By JOHN OWEN HAVARD
Review of The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes, by Zachary D. Carter
New York: Random House, 2020
“In the long run, we are all dead.” John Maynard Keynes’s remark has come down to us as a witticism: the kind of harsh truth spoken by the dismal science of economics. But in his splendid, at times sparkling intellectual biography, Zachary Carter restores its full meaning to view. In context, Keynes’s observation becomes a damning repudiation of laissez-faire economics: the callous disregard for individual lives that comes from trusting the swings of the market, or through the enforcement of punishing austerity. Keynes valued human flourishing, even if his pricing mechanisms had their limits. Above all, this searching book shows, he was attuned to the deep costs of economic failure and uneven renewal for individual nations and democracy as such.
The Price of Peace is a bracing, energizing read. Its core aim is to return Keynes’s life and thought to its context—although that word becomes more than usually inadequate in his case. As the preeminent public intellectual of his day and a figure of growing heft on the world stage, Keynes was instrumental in creating the intellectual, political, and economic context of his time. The Price of Peace whisks us through a series of critical episodes in which Keynes had quite staggering centrality to world affairs, from the Treaty of Versailles to the bankrolling of World War II. We see Keynes’s sway over FDR, his role in founding Britain’s NHS, his posthumous influence over JFK. Continuing his narrative down to the present, Carter in turn reveals how Keynes’s core insights were lost and betrayed, even as certain “Keynesian” orthodoxies took hold.
In episodes rendered with rich, fizzy detail, we see Keynes in at times antagonistic dialogue with his contemporaries (Lloyd George was a “goat-footed bard” from the “enchanted woods” (103)). The opening chapters track his rapid ascent from academic to public intellectual. Keynes made a surprising amount of money along the way, including from something like insider trading. But he resisted the orbit of the one percent to take his perch as the “High Priest” of an intellectual circle at the University of Cambridge. Its members included Joan Robinson, an accomplished theorist of competition and monopoly, who helped persuade him he was “orchestrating an earthquake.” As Robinson later quipped, one benefit of studying economics was to avoid being duped by economists. Keynes not only helped to establish economics as a modern discipline, in which his movement had, at least for a time, pride of place. He helped invent the modern economist, by cannily persuading governments on both sides of the Atlantic of the need for their expertise, in part by making his own findings appear “difficult and obscure” (257).
“Keynesian economics” has come to mean the use of deficit spending (including direct investment in public works) in tandem with monetary policy to stimulate national economies. But these tenets emerge in Carter’s book as part of a rich tapestry of thought, amounting to a dramatic rethinking of government. Beginning with his insights into the toll of reparations and rigid exchange rates in the wake of World War I, Keynes elaborated his worldview in pithy pamphlets and foreboding tomes, whose dense arguments Carter summarizes with remarkable lucidity. Keynes came to see money—which existed only as shared hopes secured by shifting norms, trickling through an ever-changing marketplace—as possessed of a kind of literary imagination, creating “narratives of economic possibility” as Carter puts it “like a film or a novel” (264). That culminated with The General Theory of Employment, Interest and Money: “one of the great works of Western letters,” Carter enthuses, “a masterpiece of social and political thought ... a theory of democracy and power, of psychology and historical change, a love letter to the power of ideas” (256).
For all the potency of his interventions, Keynes was no revolutionary. His preoccupation with high employment remained undergirded by a “Burkean” sense of stability. While Edmund Burke (Irish-born, not “Scottish” as Carter has it) was himself a dynamic theorist of socio-economic cohesion, both men resisted revolutionary breaks in favor of gradual improvement on the status quo ante. Where the state was capable of intervening, it certainly should. But Keynes’s “svelte rhetoric” (171) dodged the question of whether the state should take over the economy directly. He bluntly wrote of his “hate” for trade unions. A connoisseur who married a Russian ballerina, he was at some distance from the common man (and was not above the prejudices of his age, including antisemitism and admiration of the British Empire). Keynes supported the coal miners during the General Strike of 1926, as part of a general commitment to raising wages. But he had an aversion to labor politics and working-class organization. If Keynes had a common touch, it was limited to the world of rent boys and furtive gay hook-ups invoked by a handwritten list (hello “Young American near the British Museum”) reproduced here in facsimile (637).
