AnsTRAcr. D. E. Moggridge's perhaps too exhaustive biography is examinedand some questions are raised relative to Keynes' views on theory and theirsource, and his views on German reparations and whether Britain should haveaccepted the original provisions of the agreement providing for establishmentof the World Bank and the International Monetary Fund.
OF AI.I. FORMS OF WRrriNG, a biography is, on the surface, the least demandingsince one deals with facts which naturally arrange themselves chronologically.But a moment's reflection shows that biography has its problems. The writermust be selective in the choice of facts. What principle will he follow? Shouldthe historical background be given a role and, if so, how much of a role? Doesthe historical background include the intellectual too? Should one peer intothe psychology of the subject, perhaps to throw light on his intellectual creations?
In the preface of his biography of Keynes, Professor Moggridge is cognizantof these problems; he stoutly rejects, for instance, the Stigler-Walker view thatthe biography of an economist must be solely concerned with his economictheorizing, with the arduous climb from error to truth. Indeed, Moggridge in-troduces his preface with a quotation from Virginia Woolf to the effect that abiography should give us "the creative fact; the fertile fact; the fact that suggestsand engenders." Moggridge agrees: "facts do not speak for themselves . . .Selection and arrangement do m a t t e r . . . "
Alas, anyone tackling J. M. Keynes' biography has his work cut out. By hisown admission, Keynes was a compulsive writer (see My Early Beliefs) and ahoarder of paper. One suspects that when he took the train or went to thetheater, he saved the ticket to enable future biographers to follow his footsteps.This Moggridge does with unrelenting thoroughness. Via appointment calendars,diaries, letters and carbon copies of letters, aides de memoir, financial records,tabulations of "sexual activities" and of "partners" (see Plates 9 and 10), andmemoirs and records of conversations, he gives a thorough account of his sub-ject's life. He examined the Charleston Papers, the Keynes Papers, the Joan
• [Piero V. Mini, PhD., i.s a.ssoclale professor of economics at Bryant College, Smithfiekl, Rl02917.1 This is an invited review article.
Robinson Papers, the Richard Keynes Papers, the Polly Hill Collection, plus theofficial public record of background events, and, of course, Keynes' own profes-sional writings, most of whose thirty volumes Moggridge himself edited. Mogg-ridge's diligent work on Keynes has stretched over two decades and, not sur-prisingly, has resulted in this most complete biography.
There are so many facts demanding attention that sometimes the languagecreeks under the strain; "Maynard spent a further two to five days there [inFlorence] before he went off to to [sic] London via Germany to collect his brotherwho had been spending a term in the Black Forest improving his German beforegoing up to Pembroke College, Cambridge, to read natural sciences,'"
The problem, of course, is the pace of Keynes' life; dinner parties, outings,weekends in the country, working lunches, trips abroad, addresses to variousgroups, sicknesses, arguments with Bloomberries, meetings with politicians,economists, friends; gambling excursions to the South of France , , , all demandattention and they get it.
At the beginning of Augu.st [1919] he settled down to Charle.ston with the book [the writingof The Economic Consequences of the Peace] after a whirlwind ten days in London, duringwhich he opened a discussion at the Tuesday Club on the Peace terms; gave evidence to theOfficial Committee on Indian Exchange and Currency, which was picking up where theChamberlain Committee had left off in the Spring of 1914 as well as exaniining the appropriatepost-war exchange rate for the rupee; addressed the Fight the Famine Council; went to theDiaghilev ballet season at the Alhambra twice (including the premiere of The Three CorneredHat), and, with Clive Bell, threw an end-of-season ballet dinner party for thirty-three includinga selection of Bloomsbury, members of the cast plus Derain, the Picas.sos, Massine and ErnstAnsermet, He remained there, except for two overnight visits to London, until the beginningof October,^
(A footnote adds the information that Lydia Lopokova was not at the dinner,having "disappeared," much to Keynes' regret), Keynes must have known ev-erybody who counted in the first half of the century; a dramatispersonae ai theend of the book lists nearly 600 "characters," The thoroughness of this biographyis not in doubt.
