• Review of The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes, by Zachary D. Carter.1
Why should someone write another biography of Keynes? Major biographies of John Maynard Keynes (not merely books on Keynes and Keynesianism, of which the supply is far larger) include the 1951 Life of John Maynard Keynes by Roy Harrod; the 1992 Maynard Keynes: An Economist’s Biography by Donald Moggridge, and the multi-volume biography by Robert Skidelsky, who happily gave us also Keynes: A Very Short Introduction for Oxford University Press. But this hardly exhausts the number of Keynes’s biographies. On the top of that, Keynes is also part of the narrative in books like Nicholas Wapshott’s Keynes Hayek: The Clash That Defined Modern Economics and, of course, a necessary character in any work on the Bloomsbury Group.

Yet the question “why should someone write another biography of Keynes” has a very clear answer: because Keynes had a tremendously interesting life, unmatched among economists before and after him. Zachary D. Carter is a talented writer, a journalist from the Huffington Post, and his biography of Keynes is thoroughly enjoyable. He has considerable sympathy for his subject and doesn’t hide it. While Carter is hardly parsimonious with details of Keynes’s personal life, his book is never petty or gossipy. The biographer knows he stands in front of a genuinely great man, and he treats him as such.

The Price of Peace: Money, Democracy and the Life of John Maynard Keynes is a pleasure to read. But the more you read it, the more you are forced to consider another possible answer to the question of why anybody should write another life of Keynes. It is that Carter, a man of the left, thought such a biography was needed in the face of the mishmash of public policies we have seen in the last few years? Some of them bore the mark of Keynesianism (indeed, “both the Bush and Obama administrations used Keynesian tools to mitigate the disaster that began to unfold in 2008,” [525]), but “the American commitment to Keynesian stimulus after the crash was inconstant.”

For Carter, “after nearly a century on trial,” Keynesianism “has not embarrassed itself, but neither has it been vindicated” (530). In particular, he sees the recent history of both the United States and the United Kingdom as “mixing Keynesian disaster management—bailouts and stimulus programs—with the aristocratic deregulatory [sic] agenda of Hayekian neoliberalism” (531). Carter cannot escape the impression that such policies were tailored to the needs of the moneyed elites—but never was Keynes more at ease than when surrounded by grandees. At a dinner party in honour of Queen Mary of Romania, the Spanish king Alfonso XIII “said that of everyone I [Keynes] was the person in London he wanted to speak with, and that he read my books with greatest care” (146). If it is easy to picture the king glancing through Keynes’s 1919 The Economic Consequences of the Peace, one cannot but sympathize with him struggling with Keynes’s 1921 A Treatise on Probability. Sadly, Mr Carter does not report whether Keynes quizzed the king on his support for the 1923 putsch by Miguel Primo de Rivera. However, we learn that “he was embarrassed when Lydia relayed such events to friends.”

The picture of the great economist rebuking his wife because such “boasting” was better kept “internal” between the two, is a telling one. There is something childish, and therefore admirable, in Carter’s Keynes. You can picture him leaving behind the dusty, academic environment in which he was raised, and truly having fun at his first fox hunt. He aspired to a life surrounded by art and beauty, free of the conventions of traditional morality. Like many intellectuals, he was a runaway son of the bourgeoisie.

But he was also a man who “savored tradition and contemplation” (3), of the sort easily enjoyed in his hometown of Cambridge, where he was educated and where he was a fellow at King’s College (whose assets he also managed). Yet Keynes was inexorably attracted to public affairs. Appetite comes with eating. Mr. Carter suggests that Keynes was directly involved in government policy until the Paris conference. Then he left government and published The Economic Consequences of Peace, a strong indictment of the decisions taken at the Paris conference, written with “a biting mockery” that was “directly influenced by the ironic prose of the Eminent Victorians,” written by his friend Lytton Strachey. (Keynes admired Strachey so much that he “could imagine no better way to demonstrate his own excellence than to win a lover [Duncan Grant] away from the man he most admired” 30]. The wonders of friendship!).

The Economic Consequences of Peace proved Keynes more an ingenious writer (thanks to Strachey’s example) than anything else, for “it was not the power of Keynes’s argument that propelled the book to such wild success. It was the vicious, detailed personal portraits of the Great Men he lambasted” (106). Soon enough, Keynes found himself at the forefront of public opinion. At first, he did not like it because he considered “the art of public persuasion” as “too close to politics and propaganda to be the proper endeavour” for a member of the Bloomsbury set. But to cover the 1922 Genoa Economic and Financial Conference he was paid “$45,000 in today’s money, a better rate word-for-word than even the windfall he had received from his international bestseller” (125). In a few years he became a publisher himself by buying, with a consortium of investors, The Nation and Athenaeum, later to be absorbed into the New Statesman. In this period Keynes learned to play the keyboard of the public debate, writing with clarity and panache. This was the period in which he abandoned whatever faith he had in free trade and the market economy. Now a married man (by all accounts, happily), Keynes’s desire to do away with Victorian values moved from sexuality to thrift. “In 1919, he had viewed thrift and abstinence as Victorian virtues that enabled the creation of capital hoards that could be invested in great projects. By 1930, he recognized that—as with other Victorian pruderies—too much thrift could take the fun out of life” (192), writes Carter.

