wisdom to win

 Wisdom to Win
search bar left
search bar right

John Maynard Keynes - Success and WisdomJohn Maynard Keynes - Success and Wisdom


John Maynard Keynes (1883-1946)


English economist (pictured right)


His most famous book is... 

The General Theory of Employment, Interest and Money (1936).


Why was he successful and wise?


1. Revolutionary


His General Theory revolutionized economics by emphasizing:

 John Maynard Keynes - Success and Wisdom

a) governments should increase their spending more than taxes

(to increase production and income and cut unemployment)

Keynes summed up his economic policy as “cheap money, wise spending” - low interest rates coupled with government spending that increases production and employment.


b) the “multiplier effect”John Maynard Keynes - Success and Wisdom

This explains why an increase in government spending will eventually lead to a much bigger increase in income, spending and production.

For example:

If the government builds a school, its builders and their employees will have more work and spend more money at their suppliers and in shops, giving these businesses more money.

They will then spend more, giving other people and businesses more money and so on.



2. Influence

His ideas (later called Keynesian economics) were enormously influential

Keynes:John Maynard Keynes - Success and Wisdom


a) gave people hope

(by saying high unemployment could be cured through more government spending on things like health, education and defence - see point 1).

This was particularly important during the Great Depression in the 1930's when unemployment was very high

Pictured right is a poor Depression Californian family.


b) influenced Franklin D. Roosevelt’s (pictured right below) New Deal policiesJohn Maynard Keynes - Success and Wisdom

(to reduce unemployment in America during the Great Depression).


c) helped devise the Bretton Woods agreement in 1944

This stabilized the world economy by setting up the World Bank and the International Monetary Fund (IMF) to help countries in financial difficulties.


3. Foresight

In another influential book, The Economic Consequences of the Peace (1919), he attacked the huge war reparations that Germany had to pay after its defeat in the First World War.

He rightly said this would lead to:John Maynard Keynes - Success and Wisdom

  • the collapse of the German economy.
  • high inflation in Germany.
  • more war and discontent (economic problems helped Hitler, pictured right).

Inflation, he wrote, is a secret way of robbing people of their wealth.


4. Intelligence and learningJohn Maynard Keynes - Success and Wisdom

The philosopher, Bertrand Russell (pictured right), described Keynes as the most intelligent person he had ever met.

Keynes believed that knowledge comes from:

  • learning from the past and present.
  • changing your mind when the facts change.
  • accepting new ideas by escaping from old ones.

Powerful men:

  • are often “the slaves of some defunct economist”, he said.
  • must realize that “ideas shape the course of history”.

 John Maynard Keynes - Success and Wisdom

5. Principles

Keynes (pictured right in David Low's portrait) believed that:


a) people come first

The needs of people must come before money.

He attacked the selfish greed of capitalism which he described as

“the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone”.


b) everyone should love learning and life

His last words were, “I should have drunk more champagne”.

 John Maynard Keynes - Success and Wisdom

6. Action now

“In the long run we are all dead”, he said.

So governments must act now and not think that economic problems, such as inflation and unemployment, will solve themselves.


Key quote on change

If the barometer is high and the clouds are black, don’t waste time on a debate on whether to take an umbrella.


Key quote on creativity

Ideas shape the course of history.


Key quote on the past, present and future

I do not know which makes a man more conservative – to know nothing but the present, or nothing but the past.


Key quote on planning and strategy

In the long run... we are all dead.


Key quote on economics

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else.

The day is not far off when the economic problem will take the back seat where it belongs, and the arena of the heart and the head will be occupied or reoccupied, by our real problems — the problems of life and of human relations, of creation and behaviour and religion


Key quote on education

Education: the inculcation of the incomprehensible into the indifferent by the incompetent.


Key quote on innovation

The difficulty lies not in the new ideas but in escaping the old ones.


Key quote on communication

Words ought to be a little wild, for they are the assault of thoughts upon the unthinking.


Key quotes on decision making

When the facts change, I change my mind.

There is no harm in being sometimes wrong - especially if one is promptly found out.

It’s better to be roughly right than precisely wrong.


Key quote on business ethics

Capitalism is the astounding belief that the wickedest of men will do the wickedest of things for the greatest good of everyone


Free Newsletter
Enter your name and e-mail address to receive our free newsletter with analysis of business issues and new business books