There are, however, a few points with which this reviewer would like to takeissue. One of them pertains to Keynes' responsibility for the demands made bythe revenchist Hughes Committee (1918) that Germany be made to pay for thefull cost of the war. The committee, says Moggridge, arrived at the absurd figureof L24,000 million "after one day" of discussion and Keynes had nothing to dowith it,' The story is not so simple,
Vol, XVI of the Collected Writings contains a memorandum by Keynes,'' brieflyquoted by Moggridge, In this memo, undoubtedly, Keynes takes a conciliatoryview of reparations, arguing that the Allies should ask reparations only for thedirect damage caused by the Germans on civilian assets and life, and also basing
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his argument on Germany's capacity to pay, which he judged to be no morethan L2000 million. But, in this same memorandum, Keynes has a few paragraphsin which he estimates the full cost ofthe war to the Allies, including pensions,military budgets, destruction of military installations, payment of interest onwar bonds, etc. The figure now becomes "L24,350 million; or in round figuresL25,000 million."' Keynes' memorandum is not dated, but we do know that itwas completed by December, for on the 26th of that month it was commentedon by an associate. The meetings of the Hughes Committee—which Keynesattended—took place in late November and early December.' It is thus easy toconclude that Keynes himself was the source of the estimated bill for L24,000million. The question is not whether Keynes believed in charging Germany thefull cost ofthe war; of course he did not. In the memo he wrote: if we can provethat Germany cannot pay in excess of L2000 million then "the question of anindemnity to meet the general costs ofthe war, namely, L25,000 million, neednot arise."^ But proof that Germany could not afford more than L2,000 milliondid not convince Hughes and his committee. A bit of psychology throws lighton Keynes' acdons. Keynes (on whose "dualism" more later) in the memo ispartly accountant, partly humane philosopher; partly civil servant, partly policymaker. As an accountant and civil servant, he saw it as his duty to be thoroughand to provide an estimate for the full bill. As a humane person, he advancedthe principles of ability to pay and common sense. The politicians picked whatthey wanted, and what they thought the people wanted, namely a refund forthe cost of the war.
This interpretation opens up interesting fields of speculation. Keynes' feelingsin 1919, that he had been "an accomplice in all this wickedness and folly" (ashe wrote to his mother) may be more than literary exaggeration. It may be aconfession of guilt. It may also be that his portrait of Woodrow Wilson—dupedby Lloyd George and Clemenceau—was based on self-knowledge. He, too, hadbeen duped by the politicians! Indeed, it appears that since Keynes, along withJohn F. Dulles, authored the "war guilt" clause to the Treaty—whose importance,as Moggridge recognizes, Keynes totally missed*—what we have here is thepicture of a politically naive man, or, perhaps, of a man who trusted the rea-sonableness of human nature too much (see My Early Beliefs). His recognitionof guilt and naivete may also explain Keynes' virulent reaction to the Treaty inThe Economic Consequences ofthe Peace.
The chronological presentation of facts in a biography presents a problem.Any activity that stretches over many years is presented on the installment plan,so to speak, a few pages here and a few paragraphs there. This is the case, forinstance, with Moggridge's survey of Keynes' activities as an investor, which heexamines over five different segments scattered throughout the book. With this
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kind of treatment, gaps are likely to appear and create problems for readersincluding this reviewer. Moggridge, for instance, recognizes that Keynes spec-ulated before 1914 (an advance over Roy Harrod who wrote that Keynes' spec-ulations began after the war) but then he picks up the story with July 1919. ButVol. XII, chapter 1 of the Collected Writings, prepared by Moggridge himself,shows Keynes' security holdings to have increased during the First World Warfrom 3,819 to 14,453 pounds.' Was this the result of further speculation whilehe was at the Treasury? Also, a more thorough treatment of Keynes' investmentexperience might even help in the understanding of The General Theory.
While Moggridge does call attention to his change in investment philosophyfrom the credit cycle to buying "for keeps," he ignores Keynes' frequent mis-givings about investing as such. In the Collected Writings, there is a remarkablespeech to the members of the estate Committee at King's: "The managementof stock exchange investments is a kind of low pursuit, having little social value. . . " lower than tending sheep and raising crops.'" Repeatedly, Keynes notesthat speculation develops "too unsettled and speculative a state of mind"; thatit requires more "nerves, patience and fortitude" than any other activity; that itmakes one lose his "sense of proportions." Speculation against the pound maybe "against the national interest." Trying to exit from a falling market (demandingliquidity) is "anti-social," "fantastic," "destructive of the whole system." The(ignored) General reeory proposal to make investment "permanent and indis-soluble, like marriage," is consistent with these feelings.
