John Maynard Keynes Essay

At the height of the crisis, the fledgling Labour government was told by Treasury officials that the government must balance the budget to survive the depression.This effectively meant increasing taxes and cutting unemployment benefits.He was one of the architects of the Bretton Woods system, until his untimely death in April 1946 brought a premature end to his involvement.

He loved ballet and married a famous Russian ballerina Lydia Lopokova.During the complex negotiations, he found time to pick up some French masterpieces including a Cezanne, at knock down prices.However, it was Versailles, which helped establish his reputation as an outstanding economist.It is said that his morning would begin by scanning the newspaper, from which he would make various investment decisions on the foreign exchange markets; often making a fortune from an hour's work.However, he did fail to predict the Stock Market crash of 1929; he lost a fortune, which he later recouped.On one occasion he bought a lot of Spanish Pesetas, only to declare he would soon sell them and break the market - something he succeeded in doing.After the war, Keynes was part of the British delegation to the Versailles Peace Treaty.Quite a dense work, it still broke the mould of classical economics and created a powerful argument for active demand management.ALthough, his theories were later criticised by Monetarists, much of his thought remain key elements of modern economic theory. He would say things like:"The government should pay people to dig holes in the ground and then fill them up."People would reply.The Economic Consequences of the Peace proved remarkably prophetic and helped establish his reputation as an independent thinker who could see beyond the orthodoxy of the day.Speaking on Georges Clemenceau the French PM, he didn't mince his words30 years later, Keynes, found himself as part of the British delegation securing another post war economic settlement; however, this settlement was to be of a very different nature.

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