University Of Cambridge Faculty

"To the pure geometer the radius of curvature is an incidental characteristic — like the grin of the Cheshire cat. To the physicist it is an indispensable characteristic. It would be going too far to say that to the physicist the cat is merely incidental to the grin. Physics is concerned with interrelatedness such as the interrelatedness of cats and grins. In this case the "cat without a grin" and the "grin without a cat" are equally set aside as purely mathematical phantasies."

"I think that science would never have achieved much progress if it had always imagined unknown obstacles hidden round every corner. At least we may peer gingerly round the corner, and perhaps we shall find there is nothing very formidable after all."

"A star is drawing on some vast reservoir of energy by means unknown to us. This reservoir can scarcely be other than the sub-atomic energy which, it is known, exists abundantly in all matter; we sometimes dream that man will one day learn to release it and use it for his service. The store is well-nigh inexhaustible, if only it could be tapped."

"We do not argue with the critic who urges that the stars are not hot enough for this process; we tell him to go and find a hotter place."

"At terrestrial temperatures matter has complex properties which are likely to prove most difficult to unravel; but it is reasonable to hope that in the not too distant future we shall be competent to understand so simple a thing as a star."

"The present revolution of scientific thought follows in natural sequence on the great revolutions at earlier epochs in the history of science. Einstein's special theory of relativity, which explains the indeterminateness of the frame of space and time, crowns the work of Copernicus who first led us to give up our insistence on a geocentric outlook on nature; Einstein's general theory of relativity, which reveals the curvature or non-Euclidean geometry of space and time, carries forward the rudimentary thought of those earlier astronomers who first contemplated the possibility that their existence lay on something which was not flat. These earlier revolutions are still a source of perplexity in childhood, which we soon outgrow; and a time will come when Einstein's amazing revelations have likewise sunk into the commonplaces of educated thought."

"Physics has in the main contented itself with studying the abridged edition of the book of nature."

"No one embodied the Cambridge spirit of culture, fun, and public duty so much as Maynard Keynes. No one was more brilliant or charming. No economist in this century influenced politicians or the course of economics more."

"On the morning after the German “election” [the Reichstag election of 29 March 1936] I travelled to Basle; it was an exquisite liberation to reach Switzerland. It must have been only a little later that I met Maynard Keynes at some gathering in London. “I do wish you had not written that book”, I found myself saying (meaning The Economic Consequences, which the Germans never ceased to quote) and then longed for the ground to swallow me up. But he said, simply and gently, “So do I.”"

"'Anything we can do, we can afford,' John Maynard Keynes declared in the midst of the Second World War. The pandemic reminded us of that principle; with climate change, the world might hope to actually enact it."

"Keynes, I am sure, often interpreted his role as that of the prophet and the politician, and it was in such a period, I presume, that he once wrote: "Words are to be a little wild, for they are the assaults of thoughts on the unthinking." I do not challenge this for prophets and politicians, for they have special occupational license to promote their objectives free from stodgy inhibitions on the exercise of all their rhetorical resources for persuasion. I believe in the virtues of professional division of labor, however, and I am troubled, therefore, when economists adopt the role and the tactics of the prophet or the politician, especially when there is any ground for suspicion that what is involved is false prophecy."

"I liked him, but not much; he smelled of Bloomsbury... He seethed at "the Carthaginian peace of M. Clemenceau", thought the treaty [of Versailles] an offence comparable with the German invasion of Belgium, and blasted "the policy of reducing Germany to servitude for a generation..." From the start he got everything out of focus, even imagining that "the perils of the future lie not in frontiers and sovereignties but in food, coal and transport". ... He condemned the liberated states, and scouted further danger to France in measurable future... The poor chap's prophecies went all agley... "Those who sign this Treaty," said the Chief German Delegate, "will sign the death sentence of many millions of German men, women and children". And Keynes echoed him: "I know of no adequate answer to these words". Others were more imaginative. Ten years after signature European production surpassed pre-war levels, and standards of life were never higher. In Germany coal, iron and steel beat all records, savings increased hugely, national income was 60% higher than before the war... Small attention should therefore have been paid to Keynes' outburst or to the fits of ungovernable silliness which it incited. The outcome was however prodigious, for the book [The Economic Consequences of the Peace] was just what American dissidents needed to reject Wilson. It was used to prove by "the horrors of Versailles"... Keynes took the first step in reasoning the United States back into neutrality between good and evil."