The attitude of a biographer toward his subject, in my opinion, should be thatof sympathetic friend, so to speak. A critical attitude may preclude the possibilityof understanding important aspects of the subject's ideas and psychology. This,I think, is the case with Moggridge's comments on Keynes' preface to the Germaneclition of The General Theory. In that preface Keynes wrote that his theory "ismore easily adapted to the conditions of a totalitarian state"—with its strongerpolitical leadership—than to a laissez faire poWicdX system. Moggridge allegesthat these lines show "remarkable insensitivity, indeed indifference, to a regimethat put its political opponents into concentration camp and passed the anti-Semitic Nuremburg laws."'^But ifwe «ccep/Keynes' statement, we may be puton the right track to understand a peculiarity of his personality: he had a re-markable ability to separate intellect from feelings. The passionate Keynes wasas repelled as anybody else by Nazi "barbarism" (his word, in a letter quotedby Moggridge). But there was also the cold, intellectual Keynes who recognizedthat Hitler's Germany was the only country that conquered the depression, bya program of raising demand through public works and rearmament. Keynesprobably saw that, cleansed of its authoritarian and aggressive spirit, the Nazi
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experience was instructive and that strong political leadership makes the solutionof economic problems easier.
On various occasions, Moggridge does, indeed, call attention to Keynes' dualnature: the epigraph of chapter 2 quotes Keynes as saying "One seems to have, , , two entirely different lives: one at home and the other at school, and whenyou are living one of them, the other doesn't seem more than a dream, , ,"And again (epigraph to chapter 3): "I don't think one realizes how very discrete(in the mathematical sense) one's existence is. My doings at school don't seemto have the remotest connection with my doings up here: nor my life one termwith my life in any other," Then there is Lytton Strachey's remark (also quotedby Moggridge as the epigraph to chapter 6) to the effect that posterity will haveto distinguish between two Keyneses: the author of Probability (intellect) andthe author of The Economic Consequences (passion). Now, these insights intoKeynes' dual nature are not exploited by Moggridge, while they could be thekey to understanding many attitudes of his and even The General Theory, wherereason ("we calculate where we can") and passion ("animal spirits") battleeach other.
As editor of the Economic Journal, Moggridge says, Keynes made "errors ofjudgement": he refused a paper by Bertil Ohlin ("This amounts to nothing , , , ")which contained nothing less than the historical factor proportions theorem ofinternational trade. He rejected a paper by Roy Harrod (his invention of themarginal revenue curve), as well as an important theoretical paper by Wicksell,"Now, much as we may regret it, these judgements are fully in harmony withKeynes' observations about Tinbergen's work ("all hocus", "a mess of unintel-ligible figuring", "black magic", "alchemy", "charlatanism", "a nightmare'"''),and about Joan Robinson's Economics of Imperfect Competition ("esoteric abra-cadabra"),'' Keynes' attitude toward economic theorizing was consistentthroughout his life—and is, to this day, hardly appreciated: he disliked deductive,"real" theorizing that proceeded from heaven to earth rather than vice versa.
Some of the best chapters in the book are those dealing with Keynes' doingsand thinking against the background of the depression. They bring out his"struggles of escape" from the representatives of "sound principles:" MontagueNorman of the Bank of England, Sir Richard Hopkins of the Treasury, and LionelRobbins, Pigou and Hubert Henderson, The latter economists blamed thedepression, respectively, on inflexible wages, unemployment insurance and thebudget deficits, Moggridge shows how they conspired to make Keynes' effortsfutile: the reports of the Macmillan Committee and of the Committee of Econ-omists splintered into many "minority reports" and were, in any case, overtakenby events like the collapse of the European financial system and Britain's aban-donment of the gold standard in 1931,
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These chapters lead naturally into Moggridge's one on The General Theorywhere he is concerned with the dating of the major theoretical pieces of theKeynesian model. He mainly agrees with Keynes' own assessment that the ger-mination of his ideas goes back to the period after 1930, Actually, reflectionabout Keynes' life and work should bring out the fact that the roots of some ofthe distinctive theories, at least subconsciously, go back much further than Keyneshimself realized. The importance of aggregate demand was brought home tohim by the experience of the First World War, In The Economic Consequences,he remarked that the war taught that the Victorian era did not take full advantageof its economic opportunities: it took the artificial stimulus of governmentspending in 1914-18 to show what the system could do. His theory of the rateof interest as related to liquidity and uncertainty rather than "waiting" musthave come from his own investment experience. He borrowed on margin ingood times and withdrew into liquidity when he anticipated a market decline.The notion that spending is income to the recipient, who is then likely to respendmost of it (hence the multiplier) is common sense, even to somebody broughtup under the classical system. Probably the hardest theoretical piece to comeby was the marginal efficiency of capital—given Keynes' ignorance of the pro-duction aspect of capitalism.