In the sterling crisis of 1931 (which Carter blames on the “austerians”), Keynes thought he built a considerable reputation as a Cassandra (215). Still, he was not happy with it: he thought he did not succeed “in convincing either the expert or the ordinary man” (219). Carter points out that in those years Keynes “fashioned an extraordinary career for himself… economic ideas, he maintained, were not really that complex; people were simply intimidated by the technical jargon financiers deployed and by the prestige of their affluent personas” (221). “Keynes had built quite an audience as a man of letters, but the audience had not moved its leaders” (221). Hence, “Keynes decided to become a mystic himself. He changed the way he described economic problems. No longer were financial dilemmas simple matters with easy solutions anyone could understand. They were hard, complex—the territory of brilliant gladiator-intellectuals questing after great truth…. He cast himself not as a debunker of myths but as an economic Albert Einstein at work on the grand new theory that would revolutionize the old ways of thinking” (222). And so the General Theory was born.

“Keynes, Carter argues, knew how to make himself understood and had plenty of time to polish the new book: it is ‘difficult and obscure because he wanted it to be.'”

For Carter, the General Theory is a “masterpiece of social and political thought that belongs with the monuments left by Aristotle, Thomas Hobbes, Edmund Burke and Karl Marx” (256). Yet “much of it is nearly incomprehensible. Taken as a whole, it is very likely the worst-written book of its significance ever published in the English language.” Still, “bad writing can make a career in academia just as surely as exceptional writing can” (257). Keynes, Carter argues, knew how to make himself understood and had plenty of time to polish the new book: it is “difficult and obscure because he wanted it to be.”

In Carter’s book, a portrait of Keynes emerges as a man busy finding ways to steer nothing less than the world on the course he deems right, while staying behind the scenes and never entering the boxing ring of politics himself. That over-quoted sentence, “Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back,” comes to mind. This was, in fact, a prophecy based upon a lifelong experience. It was hard work: Keynes has no peer when it comes to an intellectual’s influence over policies. One would say: rightly so, as no other intellectual has ever tried as hard as he did. Carter’s point that the noticeable change in style between the 1920s essays which are crystal clear and witty, whether one likes them or not, and the General Theory was actually a matter of strategy is a fascinating one.

Carter’s Keynes would happily advise AOC [Alexandria Ocasio-Cortez, U.S. Representative, NY-14], were he to come back to life. Yet for all his mastery in impressing his views upon public opinion, one wonders if Keynes was not really naive (a word Mr. Carter sometimes uses to describe him) when it came to his forceful beliefs in the power of ideas. More precisely, one wonders if Keynes ever paused for a moment and, while pondering the best strategy for his words to be heard, considered instead that in politics your ideas tend to find the biggest resonance the more you say something politicians actually want to hear. That virtually the whole Western world converted to Keynesianism may have more to do with the fact that Keynes provided leeway to politicians and officials to grow their budgets, their power, and their spheres of influence, rather than attesting to the unquestionable virtues of the preacher.

Carter builds on a reading of Keynes’s motivations which is not new but that he presents without mincing words, and with renewed appeal for a new generation of political radicals.

He maintains that Keynes tried to achieve a “remarkable synthesis”: “how to make the practical, risk-averse, anti-revolutionary conservatism of Burke fit the radical democratic ideals advanced by Rousseau” (153). “Keynes was both embracing Rousseau’s conception of the state as an expression of democratic will and restating Edmund Burke’s emphasis on the power of culture and tradition” (549-550). Is such a reconciliation even conceivable?

To the radical Carter, Keynes was a “Burkean,” a conservative at heart who began his own life and scientific career believing more or less in the good old creed of economists, which included a certain reliance on markets and the price mechanism. Yet such a creed was shaken by his attendance at the Versailles conference in 1919. Keynes then realized the importance of politics and the fact there was no such thing as an economic realm truly independent of political influence.

In the 1920s, when Britain experienced economic havoc, and particularly after the Great Crash of 1929, he began to think big and boldly in terms of an increasing socialization of investments, not because he liked socialism (he did not) but because that was the only way to save not so much capitalism but social peace. The more time passed, the more he realized that “uncertainty about the future makes crowds prone to calamity in both finance and politics, particularly under conditions of significant anxiety” (267). Hence the need for macroeconomic management. Carter often associates Keynes with Burke: a successful Burke, who pulled the deficit trigger in order to keep the revolution at bay.

This story is not without its merits. Few of us realized that, when Keynes at first drifted away from free trade, his bohemian friends of the Bloomsbury group were quite shocked. It would be easy to place them, so to say, to the left of Keynes. “Maynard has become a Protectionist,” Virginia Woolf wrote to a friend in September 1930, “which horrified me so that I promptly fainted” (quoted on 202).

But it is also a story that is based upon a never questioned, overarching belief that “capitalism,” being inherently prone to devastating crises, ought to be balanced by government action. One wonders how can the great champion of socialization of investment ever have been considered the “savior of capitalism.” For what is left of a market economy if the government is set to become the investor of last resort?