"The central message is still that, as Keynes argued, fiscal policy is the answer to liquidity traps, financial or political. The arguments against fiscal policy in Japan, so far as I understand them are intellectually fallacious; they would receive failing grades in an undergraduate macro exam."

"Keynes did not challenge the efficacy of price adjustment mechanisms in clearing particular markets in the Marshallian partial equilibrium theory on which he had been reared. He did challenge the mindless application of those mechanisms to economy-wide markets. Founding what came to be known as macroeconomics, he was modeling a whole economy as a closed system. He knew he could not use the Marshallian assumption that the clearing of one market could be safely described on the assumption that the rest of the economy was unaffected."

"There is a nice story which is rather revealing about the power of Keynes's arguments and their political content. It is about John Strachey, a Marxist. He was a cousin of Lytton Strachey ― they both had the same skill in writing. John Strachey wrote a book called The Coming Struggle for Power. In the 1930s this book was so influential in Cambridge, England, that, when I got there, every person had it on his bookshelf, prominently displayed. It was an exciting book, intellectually exciting to read. It was the Bible of Cambridge students. In my last year at Cambridge Strachey was invited by the Marshall Society, which was the general undergraduate society for economics student, to give a talk. In this talk he argued that Marx showed us the way to make the system work, an argument that met a very, very strong favorable response ― as his earlier writing had done. I had been asked in advance to move a vote of thanks at the end of the lecture; say a few words, if I could, about his lecture, but essentially to move a vote of thanks. I did, except I took the occasion to say that there would appear ― this was in November 1935 ― within a few months a book that would set out a superior method of analysis. It had been written by John Maynard Keynes. I didn't know whether Strachey would know the name. He motioned to me and said, "I'd like to thank you for your vote of thanks," and so on; "I'd like to find out more about the book by Keynes." And I told him, and he took down the name. At the time, I did not realize the connection between Keynes and Lytton Strachey and Lytton and John Strachey. A couple of years later I received a new book by John Strachey in the mail from the Left Book Club. I was astounded; it was absolutely Keynes. I mean, he was so much influenced by Keynes ― he had been so strongly influenced by Keynes that he became an instant, overnight, follower. Strachey really understood Keynes; it's a brilliant exposition and application to the British situation. It's rather more interesting than Keynes and deserves to be reprinted. It shows how Keynes had refuted Communism and how John Strachey, an extreme Marxist whose life up to then had been devoted to Marx and the Marxian course, had been completely changed by Keynes. Given that history, the later attacks on U.S. Keynesians, accusing them of being Communists, were incomprehensible to me."

"It wasn't really that they were put into effect as ideas by the New Deal or by anybody else. As a matter of fact, paradoxically, many of the policies of Nazi Germany were very much in line with Keynesian recommendations for overcoming a depression, and the German depression in general was overcome. Hitler's Germany came out of the depression long before the United States did, and that was because they spent a lot of money, deficit financing, controlled investment, on a war program. As a matter of fact, the Great Depression never was over in the United States until the war. The New Deal did not act on Keynesian policies at all. The history of Keynesian theory and policy is full of paradoxes. It is important that you really understand the complexities of the history of the period."

"Keynes's habit of treating the state as a deus ex machina to be invoked whenever his human actors, behaving according to the rules of the capitalist game, get themselves into a dilemma from which there is apparently no escape. Naturally, this Olympian interventionist resolves everything in a manner satisfactory to the author and presumably to the audience. The only trouble is — as every Marxist knows — that the state is not a god but one of the actors who has a part to play just like all the other actors."

"Of all economists, Lord Keynes was most sensitive to the conditions of the next moment—he was a Geiger counter of future headlines. This was a most extraordinary gift, and it may have extraordinary consequences for his theories."