Strangely enough, Moggridge makes no mention of what many recent scholarssee as the major insight of The General Theory, the "discovery" that uncertaintypervades many business decisions and that, therefore, the system is vulnerableto sudden breakdowns of confidence. There is also no recognition of the sub-jectivity of judging prospective yields and of the role of "animal spirits,"
The chapter on The General Theory is introduced by an epigraph quotingKeynes to the effect that a thinker is often intuitively aware of the "destination"before he can supply a proof. In other words, Keynes confessed that he knewwhat he wanted to prove before he turned his vision into a model. Now, hereis an insight of some importance. It is tantamount to admitting that desires,dislikes, ideology and prejudices come first, and they guide the mind throughthe maze of "facts" towards a predetermined vision. The oft-quoted story ofKeynes about Newton intuiting a certain physical truth before he had a prooffor it is actually misleading: a material fact eventually provided a check toNewton's intuitions.
But in social thinking facts are more malleable. Witness the fact that mone-tarists, for instance, claim to explain the same things that the Keynesians explain.Pursuing Keynes' musings about the sources of intuition (which he suggestsare psychological), one is led to other aspects of his work and personality ad-dressed in other sections of the book: to Moore, to Bloomsbury values, to theessays of the 1920s, to Probability, and, psychologically, to the "unsurpassed
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individualism" of his youth, to his remarkable sensitivity to the winds of change,to his absence of loyalties, to his dislike of humbug and hypocrisy—the Victorianvalues embodied in the "golden calf," in "purposiveness," in "the economiccriterion" as a standard of judgment and evaluation, Moggridge quotes a fasci-nating remark by Keynes to the effect that he saw himself as improving theefficiency of the economic engine so as to make inefficiency respectable in thefuture. Young Marx had the same vision: in The Economic and PhilosophicManuscripts of 1844, he expressed the belief that capitalism may one day becomeso productive as to enable a man to go to work or to go fishing as the moodhits him, Keynes' Economic Possibilities for our Grandchildren echoes the samebelief.
Also of great value are Moggridge's chapters dealing with Keynes' work forhis government during the Second World War, leading to the new post-warfinancial structure and to the American loan to Britain, To one who has alreadyread Volumes XXIII-XXVII of the Collected Writings, these chapters of Mogg-ridge bring out some of the problems Keynes struggled with: Article VII on"considerations;" the annoyance of seeing his Currency Union blueprint elbowedout by the Americans' less enlightened Stabilization Fund; the eleventh hourrealization that at Bretton Woods, he had put his signature on something hemisunderstood that committed his country to providing convertibility at all costs.One already acquainted with Keynes' letters and memos can see that, throughout,Keynes struggled with the same issue: he knew that the Americans were morededicated to laissez faire ("the clutch of the dead, or at least moribund, hand"'*)than was good for Britain and the world, so he tried to insulate his country'seconomy from the American philosophy.