Keynes’s snooty side was burnished by the Bloomsbury set. His bisexual antics were a good fit for this eccentric yet cosy world of artists and writers, where the talk of semen flowed as readily as champagne. Carter recovers his centrality to the circle of Lytton Strachey, the Woolfs, and the Bells, not least as a patron who helped bankroll its painters and small presses (and helped recover T.S. Eliot’s career when it was immured in the tomb of Lloyd’s Bank). The Bloomsbury connection, vividly restored here, infuses Keynes’s thought with urgency and idealism. Building upon the philosophy of G.E. Moore, Keynes had a core sense of the good life. Hoarding money for its own sake was revolting; one should live well, breeding life into the world. This mindset became an article of faith, fueling Keynes’s cruising, we might conjecture, as much as E.M. Forster’s queer intimacies.
As Jennifer Wicke has marvelously demonstrated, Woolf sweeps Clarissa Dalloway into a world shattered by war with an enchanting brio—“life; London; this moment of June”—seizing the moment, letting go of wariness and restraint, forging connection across classes. At the same time, Mrs Dalloway also mobilizes the kind of cautiously restored confidence necessary to get the economy rolling after lockdown. Not for nothing does Woolf’s novel commence with a shopping trip. Keynes’s view of market activity, as Wicke posits and Carter confirms, was as fluid and ductile as the “blooming, buzzing, dispersed and displaced” movements of consciousness captured, as though in a gossamer net, by Woolf’s narration.
That fluidity made room for change. The power of vested interests, Keynes maintained, was “vastly exaggerated” (274) compared with the gradual encroachment of ideas. The world was destined to follow some economic notions, however bogus or hoary. And the ideas driving Keynes’s economic thought were vibrant, holding that “undirected commercial life was making the world an ugly, depleted place to live in” (172). Bloomsbury offered an alternative, but also a roadmap, or at least some garden paths, for getting there. Keynes wrote with a kind of visionary fervor about beautiful public squares and brilliant schools; in the wake of 1945, he supported the creation of community theaters and helped found the Arts Council, alongside a more precious interest in restoring the Royal Opera House (“acquiring fabric for the lampshades” Carter deadpans “was especially vexing” (367)). He wrote of the need for coordinated action to keep the “gifts” of artists alive in times of duress.
But for all his speculations about outliving capitalism—and being free, at least in the long run, to develop authentic, fully human ways of living—this was not a crypto-Communism. In the short term, Keynes imagined a sharp-edged capitalism giving way to something nicer: less Marx than Marks and Spencer. He described a world of neat public gardens, parks, and playgrounds. But his vision resembled the picture-book world of the recent Paddington movies more than the utopia of William Morris, in which industrial capitalism gives way to a sharing economy based around fulfilling craft work. Morris spelled out how socialism would organize labor and exchange, even if he failed to fully cost out how we would all have his beautifully stenciled wallpaper. Keynes wrote about people working less in the future, but this was necessarily a hazier picture. (Would there be washing machines? Who would make all the nice things?) If he was a “Champagne Socialist,” then he was the kind who thought everyone should live wonderful lives, eventually, but could be happy they had a job in the meantime.
Keynes was at most a semi-Socialist, favoring a liberal socialism. He had no truck with revolution. In response to the Spanish Civil War, he alluded to his own remarks: in the long run we were all dead, but it was a “great advantage of ‘the short run’ that in the short run we are still alive” (282). If the world was at peace, that was something. The task was not of “transmuting” but “managing” human nature (271). The right ideas would burrow their way into the status quo and make things better. And as Carter reminds us, Keynes’s ideas quite radically overturned accepted notions, including hard-won beliefs in the value of honest toil. Improving society did not necessarily require virtuous or even useful work; we could prosper by working less. This was no visionary utopianism, but it was not more of the same either. At its best, it sounds like change we can believe in. In its more out-of-touch moments, it might help to explain why Jeremy Corbyn and Bernie Sanders have time to work on their gardens.
The Price of Peace is a taut, vigorous read, without a flat sentence or a dull moment. We begin in medias res with Keynes hopping a motorcycle ride from Cambridge to London. Dispensing with the plod through his early years has clear merits. Keynes does not exactly develop new layers as the book goes on, but he is a fount of continued revelations, from insights into Babylonian state economics to ideas for a new international currency. If the man himself becomes tricky to get a handle on, that is altogether apt for a mind Carter compares to Newton. The book as a whole is richly populated with a veritable Sgt. Pepper’s album cover of colorful character sketches. The Price of Peace in turn poses probing questions about what biography means and does. If we study a life for the impact it makes, Carter implicitly argues, such influence should factor into the telling of the life. Keynes died of a sudden heart attack in 1946. In the short run, he was dead. But the postwar years began to unfurl his legacy—and saw its undoing.