"In ethics Keynes was a Platonist, in politics he was an Aristotelian. His ethics pointed him towards the ideal; his politics towards moderation."

"Keynes saw himself as overturning ‘‘classical’’ economics. He was less revolutionary than he thought. Large chunks of Marshallianism – particularly to do with the importance of time (short and long periods), the technique of partial equilibrium analysis, and the cash balances version of the quantity theory of money – were central to his economics and distanced it from the timeless simultaneous-equation general equilibrium theory of Menger and Walras which Hayek regarded as the supreme achievement of the marginalist revolution."

"Like Odysseus, Keynes was a successful, not a tragic, hero. He heard the beautiful singing of the Sirens, but took precautions against being shipwrecked, keeping to the course for which his talents and the state of the world predestined him. Artfully, he strove for the best of all worlds, in his life and his work, and miraculously, came close to achieving it."

"Keynes's economic philosophy is thus made up of three interdependent parts: his technical macroeconomics, his embattled political philosophy and his ultimate ethical purpose."

"The world in which we live today has been made much more secure by the economic wisdom that Keynes brought to us during the dark days of the Great Depression. When that wisdom is partly or wholly ignored in the making of economic policy, large numbers of people are made to suffer unnecessarily. I am afraid we have seen several depressing examples of that in the recent years, especially in Europe, with a huge human toll. Keynes was a great pathfinder, and it would have distressed — if not surprised — him to see how well-identified paths can be comprehensively neglected by policymaking that draws more on ideology than on well-reflected reasoning."

"Nature is wont to impose two distinct penalties upon those who try to beat out their stock of energy to the thinnest leaf. One of these penalties Keynes undoubtedly paid. The quality of his work suffered from its quantity and not only as to form: much of his secondary work shows the traces of haste, and some of his most important work, the traces of incessant interruptions that injured its growth. Who fails to realize this-to realize that he beholds work that has never been allowed to ripen, has never received the last finishing touch-will never do justice to Keynes's powers. But the other penalty was remitted to him. In general, there is something inhuman about human machines that fully use every ounce of their fuel. Such men are mostly cold in their personal relations, inaccessible, preoccupied. Their work is their life, no other interests exist for them, or only interests of the most superficial kind. But Keynes was the exact opposite of all this-the pleasantest fellow you can think of; pleasant, kind, and cheerful in the sense in which precisely those people are pleasant, kind, and cheerful who have nothing on their minds and whose one principle it is never to allow any pursuit of theirs to degenerate into work. He was affectionate. He was always ready to enter with friendly zest into the views, interests, and troubles of others. He was generous,and not only with money. He was sociable, enjoyed conversation, and shone in it. And, contrary to a widely spread opinion, he could be polite, polite with an old-world punctilio that costs time. For instance, he would refuse to sit down to his lunch, in spite of telegraphic and telephonic expostulation, until his guest, delayed by fog in the Channel, put in appearance at 4 p.m."

"Among economists John Maynard Keynes (1883–1946) did well over a lifetime. He had a high I.Q. and must have been a better-than-average bridge player. Apparently some of his triumphs in currency trading stemmed from his micro- and macroeconomic hunches. However, after scoring well on bets that Germany’s postwar inflation would cause the mark to depreciate, he did go virtually bankrupt when for a few months the mark reversed from its down trend. A kindly City friend enabled him to avoid bankruptcy, a fate worse than death in the post-Edwardian Age. (Again in 1929 a number of people incurred losses when a Keynes-Robertson speculative fund did badly. I learned this from Lionel Robbins. However, in autumn 1932, German Professor Hans Neisser heard Keynes give a lecture at Cambridge, in which he said, “Right now is your lifetime opportunity. Borrow and beg to invest in diversified common stocks that are going to recover now that the pound has ceased to be over-valued.” Not a shabby call.)"

"Everyone understands now, on the contrary, that there can be no solution without government. The Keynesian idea is once again accepted that fiscal policy and deficit spending has a major role to play in guiding a market economy. I wish Friedman were still alive so he could witness how his extremism led to the defeat of his own ideas."

