THE FIGHT OF A ‘CITIZEN ECONOMIST’ FOR PEACE AND PROSPERITY: KEYNES AND THE ISSUES OF INTERNATIONAL SECURITY

Abstract

John Maynard Keynes was a citizen economist, anxious to defend a capitalist system threatened by the rise of totalitarianism during the inter‐war period. His criticism of the Versailles treaty in 1919 was supported by the idea of a link between economic prosperity and international peace. During the crisis of the 1930s, he advocated using the League of Nations for a peaceful settlement of international conflicts; while being in favour of economic interventionism, he criticised mercantilist policies. He recognised that military expenditure may be used as a reflationary policy, but after 1945 his theory was misused to promote the development of a ‘defence‐based’ economic policy.

Keywords:

• Keynes
• Citizen economist
• League of Nations

JEL Codes:

• B2
• B31

Notes

¹ The New Statesman and Nation, 8–15 July 1933, Collected Writings, Volume 21: 237.

² Keynes considers that it is necessary to change values and analyses established in the 19th century (Collected Writings, Volume 21: 233). If the international division of labour was justified for a while by the importance for the global production of the differences of climates and resources between the different countries, it is no longer necessary since the means of production as well as the needs have evolved and nowadays all countries can potentially produce all manufactured goods and almost all foods (Collected Writings, Volume 21: 238).

³ The Nation and Athenaeum, 9 August 1924, Volume 19: 277.

⁴ To the Editor of the Manchester Guardian, 14 August 1930, Collected Writings, Volume 20: 386.

⁵ Letter to Sir Arnold Overton, 3 February 1943, Collected Writings, Volume 26: 261.

⁶ The Economic Journal, September 1938, Collected Writings, Volume 21: 463.

⁷ The Economic Journal, September 1938, Collected Writings, Volume 21: 339.

⁸ February 1921, Collected Writings, Volume 17: 241.

⁹ The Manchester Guardian Commercial, 4 January 1923, Collected Writings, Volume 17: 450.

¹⁰ The New Statesman and Nation, 10 July 1937, Collected Writings, Volume 28: 61.

¹¹ The New Statesman and Nation, 25 March 1938, Collected Writings, Volume 28: 102.

¹² The Nation and Athenaeum, 8–15 March 1930, Collected Writings, Volume 20: 332.

¹³ The New Statesman and Nation, 28 September 1935, Collected Writings, Volume 21: 370.

¹⁴ Talks on Commercial Policy, June 1944, Collected Writings, Volume 26: 306.

¹⁵ The New Statesman and Nation, 8/15 July 1933, Collected Writings, Volume 21: 244.

¹⁶ The Macmillan Committee, Committee on Finance and Industry, 7 March 1930, Collected Writings, Volume 20: 154.

¹⁷ The Times, 13 September 1938, Collected Writings, Volume 21: 481.

¹⁸ The Economic Journal, September 1915, Collected Writings, Volume 11: 340.

¹⁹ The Nation and Athenaeum, 24 November–1 December 1923, Collected Writings, Volume 19: 147.

²⁰ The Manchester Guardian, 26–27 April 1921, Collected Writings, Volume 17: 230.

²¹ The Macmillan Committee, Committee on Finance and Industry, 7 March 1930, Collected Writings, Volume 20: 154.

²² Memorandum by the Treasury on the Indemnity Payable by the Enemy Powers for Reparation and other Claims, 1918, Collected Writings, Volume 16: 380.

²³ Sunday Times, 18 September 1921, Collected Writings, Volume 17: 272; Manchester Guardian, 24 April 1922, Collected Writings, Volume 17: 398.

²⁴ Scheme for the rehabilitation of European credit and for financing relief and reconstruction, 1919, Collected Writings, Volume 16: 429.

²⁵ Sunday Times, 18 September 1921, Collected Writings, Volume 17: 272.

²⁶ Macmillan Committee, Committee on Finance and Industry, 7 March 1930, Collected Writings, Volume 20: 154.

²⁷ The Listener, 14 June 1933, Collected Writings, Volume 21: 257.

²⁸ Draft for House of Lords on 24 February 1943, Collected Writings, Volume 27: 261.

²⁹ ‘Americans had in fact been discussing fiscal stabilisation policy from the early 1920s onwards, with its advocates during that decade including such major figures as Wesley C. Mitchell of Columbia and Allyn Young of Harvard’, notes Laidler (2001: 19).

³⁰ ‘The key to the institutionalisation of the new paradigm was the shock of war – the decisive factor in forcing the [British] Treasury radically to reappraise its ideas on economic policy’ (Oliver and Pemberton, 2004: 9).

³¹ The United States and the Keynes Plan, The New Republic, 29 July 1940, Collected Writings, Volume 22: 149.

³² Joan Robinson first used this term in her review of Harry Johnson's Money, Trade and Economic Growth (The Economic Journal, September 1962).

³³ Such an economic strategy fails to engage the economy into a long‐term sustainable growth; it also increases the risks of conflicts resulting from a world in arms, strengthening the Cold War and engendering several wars – remarked Robinson (1985: 167).

³⁴ Policy of Government Storage of Foodstuffs and Raw Materials, The Economic Journal, September 1938, Collected Writings, Volume 21: 463.

³⁵ P. Krugman, W Scenario, The New York Times, 22 February 2002.