‘They Mean us no Harm’
- John Maynard Keynes: Vol. III: Fighting for Britain 1937-46 by Robert Skidelsky
Macmillan, 580 pp, £25.00, November 2000, ISBN 0 333 60456 3
Robert Skidelsky’s John Maynard Keynes: Fighting for Britain completes a remarkable biography. No other biographer of Keynes is likely to surpass it, and everyone who has an interest in the intellectual and public life of this country is in Skidelsky’s debt. This third volume starts in 1937, where the second volume left off. It might have been better had that volume finished with the publication of the The General Theory in 1936, rather than, as it did, with the debate over The General Theory. It ended, as a result, on rather an anti-climactic note (though that is anything but the tone of the book as a whole), since the debate was both indeterminate and, from Keynes’s point of view, unsatisfactory. Keynes, though he participated in the debate, was oddly detached, seeming at times not to see its significance to the argument of The General Theory. He took six months – astonishing, as Skidelsky points out, in one normally so punctilious in his correspondence – to respond to John Hicks’s famous reformulation of that argument, and did so in an offhand manner. Either he hadn’t grasped what Hicks was suggesting (which seems improbable) or else he didn’t wish to grasp it; to have done so would have been to acquiesce in a ‘Keynesianism’ interpreted via the (mild) heresies of Hicks, James Meade and Roy Harrod rather than via the true belief of Richard Kahn or Joan Robinson. In any event, Keynes made no further important theoretical contribution to economics. The running was left to others.
For Skidelsky, however, this is an unreal problem since the third volume is dominated by what he sees as the practical application of the ‘logic’ of The General Theory. Keynes’s further contributions to the debate, that is to say, took place in the world of affairs rather than in theory – but they did take place, which is why it might have been better to end Volume II in 1936. Keynes was, of course, always a public and political figure: he had made himself internationally famous by writing one of the great polemical tracts of the 20th century, The Economic Consequences of the Peace – a memorable attack on the financial provisions of the Treaty of Versailles and on those who had devised them – and throughout the 1920s and 1930s he deployed his immense persuasive skills in one controversy after another. An economics which stood aside from ‘the great issues of the day’ would have been to him inconceivable. Throughout most of this volume, however, he is a participant in the world of affairs and not just a brilliantly gifted commentator. The country’s political elite, having wished little else in the previous twenty years than that he would go away, mobilised him on the outbreak of war ‘to fight for Britain’, or, more precisely, to find the money which would enable Britain to fight. Much of the book, consequently, is given over to Anglo-American financial arrangements in which Keynes was a leading negotiator. Skidelsky’s stylistic and biographical skills give to these wearying, often maddening negotiations an interest and drive which a lesser biographer might not have managed. Nonetheless, this is a book moving in a different gear from its predecessor. It is probably too long: the details and diversions can impede the narrative, while the intellectual excitement of the second volume – the sense of a work of genius slowly emerging, the false starts and backtracks, the final achievement – is absent here. This is, for all Keynes’s continuing wit and vivacity, a darker book: one sees Keynes destroying his health and exhausting his intellect in causes which were, in the event, probably worth neither.
Keynes began ‘applying’ The General Theory almost as soon as it was published. In 1937 he started to look seriously at the financing of rearmament. He doubted whether borrowing to pay for it was likely to be inflationary and made a stab at estimating the size of the ‘output gap’ – the extent to which the productive capacity of the economy was unused and how far, therefore, rearmament could be financed by borrowing without causing inflation. He was frustrated by the absence of reliable data and his frustrationeventually resulted – during the war itself – in the first serious calculations of the national income statistics.