"You must realize how bad, temporarily, capitalism had become in public opinion. I remember seeing a poll of small town attitudes in local newspapers. They asked questions like "should we nationalize the banking system?" More than half of those editors, about the most conservative group in the world, were in favor of nationalizing the banking system. Father Coughlin, the Detroit demagogue who turned anti-Semitic, complained about "fountain pen money, the perpetrator of great wealth, the money changers in the temple." It was kind of a crude expansionism. Huey Long and "every man a millionaire," or whatever it was. So I would say that Keynes thought of himself as saving the system. And lots of the New Dealers ― original New Dealers, Veblenites, technocrats ― did not like Keynesian economics. They said "that is using palliatives, it's not getting rid of the wicked capitalistic ethos." Keynes told Roosevelt when he came here in 1933 that he needed to spend so much more per month in deficit spending. He gave very precise figures with great self-confidence."

"An optimist who lived at a time when the world economy was running so badly that clever gimmicks could still work wonders, Keynes's object was to save capitalism from itself. In the end, his prescription in its most simple form self-destructed, as the obligation to run a full-employment humanitarian state caused modern economies to succumb to the new disease of stagflation - high inflation along with joblessness and excess capacity. Economists of the most diverse views are constantly asking themselves: What would Keynes advise if he were now alive. And usually - whether the economist is a free-marketeer like Friederick von Hayek or one with strong interventionist leanings like John Kenneth Galbraith - they pay Keynes the supreme compliment of believing that if brought back to earth, Maynard would be favoring just what each of them happens to favor. One also might wonder what Lord Keynes would prescribe for the huge structural deficit of Ronald Reagan, with the crowding out of investment that it implies once the American economy reattains high levels of employment."

"Yes, Keynes was a genius. Yes, some of his ideas were inchoate and would not have lent themselves usefully to diagramming and symbolic manipulation. Yes, by the time of the Radcliffe committee many of his British admirers were still frozen in the Model T version of his system. And yes, Keynes resented excessive simplifying of his paradigms. Nevertheless, in science it is not the incoherent, inchoate and ineffable that has a cash value. If that were so, Goethe would be a greater scientist than either Einstein or Newton. What matters is the Kuhnian paradigm that people who are not geniuses can use. That which so many scholars independently agreed upon cannot be independent of the text that Keynes wrote down for them to read. What is remarkable is not the cogency of the case that Leijonhufvud manages to muster, which is rather flimsy, but rather how strong was the latent demand in the 1970s for a work to debunk Keynesianism. Harry Johnson put the same point in a different way."

"Keynes's intellect was the sharpest and clearest that I have ever known. When I argued with him, I felt that I took my life in my hands, and I seldom emerged without feeling something of a fool. I was sometimes inclined to feel that so much cleverness must be incompatible with depth, but I do not think that this feeling was justified."

"There are still many people in America who regard depressions as acts of God. I think Keynes proved that the responsibility for these occurrences does not rest with Providence."

"A decade and a half ago Lord Keynes brought together a selection of his writings on the political and economic issues from the end of the last war to the world slump of 1931. “Here are collected’, he wrote, ‘the croakings of twelve years, the croakings of a Cassandra who could never influence the course of events in time.” We know now that that was over-modest of him: that he exercised all too much influence by his book against the Treaty of Versailles — where he was almost entirely wrong!— and none at all up to that time with regard to monetary policy, the return to the Gold Standard and other issues where he was quite right. How characteristic of human affairs!"

"How is it that such an extraordinary man (in the best sense), whose intellect was so wide-ranging and who was just as much artist and organizer as he was scholar, could at the same time be so blind to moral-political postulates (which even in the narrower domain of economics are more important in the long run than clever monetary formulae) without which human society cannot exist? To fully appreciate the kind of man and the kind of philosophy we are here concerned with, it is useful to compare Keynes with Adam Smith. In the depth and extent of their influence at least, the two men were strikingly similar. Moreover, both Smith and Keynes had interests which extended far beyond the confines of economics. But whereas Smith left us, in addition to his magnum opus on the Wealth of Nations (1776) a book on the Theory of Moral Sentiments (1759) which exposes the full moral-philosophical foundations of his much-misconstrued economic doctrines, Keynes has left us, in addition to his economic works, a monograph on the theory of probability (A Treatise on Probability, 1921). For Smith, whose book on the Wealth of Nations was planned as a segment of a giant opus on the cultural history of mankind, economics was viewed as an organic part of the larger whole of the intellectual, moral, and historical life of society; for Keynes, economics was part of a mathematical-mechanical universe. The one man was a representative of the humanist spirit of the 18th century; the other a representative of the geometric spirit of the 20th century; a deistic moralist was the one, an exponent of positivistic scientism the other."