The average reader would have been helped, I think, if Moggridge had fol-lowed his own blueprint of the Collected Writings, vol, XXV, This volume,which contains the various drafts of the Currency Union proposal, begins withKeynes' remarkable reply to the German Minister of Economic Affairs, WaltherFunk, After the fall of France, the German propaganda office offered a vision ofthe "New Order" awaiting a unified Europe, It centered around a gold-less markof stable commodity value, and aimed at full employment and social and eco-nomic stability. Asked to prepare a reply to Funk, Keynes, far from ridiculinghis ideas (as the British propaganda office expected him to do), actually confessedto be "in agreement with three fourths" of them! In the 193O's, he says, laissezfaire in exchange rates led to chaos. Funk and Schacht evolved "somethingbetter": a system of negotiated exchange rates which have nothing to do witha country's command of gold,'' Indeed, in the same piece Keynes clearly revealshis preference for a "pound bloc" that would include the Commonwealth coun-tries, the Middle East, Argentina, etc. Even the United States would be included
334 American Journal of Economics and Sociology
in it, provided that it give up its "lunatic" ideas about gold and refrained frommaintaining an "unbalanced creditor position.""*
In the biography, Moggridge hardly mentions this memo. This is unfortunatebecause then Moggridge misses the fact that Keynes, throughout the negotiationsof 1942-46, had more than a doubt about falling in with United States leadership.He tried to circumscribe and neutralize the ideas of the Americans but couldnot suppress their spirit, which is that creditors have the power to "crack thewhip" (Keynes' phrase), to tell debtors what to do. (In the Currency Unioncreditors had to revalue their currency thereby ceasing to remain creditors).Keynes wanted an international financial system that did not discourage a countryfrom making experiments of a socialistic nature. He meant the (near) euthanasiaof the international rentier.
These final chapters of Moggridge are drama. The one entitled "The Loan"is great drama as Keynes in 1945 had to rapidly adjust his ideas to those of theAmericans who had started to crack the whip. Suddenly, the "enemy" becamenot Washington but London, whose unrealistic ideas about U.S. assistance hadbeen caused by "the other" Keynes, the one who believed Britain to be a greatand powerful nation, the one who flirted with bilateralism, the one attached toImperial Preference, the one who felt that Britain had already paid a great pricewhen, "alone for nearly two years", she defended everybody's freedom (in-cluding America's) against Nazism.
At the end of his life Keynes, once again, displayed that remarkable adaptabilityof mind—possiblyoneof the sources of his "intuition", certainly the by-productof his sensitive nature—the ability to jettison his previous beliefs and attitudesand to fall in with the new conditions. But past feelings are not so easily sup-pressed: they live underneath and sometimes they explode. In Keynes' case,the explosion occurred, it seems, during his trip home from Savannah, in March1946 when, in the 1972 recallection of Sir George Bolton, Keynes spent histime on the Queen Mary
writing an article for publication condemning American policy with extraordinary ferocityand passionately recommending H. M. government to refuse to ratify the [International Mon-etary) Fund and [World] Bank agreements . . . Ernest Rowe-Dutton [of the British Treasury]and I spent most of the voyage trying to dissuade Keynes from pursuing these proposals.Eventually he agreed to destroy the paper."
Moggridge doubts Bolton's recollections, alleging, among other things, thatKeynes was sick during part of the voyage and that he aiso wrote an eighteenpage document advising the government to accept the IMF and World Bankagreements. But how could Bolton's memory mislead him? He was in the pres-ence of a historical event, with witnesses, in a unique setting. Writing a dozenpages on matters that Keynes had anguished over, and felt passionately about,for years would have taken him no more than a few hours.
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The Queen Mary episode is very much in line with Keynes' temperamentand with the self doubts and tribulations of the previous years. Savannah wasthe last straw, as the Americans—as he put it—had "enough stooges" to railroadmajor decisions of political and financial patronage. Five weeks later Keyneswas dead.
Any reader can only have admiration for Moggridge's biography: no one hasworked more tirelessly to unearth so many facts about one of the greatest En-glishmen of the century. At the same time one suspects that Moggridge's biog-raphy reflects the decade in which it was written: the eighties were years ofLaissez-faire Triumphant and, I think, Moggridge endeavors to sanitize his sub-ject's more heretical political, economic and methodological views. The well-known problem of historiography, rising above the values of one's time, is noteasily surmountable.
Notes
1, D, E, Moggridge, Maynard Keynes: An Economist's Biography, London and New York:Routledge, 1992, 104,
2, ,320-1,3, , 290 and 295,4, J, M, Keynes, The Collected Writings of John Maynard Keynes (henceforth, CVi) XVi, 344-
Reachingfor WordsINTERESTING PHILOSOPHY is rarely an examination of the pros and cons of a thesis.Usually it is, implicitly or explicitly, a contest between an entrenched vocabularywhich has become a nuisance and a half-formed new vocabulary which vaguelypromises great things,
