User talk:Rmuzorewa

John Maynard Keynes, 1883-1946. John Maynard Keynes is doubtlessly one the most important figures in the entire history of economics. He revolutionized economics with his classic book, The General Theory of Employment, Interest and Money (1936). This is generally regarded as probably the most influential social science treatise of the 20th Century, in that it quickly and permanently changed the way the world looked at the economy and the role of government in society. No other single book, before or since, has had quite such an impact. The son of the Cambridge economist and logician John Neville Keynes, John Maynard Keynes was bred in British elite institutions - Eton and then King's College Cambridge. In 1906, he entered the British civil service for a little while, and then returned to Cambridge in 1909. Three life-long connections were made during this time. Firstly, Keynes would remain a fellow of King's College, Cambridge. Secondly, he became the editor of the Economic Journal in 1911, a position he would hold almost until the end of his life. His first book on Indian currency (1913) was directly related to his experience at the India office. From 1914 to 1918, J.M.K. was called to the UK Treasury to assist with the financing of the British war economy. He excelled at his job and the influence he gained earned him a position with the British delegation to the Versailles Peace Conference in 1918. J.M.K was appalled at the vindictive nature of the peace settlement, and was particularly opposed to the devastating consequences of the heavy "reparations" payments imposed on Germany. He resigned from the conference and published his Economic Consequences of the Peace (1919), denouncing the Treaty of Versailles and bringing him into the public spotlight. After returning to Cambridge, Keynes published his Treatise on Probability (1921), where he dismantled the classical theory of probability and launched what has since become known as the "logical-relationist" theory of probability. Keynes's work caused something of a stir, arousing the young Cantabrigian logician, Frank P. Ramsey, to outline his own "subjective" theory of probability. In 1923, Keynes published his Tract on Monetary Reform (1923), which was his contribution to the Cambridge cash-balance theory of money, then being developed by other Cambridge economists, Alfred Marshall, Arthur C. Pigou and Dennis H. Robertson. It was also in a 1923 newspaper article that he first proposed his "normal backwardation" theory of hedging and speculation. Throughout the 1920s, Keynes remained active in public policy debates, channeled mainly through his numerous articles in the Nation and Atheneum, a Liberal-Labour weekly magazine which he helped purchase in 1923 (it was absorbed by the New Statesman in 1931). The best of Keynes public policy writings was collected in his Essays in Persuasion (1931). He was on the forefront of the battle against returning Britain to the gold standard on a pre-war parity (e.g. 1925). This led him to author two famous pieces in condemnation of laissez-faire economic policy (1925,1926). In 1929, he wrote an election pamphlet with Hubert D. Henderson advocating the use of public works to reduce unemployment and condemning the Treasury's fear of "budget deficits". In 1929, he also entered into a small debate with Bertil Ohlin and Jacques Rueff on German reparations problem. He also found time to marry the Russian ballerina, Lydia Lopokova in 1925. In 1930, John Maynard Keynes brought out his heavy, two-volume Treatise on Money, which effectively set out his Wicksellian theory of the credit cycle. The Treatise also led to the formation of a reading group, known as "the Circus", composed of the young Cambridge economists Richard Kahn, Joan Robinson, Austin Robinson, James Meade and Piero Sraffa. Kahn dutifully delivered reports of the Circus's discussions to Keynes, who subsequently began revising his ideas. One resulting criticism of the Treatise was that it failed to provide a theory of the determination of output and employment as a whole -- a particular pertinent question given the huge amount of unemployment at the time. In early 1936, the new book finally came out with the pretentious title of The General Theory of Employment, Interest and Money. Heavily anticipated, cheaply priced and propitiously timed for a world caught in the grips of the Great Depression, the General Theory made a splash in both academic and political circles. With the General Theory, as it became known, Keynes sought to develop an theory that could explain the determination of aggregate output - and as a consequence, employment. He posited that the determining factor to be aggregate demand. Among the revolutionary concepts initiated by Keynes was the concept of a demand-determined equilibrium wherein unemployment is possible, the ineffectiveness of price flexibility to cure unemployment, a unique theory of money based on "liquidity preference", the introduction of radical uncertainty and expectations, the marginal efficiency of investment schedule breaking Say's Law (and thus reversing the savings-investment causation), the possibility of using government fiscal and monetary policy to help eliminate recessions and control economic booms. Indeed, with this book, he almost single-handedly constructed the fundamental relationships and ideas behind what became known as "macroeconomics".