"John Maynard Keynes, who died in 1946 at the age of 62, is not only the best known economist of our times but also a man who by any standards must be reckoned as one of the leading personages of the first half of the twentieth century. The history of the era which followed World War I can no more dispense with the name of this singular individual than it can with the names of Einstein, Churchill, Roosevelt, or Hitler. It is only in this broad perspective that Keynes' full importance becomes visible. How ought we to judge the influence of this man? Is he the Copernicus of economics, as so many claim, the man who banished the ghosts of economics grown rigid in the chains of tradition, who opened the door to prosperity and stability? Or did he destroy more than he created and has he summoned into being spirits that today he possibly would be gladly rid of? It is difficult to make a simple answer to these questions. A fair judgment would have to take into account not only the manifold talents and personal charm of the man, but would require also the dissection of issues which have nourished most of the economic controversies of our time and which have given even the experts pause. We may begin by noting a characteristic trait of this animated, impulsive, and artistically sensitive man: his virtuoso-like ability to change positions on important questions, positions which he had only shortly before defended with intelligence and vigor."

"Later economists continued to hew a revisionist line, maintaining absurdly that Keynes was merely a benign pioneer of uncertainty theory (Shackles and Lachmann), or that he was a prophet of the idea that search costs were highly important in the labor market (Clower and Leijonhufvud). None of this is trie. That Keynes was a Keynesian—of that much derided Keynesian system provided by Hicks, Hansen, Samuelson, and Modigliani—is the only explanation that makes any sense of Keynesian economics. Yet Keynes was much more than a Keynesian. Above all, he was the extraordinarily pernicious and malignant figure that we have examined in this chapter: a charming but power-driven statist Machiavelli, who embodied some of the most malevolent trends and institutions of the twentieth century."

"Keynes turned the question back again. He started thinking in Ricardo’s terms: output as a whole and why worry about a cup of tea? When you are thinking about output as a whole, relative prices come out in the wash — including the relative price of money and labour. The price level comes into the argument, but it comes in as a complication, not as the main point. If you have had some practice on Ricardo’s bicycle you do not need to stop and ask yourself what to do in a case like that, you just do it. You assume away the complication till you have got the main problem worked out. So Keynes began by getting money prices out of the way. Marshall’s cup of tea dissolved into thin air. But if you cannot use money, what unit of value do you take? A man hour of labour time. It is the most handy and sensible measure of value, so naturally you take it. You do not have to prove anything, you just do it."

"This seems to me Keynes's important contribution to economics: that he asked a number of very fundamental new questions. He asked what determined the level of employment. He asked whether the economy was inherently stable at the level of full employment, automatically returning to it when disturbed. He asked, as I say, how the rate of interest is determined. These questions remain with us, and will and must remain, central to all economics."

"The consequences of Mr. Keynes's attack upon orthodoxy are very far reaching. First, it cuts the ground from under the pretended justification of inequality, and allows us to see the monstrous absurdity of our social system with a fresh eye."

"Keynes was in his most lucid and persuasive mood; and the effect was irresistible. At such moments, I often find myself thinking that Keynes must be one of the most remarkable men that have ever lived—the quick logic, the birdlike swoop of intuition, the vivid fancy, the wide vision, above all the incomparable sense of the fitness of words, all combine to make something several degrees beyond the limit of ordinary human achievement."

"Here was Keynes at his best and his worst. His worst, because some of his social and political theory would not stand too close scrutiny; because society is not likely to run out of new wants as long as consumption is conspicuous and competitive; and because, as an undergraduate once remarked, democratic government is more than a gathering of benevolent Old Etonians. His best, because of the roving, inquiring, intuitive, provocative mind of the man."