Carter maintains that “it is appropriate for neoliberalism to take most of the blame for the political upheavals of the twenty-first century” as “the neoliberal faith in the power of financial markets bequeathed us the financial crisis of 2008” (531). This is certainly a popular thesis, but perhaps one should argue for it, rather than simply stating it.

The biggest shortcoming of his book is indeed that Carter, who also presents us with a lively picture of post-Keynes Keynesians, makes no effort to present in a cogent way ideas, or even people, he does not agree with. The chapter on conservative-libertarian reactions to Keynesianism is titled “The Aristocracy Strikes Back,” and not by chance.

Consider the way in which Carter describes the intellectual path taken by F.A. Hayek after World War II:

  • Hayek had spent the postwar years struggling to reconcile his enthusiasm for laissez-faire with some semblance of the New Deal nation-state. By 1962, he had been unable to come up with an elegant solution to the problem, and none of his attempts had generated anything like the public response that The Road to Serfdom almost two decades prior. The Constitution of Liberty, which Hayek regarded as his most important political statement, had flopped in 1960, the same year the election of John F. Kennedy seemed to doom once and for all the political viability of his [Hayek’s, not Kennedy’s] intellectual movement. As Hayek’s public celebrity subsided, Keynes’s ideas grew more influential and prestigious, and Hayek’s chief financial supporter in the intellectual resistance, Harold Luhnow, lost his mind. Exhausted and defeated, Hayek retreated from the American scene to the University of Freiburg, a medieval institution founded by the Habsburgs, where his academic output slowed considerably (459).

From Carter’s engaging prose, we should deduce that Hayek struggled to write other best sellers like The Road to Serfdom (he did not, or one would not understand why he published a book like The Sensory Order in 1952),2 that he stopped writing after The Constitution of Liberty (in fact, he wrote a trilogy of books in political theory, among many other things, in the 1970s!) and that his tastes and politics were such that, when he went back to Europe, he could not but land at a “medieval institution founded by the Habsburgs.” The reader will naturally think that this Hayek guy really belongs in that sinister-looking castle, the Springfield headquarters of the Republican Party!

Perhaps the problem here is that Carter’s key, though implicit, contention about Keynes is that “the style is the man.” So great were Keynes’s intellectual powers, so marvellous and sporty and gentlemanly his attitude toward life, that we should expect a reconciliation between his views and his persona. But not everybody wears his own ideas with the same ease with which he wears a bespoke suit.

Consider these comments on what Hayek and Keynes had in common:

  • Hayek and Keynes agreed that democracy… was a tool for achieving more important goals. They even agreed that the most critical function of democracy was its ability to produce a vibrant, elite culture. The value Keynes placed on Bloomsbury was in some respects very similar to Hayek’s appreciation for the old Viennese aristocracy. But to Keynes, nothing was lost in guiding all the world to Bloomsbury, while for Hayek, aristocracy was inherently exclusive: the whole point was that not everyone could be an aristocrat. And so where Keynes sought to democratize the comforts and privileges of the elites, Hayek hoped to reinforce the aristocracy’s social distance from the masses. What Hayek believed could be achieved only through inequality, Keynes believed could be accomplished through education. (349)

Really? Lots of pictures of Hayek are taken when he was puffing his pipe, invariably wearing a tie. Recorded interviews and memories of students and friends suggest he was a professor who kept students and younger folks at a distance, a tendency not uncommon among European academics even today. But Hayek’s entire theoretical edifice exalts liberty because it allows us to take advantage of other people’s ideas and skills. If he celebrated the entrepreneurs’ successes, it was because such successes resulted in access to more goods and services than ever before, for a wider population.

For more on these topics, see the EconTalk episode Nicholas Wapshott on Keynes and Hayek. See also “Keynes as Lucifer,” by Pedro Schwartz, Library of Economics and Liberty, Sep. 7, 2015; and Edmund Burke, Online Library of Liberty.

Carter is certainly right in pointing out that Keynes wanted to guide all the world to Bloomsbury, and Hayek did not. But that’s not because the latter wanted only a chosen few to enjoy beauty and the good things. It is because Hayek thought all people are different, and not everybody wants to be a member of the Bloomsbury set. The idea of raising everybody to the upper levels of culture may sound generous, but it is utterly paternalistic. Not all our fellow human beings prize the things intellectuals like. I think Mr. Carter is right in assuming Keynes never thought that other people, properly educated, could fail in appreciating the “good” things, but that is perhaps Keynes’s greatest fault. Surely it’d be great if everybody could live on caviar and champagne, but some people may just prefer a pint of beer and fish and chips, the present author included.


[1] Zachary D. Carter, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes. Random House, 2020.

[2] Elsewhere, Carter acknowledges that when Hayek wrote The Road to Serfdom “he had not expected the book to transform him into a cause célèbre among American businessmen” (381).

*Alberto Mingardi is Director General of the Italian free-market think tank, Istituto Bruno Leoni. He is also assistant professor of the history of political thought at IULM University in Milan and a Presidential Scholar in Political Theory at Chapman University. He is also an adjunct fellow at the Cato Institute.

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