Visiting Germany in the early 1930s, Keynes was chilled to see acrid resentment of the kind he feared in the wake of World War I. He was on the right side of history. But he later found himself on the other side of a growing dispute. As the book turns to intellectual legacy, Austrian-born aristocrat Friedrich Hayek emerges as a foil. Keynes’s own ideas were carried forward by protégés from the New Deal bureaucracy. But Hayek’s arguments against the state became the cause célèbre of zealous ideologues. With the help of McCarthyite red-baiting, they got a firm foothold in the economics profession. Keynes’s ideas now contended with a growing neoliberal orthodoxy, with its core absence of ideas beyond defending markets in the service of a vacuous “freedom.” JFK brought celebrated Keynesians into the political elite. But the embrace of deficit spending soon became “a fig leaf for the conservative yearning for lower taxes” (437).
By the end of the 1960s, Keynesian economics had become “a dry and technocratic field divorced from the philosophical ideas of its namesake” (451). Textbooks watered down his ideas. John Kenneth Galbraith, the celebrity economist who becomes an avatar of later chapters, lamented the hold of “reactionary Keynesianism” (452). “I am not sure,” he told Kennedy, “what the advantage is in having a few more dollars to spend if…the water [is] too polluted to drink, the commuters are losing out on the struggle to get in and out of the cities, the streets are filthy, and the schools so bad that the young, perhaps wisely, stay away” (438). Robinson was equally scathing: “Where is the pricing system that offers the consumer a fair choice between air to breathe and motor cars to drive about in?” (455). As fuel to the Cold War and a font of ecological destruction, the Keynesian revolution, she lamented, was not a “great intellectual triumph” but “a tragedy” (456). In the 1990s, Bill Clinton gave in to the exact opposite of what Keynes had prescribed, “subjugating both the governing agenda of American democracy and the direction of global economic development to the currents of international capital markets” (492). Keynes may have won the battle for deficit spending. But neoliberalism had won the war.
The Price of Peace has become urgently, painfully relevant. Keynes’s thinking about money hums with renewed significance in the age of Bitcoin and Modern Monetary Theory. But his insight into the toll of austerity and the political tumult fueled by unstable employment now carries the sharpest bite. In ways that would have been unthinkable six months ago, the ravaged world of the early twentieth century now finds echoes, however dim, in our own (death; Covid; this moment of August). Stimulus checks and furlough pay vindicate Keynes’s core premises. Swelling deficits will see the familiar fault-lines of a debate that, Carter reminds us, did not need to become one. But The Price of Peace is too intelligent to let us ask what Keynes would do. Like the best economists, he professed complete ignorance about the future. And the book’s gift is to let us see the true Keynesian interventions as radical innovations that reclaim the levers of our economy, or invent new ones. Not just a few more bank holidays, but four-day weeks. Not just universal healthcare, but Universal Basic Incomes. Not just bailouts for businesses, but letting New York print its own money, say, or canceling debts, or guaranteed green jobs…
Recent crises, on top of the climate emergency, pose a fundamental challenge back to Keynes. For some, the priority is not getting the same economy back up-and-running again. What if this pause, with its somnolent streets and smogless skies, gave us the opportunity to rethink the toll of relentless growth on our lives and on the planet? Keynes offered the world ways to get back to work, based on his understanding of what maintained peace. You can take that to the bank. But calls for justice, including the economic justice prioritized by Keynes, also need to disturb the peace. He may have less to say about reimagining a world in which some lives continue not to matter, where the slow death already burning through vulnerable communities has ignited into a raging flame.
In Mrs Dalloway, a character on his way to a party hears an ambulance siren that loops him into the hidden suffering of a tortured World War I veteran. Woolf’s novel embroiders the worlds of its characters into a shared, humming, delicate whole. We could call that London, or life, but we might equally call it an economy: an organization of relations that binds us to each other and that we may try our best to shape and reimagine in the face of recent and impending disaster. This marvelous book returns to view the “spirit of radical optimism” that infused Keynes’s worldview: a capacious, if bounded, sense of possibility that inspired and animated his thinking. There is no such thing as the economy, Keynes reminds us, beyond what—and how—we choose to value. In the long run, we are all dead. The world that we build in the meantime is up to us.
Posted on 19 August 2020
JOHN HAVARD is Associate Professor of English at SUNY Binghamton. He is author of Disaffected Parties: Political Estrangement and the Making of English Literature, 1760-1830 (Oxford, 2019).
