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Keynes Ideas After the First World War

What Impact did the First World War have on the development of Keynes's Ideas?

John Maynard Keynes (1883-1946) is one of the most prominent figures in the study of the field of Economics. However I do not specifically regard Keynes as strictly an Economist, this is because if you look at his early life, he was greatly influenced by G.E. Moore. From reading Keynes, My Early Beliefs, he found a new religion, in the sense of what the real purpose of life is for him. From Moore's influence he found out that the most vital importance to him was the States of Mind and the human relationships that co-exists from it. Keynes graduated from Cambridge with a Mathematics degree and was part of the "Bloomsbury group". This was a very elite and secret group and they use to talk about their experiences through the influence of Moore. Hence his morality and Ethics is very central to Keynes's Economics.

The war had a large impact on Keynes's ideas. He resigned from the Treasury because he did not agree with the Allies the method and the amount Germany should pay. So he wrote a book called the Economic Consequences of the Peace (1919) and from that you can see the impact the War had on his Ideas. He believed that Germany should be given hel


p in rebuilding the Economy, and he also believed that it was not morally right for the German people to suffer. His ideas also developed to believe that Europe works, as a family hence if you destroy one you will destroy most of them. Therefore Keynes gives alternative solutions for the Reparations, and also believes in a free trade union. Keynes's is concerned for the redevelopment of the Economies of Europe and advocates a large loan from the Americans.

Keynes believes that the restoration of Europe can only be reached with the Allies support of each other. He believes that they should be generous and cancel the Inter-ally indebtedness (Keynes: 1919:22). The generosity lies with America, because America is the only one with the wealth that can help Europe. If this does not happen Keynes ideas have developed to believe that the Allied countries have to pay back what they borrowed from each other, and they can only do this if they ask for a higher amount of Reparations from Germany. All the Economies will face destruction hence requires the generosity of the Americans (Keynes: 1919:25). This generosity from the Americans is a loan only and he believes that it should be paid back in full and the way to determine the authenticity is through receipts so that it is efficiently recorded.

Hence his ideas further developed after the War on Money, inflation, and also deflation. He believes that governments should be strong and not allow their Economies to face these situations. He puts the central focus on Money and the psychological forces behind it. Also his ideas on Liberalism developed, in his belief that the state should provide Liberal protection, however controlled fully by the elite's.



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