil Service but soon shifted his focus to economics, publishing influential works on monetary theory and government intervention during economic downturns. Keynesian economics, as his economic theory came to be known, challenged the prevailing economic orthodoxy of classical liberalism. Keynes argued that when an economy is faced with high unemployment and low demand, traditional market forces may not effectively bring it back to equilibrium. In such situations, Keynes believed that the government should intervene through fiscal policies, such as increased public spending and tax cuts, to stimulate demand and encourage economic growth. Keynes' most famous work, "The General Theory of Employment, Interest and Money," published in 1936, revolutionized economic thought. He advocated for a mixed economy, where free market forces determine the allocation of resources, but the government plays an active role in stabilizing the economy. During the Great Depression, Keynes' ideas gained significant support, and many governments implemented his policies to combat the economic crisis. His theories also influenced the establishment of international economic institutions after World War II, including the International Monetary Fund (IMF) and the World Bank. While Keynes' ideas enjoyed widespread acceptance during the mid-20th century, they faced criticism from the resurgence of free-market neoliberalism in the 1980s. Many economists argued for reduced government intervention and embraced monetarism, which emphasizes controlling inflation through interest rate adjustments. Despite the ebb and flow of popularity, Keynes' ideas continue to shape economic debates and policies worldwide. His emphasis on the role of effective demand and proactive government action laid the foundation for macroeconomic management and the understanding of economic fluctuations. Today, governments often implement Keynesian policies during economic downturns to stimulate growth and stabilize their economies.