"1919...Henri Bergson, Karl Barth, Ernst Cassirer, Havelock Ellis, Karl Jaspers, John Maynard Keynes, Rudolf Steiner—indelible figures—were all active in their various spheres."

"Keynes is very helpful about the economics of the New Party. He says that he would, without question, vote for it. The attitude of the Labour Party on...Free Trade, has disgusted him. He feels that our Party may really do an immense amount of good and that our programme is more sound and certainly more daring than that which any other party can advance."

"A criticism of Keynes and Hayek would have to begin by pointing out the fact that in their theoretical systems there is no place for the uncertainty factor and anticipations. … It is good proof of Keynes’ intuitive genius that he reaches practical results that in many respects are very much superior to his deficient statements of certain theoretical problems."

"Fascism entirely agrees with Mr. Maynard Keynes, despite the latter's prominent position as a Liberal. In fact, Mr. Keynes' excellent little book, The End of Laissez-Faire (1926) might, so far as it goes, serve as a useful introduction to fascist economics. There is scarcely anything to object to in it and there is much to applaud."

"Have you read Keynes on the Economic Consequences of the Peace Conference? I think it is important as giving in a clear and definite form the criticism of a Liberal-minded man who saw the proceedings from the inside... I can not help thinking that it really gives the scheme of a bold Liberal policy in foreign affairs. Aim, the re-integration of Europe, both political and economic. Method, the correction of the Versailles settlement by the L[eague] of N[ations.] [I]t gives us a real fighting policy which has the further advantage of being right."

"The background of my economic thinking was first developed by a study of Keynes—more in conversation with him than in reading his early writings, for he did not write General Theory until the thirties. ... I sent the [Mosley] Memorandum to Keynes for his comments...Keynes then 'with Mosley's permission, showed it to Hubert Henderson, they both agreed "it was a very able document and illuminating"'. Keynes supported me throughout this period, and even later went so far as to say to Harold Nicolson he would have voted for the New Party. My own memories of this brilliant and charming person with the gentle manner and razor-keen intelligence, consist mostly of lunches in his house."

"I have concentrated thus far on one aspect of achievement: the creation of a theory or theories, which in some form pass into the standard usage of economists. But with Keynes, and with other economists, theories were not the whole story. Keynes was also an applied economist using the existing body of theory in conjunction with the available facts of the world to try to shape certain outcomes, be they the international monetary system in 1931–2 or 1941–6, or the financial policy of the British Government in 1915, 1929–33 or 1940–6. And shape them he did with some success through various forms of private and public persuasion. How he did so and why he did so are also subjects for historians of economics, not to mention biographers, who may in the process of writing a biography have acquired additional perspectives."

"Victorian changes in the University had brought his parents to Cambridge. The further transition from the last Victorian reforms of the 1880s to the modern state-supported institution that emerged after the First World War encompassed both Neville and Maynard Keynes’s connections with the administration of the University. For this reason it is necessary to provide some institutional background against which the Keyneses’ lives and times can be set."

"There is a paradox in Keynes's fall in esteem. With respect to our economy, Keynes set out to explain two main problems: why our economy was given to fluctuations and whether it was possible to achieve a closer approximation of full employment than had been achieved thitherto. Keynes's answer to the policy question was that government expenditures and tax receipts could serve as a steering wheel, and that one requisite for such a steering wheel to be effective is that government be a bigger part of the economy than it was before the Great Depression. Our success since World War II in avoiding anything more severe than the recession of 1981-82 has been due in large part to the effects of our much bigger government."

"Keynes believed that the policy implications of his theory were profound; not only did the theory point to ways in which a closer approximation to full employment can be sustained, but he envisaged that continuing full employment combined with an emphasis on consumption and public goods would lead to an egalitarian change in income distribution. The rentier income of the capitalist would disappear and the upper tail of the income distribution would be snipped off by taxation. He believed that both measures to raise the consumption function and the socialization of investment were necessary to sustain full employment and were desirable as social goals."