Civilisation is fragile — the insight of John Maynard Keynes

In both the 1920s and the 2020s, the wrong economics spell disaster

“We were not aware that civilisation was a thin and precarious crust.” So said John Maynard Keynes, the twentieth century’s most famous economist and one of its greatest thinkers. During the 1920s and 30s, as the world lurched between crises, and democracy itself was in peril, he tried to find a way to prevent the collapse into the abyss. Watching the almost unimaginable scenes from the Capitol on 6 January, his words kept coming back to mind.

Keynes — Maynard, as his friends called him — grew up in an apparent golden age. In the Edwardian summer, he led a gilded existence of house parties, Cambridge punting trips, intellectual discussion clubs, and writing treatises on such arcane matters as the nature of probability. He was part of the artistic and literary Bloomsbury Group, whose members included Virginia Woolf, and his treasured values were those of the philosopher G.E.Moore: “the pleasures of human intercourse and the enjoyment of beautiful objects”.

Or to put it another way, art and friendship.

His friends’ blithe acceptance of continued peace and prosperity was not dissimilar to that which followed the end of the Cold War. Then, in a bestselling book “The End of History”, Francis Fukuyama heralded the “universalisation of Western liberal democracy as the final form of human government”. But in both the 20th and 21st centuries, the assumption was wrong.

Keynes’ world shattered in 1914. Not only did he lose many friends in the trenches of World War I, but he left the cloisters of his Cambridge College to serve the UK government, keeping the British war effort afloat. This task blighted him in the eyes of his Bloomsbury friends, mostly pacifists, and caused many struggles with his own conscience. His inner tension finally came to a head at the Paris Peace Conference, where his conviction that the victors were drawing up a disastrous and vengeful settlement led him to walk out on the UK government.

The bitter years that followed painfully mirror our own. A global pandemic (Spanish flu). Financial chaos and debt crises. Europe fragmenting. Inequality and unemployment in Britain, and a population increasingly divided from the elites. A financial melt down (the Wall Street Crash of 1929) with long repercussions (the Great Depression) and a resulting lurch into political polarization (Bolshevism versus Fascism). Followed by the disaster of World War II.

The Reichstag burns, 1933

In our own century, the complacency was also soon shattered.

In the mess, Keynes’ insight was the need to get the economics right. Political institutions, civilisation itself, could not be relied on if the “economic juggernaut” was allowed to wreak havoc with ordinary peoples’ livelihoods and destroy their way of life. While bankers worshipped out-dated orthodoxies — free markets, the gold standard and laissez-faire — Keynes argued that drastic action was needed. When markets could not provide, the government must step in. Work must be created. Investment in houses, transport, energy infrastructure, even national parks could all be used to create prosperity and decent jobs.

Today, the advocates of a Green New Deal are arguing the same thing.

Keynes often felt that he was croaking like Cassandra, the ignored and ill-fated prophet of the Trojan War. But after World War II, his ideas became — for a while — the basis of a new, stable and prosperous world order. He did not live to see it. But he was optimistic. In Economic Possibilities for our Grandchildren, he envisaged a time in which, released from economic imperatives, the ultimate goal of economics — a better world — would be fulfilled.

That project is still in progress.

My novel, Mr Keynes’ Revolution, is based around the extraordinary life of John Maynard Keynes.

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Writer of the novel Mr Keynes’ Revolution.