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bonds which would not be available for redemption until after the war. Then, just when consumer buying would again be needed, the savings certificates could be cashed.
Compulsory saving—what a change from his earlier efforts to achieve a kind of compulsory investment. But the change was in the times and not in Keynes' thinking. The old problem had been too little investment and its symptom had been unemployment. The new problem was too much investment—an all-out armament effort—and its symptom was inflation. But the framework of "The General Theory” was as useful in understanding inflation as it had been in understanding inflation's opposite-unemployment. Only it was upside down. Now more and more incomes were being handed out with each turn of the wheel, instead of less and less. Now savings were far short of what was needed to balance out the flow of income, instead of being embarrassingly large.
Accordingly, the cure was the opposite of the depression tonic. Then Keynes had urged that investment be bolstered by every possible means; now he urged that savings must be increased.
The point is important because many have mistakenly judged Keynes as an economist who favored inflation. He did favor" "reflation" (a pumping up of incomes and not prices) from the depths of the depression. But to think that he favored inflation for inflation's sake was to disregard such a passage as this from “The Economic Consequences of the Peace”:
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuir process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily *** Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
But despite its logic and its appeal-Keynes made much of the fact that his deferred savings plan would serve to widen the distribution of wealth by making everyone an owner of Government bonds—the plan failed to arouse much support. It was too new; the old methods of taxation and rationing and voluntary savings drives were tried and trusty weapons of war finance. A deferred credit scheme was tacked on as an ornamental flourish but it was never given the central place Keynes had envisaged for it.
But he had no time to lament its cool reception; he was now fully embroiled in the British war effort. In 1941 he flew via Lisbon to the United States. It was to be the first of six such trips; Lydia went with him as his nurse and guardian. Ever since his first heart attack she had assumed the role of timekeeper for her indefatigable husband and many a dignitary had been politely but firmly ushered out at the expiration of his allotted stay. “Time, gentlemen,” said Lydia, and business stopped.
His trips to the United States involved the precarious problems of Britain's war finance and the overhanging question of what was to happen in the terrible postwar interim. Britain was not the only one concerned; the United States, as well, wanted to lay the foundation for a flow of international trade which would avoid the desperate financial warfare which had already led to physical warfare. An International Bank and an International Monetary Fund were to be established which would act as guardians of the international flow of money; in place of the old dog-eat-dog world where each nation sought to undercut everyone else, there would be a new cooperative effort to help out a nation which found itself in monetary difficulties.
The final conference was held at Bretton Woods. Keynes, despite his illness and fatigue, clearly dominated the conference; not when it came to winning all his points, for the final plan was far closer to the American proposals than to the British, but by virtue of his personality. One of the delegates gives us an insight into the man in this entry in his journal:
This evening, I participated in a particularly recherché celebration. Today is the 500th anniversary of the concordat between King's College, Cambridge, and New College, Oxford, and to commemorate the occasion, Keynes gave a small banquet in his room * * * Keynes, who had been looking forward to the event for weeks as excitedly as a schoolboy, was at his most charming. He delivered an exquisite allocution. * * * It was an interesting example of the curiously complex nature of this extraordinary man. So radical in outlook in matters purely intellectual, in matters of culture, he is a true Burkean conservative. It was all very pianissimo, as befitting the occasion, but his emotion when he spoke of our debt to the past was truly moving.
When Keynes made his final speech at the conclusion of the conference__"If we can continue in a larger task, as we have begun in this limited task, there is hope for the world"—the delegates rose and cheered him.
As always, his major efforts did not preclude a few minor ones. He was made a director of the Bank of England (“which will make an honest woman of the other is anyone's guess," he had declared) and chairman of a new committee on the music and arts which had been established, like the English universities, under the aegis of the Gov. ernment. Thus, while he was carrying the weight of presenting Britain's point of view to an international economic council, he was also keeping up a stream of correspondence on music travelers, the Vic Wells Ballet, poetry reading, and library exhibits. And of course he kept on collecting; he scooped the Folger Library on a rare volume of Spenser and explained a little guiltily to the librarian that he had used the Foreign Office bag to have the catalog sent over to him.
And the honors started to pour in. He was elevated to the peerage: he was now Lord Keynes, Baron of Tilton, an estate which he had bought in middle life only to discover to his delight that one of the branches of the Keynes line had once owned these lands. There were honorary degrees to be accepted at Edinburgh, at the Sorbonne, and from his own university. There was an appointment to the board of trustees of the national gallery. And still there was work: the first loan to Britain had to be negotiated and Keynes, of course, was given the task of presenting Britain's view point. When he returned from that trip and a reporter asked him if it were true that England was now to be the 49th State, Keynes' reply was succinct: “No such luck."
In 1946 the ordeal was over. He went back to Sussex to read and relax and prepare for a resumption of teaching at Cambridge. One morning there was a fit of coughing; Lydia flew to his side; he was dead.
The services were held in Westminster Abbey. His father, John Neville Keynes, aged 93, and his mother, Florence, walked up the
aisle. For all their sorrow, few parents could have wished for more in a son. The country mourned the loss of a great leader, gone just at a time when his acumen and wisdom were most needed; as the Times said in a lengthy obituary on April 22, “By his death the country has lost a great Englishman.
a He was not an angel by any means. This most sparkling of the great economists was only a human being, albeit a remarkable one, with all the faults and foibles of any person. He could win 22 pounds from two countesses and a duke at bridge and crow delightedly; he could also undertip a bootblack in Algiers and refuse to rectify his error saying, of all things, “I will not be a party to debasing the currency.” He could be extraordinarily kind to a slow-thinking student (economists, he said, should be humble, like dentists) and obnoxiously cutting to a businessman or high official to whom he happened to take an intuitive dislike. Sir Harry Goshen, the chairman of the National Provincial Bank, once rubbed Keynes wrong by urging that "we let matters take their natural course.” Keynes replied “Is it more appropriate to smile or rage at these artless sentiments? Best of all, perhaps, to let Sir Harry take his natural course.”
Keynes himself gave the clue to his own genius-although he was not at the time writing about himself. Discussing his old teacher Alfred Marshall (whom he both loved and rather lovingly derided as “an absurd old man”), Keynes spelled out the qualifications for an economist:
The study of economics does not seem to require any specialized gifts of an unusually high order. Is it not, intellectually regarded, a very easy subject compared with the higher branches of philosophy or pure science?
An easy subject, at which very few excel. The paradox finds its explanation, perhaps, in that the master economist must possess a rare combination of gifts. He must be mathematician, historian, statesman, philosopher-in some degree. He must understand symbols and speak in words. He must contemplate the particular in terms of the general, and touch abstract and concrete in the same flight of thought. He must study the present in the light of the past for the purposes of the future. No part of man's nature or his institutions must lie entirely outside his regard. He must be purposeful and disinterested in a simultaneous mood; as aloof and incorruptible as an artist, yet sometimes as near the earth as a politician.
Marshall—as Keynes says-only approximated that ideal, for Victorian that he was, his economics lacked the necessary iconoclasm to give it deep social penetration. Keynes came closer: the Bloomsbury attitude of “nothing sacred” spilled over into the sacred precincts of economic orthodoxy; once again the world was put into focus by a man not so blind as to fail to see its sickness, and not so emotionally and intellectually dispossessed as to wish not to cure it. If he was an economic sophisticate, he was politically devout, and it is in this curious combination of an engineering mind and a hopeful heart that his greatness lies.