The continued slur against Keynes

May 6, 2013

Harvard professor Niall Ferguson’s belief, caught on the hop, that John Maynard Keynes’s homosexuality and lack of children led to recklessness when it came to the effects of his economic theories is widespread among conservatives, though few are foolish enough to express it out loud. At a conference in California last week, the prolific contrarian Ferguson “asked the audience how many children Keynes had. He explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of ‘poetry’ rather than procreated.” Keynes’s lack of children and grandchildren, Ferguson implied, is why he blithely proposed large-scale long-term debt.

After a barrage of complaints, Ferguson – an economic adviser to John McCain, a conservative Newsweek/Beast blogger (typical headline, “Hit the Road, Barack”) and, between book tours and big-fee speaking engagements, sometime history professor at Harvard – was obliged to issue an abject apology. “It is simply false to suggest, as I did, that [Keynes’s] approach to economic policy was inspired by any aspect of his personal life,” he bleated. “My colleagues, students, and friends – straight and gay – have every right to be disappointed in me, as I am in myself. To them, and to everyone who heard my remarks at the conference or has read them since, I deeply and unreservedly apologize.” Brenda Lee could not have sung it better.

Ferguson’s retraction appeared to be more to save his skin than to confess his many errors. While Harvard may tolerate an historian who regularly misrepresents macroeconomics, to smear the greatest economist of the twentieth century for being gay and without issue may well jeopardize his valuable tenure. (Ferguson can afford to lose both gigs: his jobs portfolio also includes: a chair at the Harvard Business School; membership of the faculty of Harvard’s Minda de Gunzburg Center for European Studies; a chair at Oxford University; a fellowship at the Hoover Institution at Stanford; a post with the British Conservatives advising on history syllabuses in schools; and an “advisory fellowship” at the Barsanti Military History Center at North Texas University.)

Ferguson’s “apology” is hard to credit because he has suggested before that Keynes’s economic advice to a succession of British prime ministers over 30 years was inspired not so much by the brilliance of his mind but by his homosexuality. Ferguson wrote that Keynes’s private opposition to World War One – despite his distaste for the slaughter, Keynes loyally worked for the British Treasury throughout, negotiated American loans that funded the Allied war effort, and advised against the disastrous Treaty of Versailles – was because “the war itself made Keynes deeply unhappy. Even his sex life went into decline, perhaps because the boys he liked to pick up in London all joined up.” The problem with flip history is that eventually those who hold the purse strings catch up with the backlog of nonsense. Cheap shots can turn out to be expensive.

So, what’s the truth? For the first half of his life, Keynes was exclusively homosexual. Notwithstanding the illegality of all gay acts in the UK at the time, he was promiscuous. He used to keep a book in which he listed boys he had had and boys he would like to have. He did not disguise his tendencies and the political leaders he mixed with knew he was gay.

As the member of the Bloomsbury group whose sound investment advice allowed his friends the freedom to write and paint, he was an aesthete who felt no shame about his love of men. Then he met, fell in love with, and four years later married Lydia Lopokova, a ballerina from the Sergei Diaghilev’s Ballets Russes. They tried to have children. Lydia miscarried. When the tactless alluded to their lack of progeny, the gallant Keynes – ennobled in 1942 as Baron Keynes – would say, “I am the Barren Keynes.”

What has any of this to do with Keynes’s genius that transformed economics forever? Nothing. Unless you are looking for shabby ways to discredit him and diminish his towering achievement. Ferguson is not the first to cast aspersions on Keynes’s economics by a sly, sniggering reference to his unashamed bisexuality. Kenyes’s nemesis Friedrich Hayek, who has become a saint among conservatives for his effort, albeit failed, to derail Keynes as he was formulating the revolutionary General Theory, used to allude to the “immorality” that underpinned Keynes’s life and therefore his views on economics.

Unlike Ferguson, Hayek was too smart and perhaps too well mannered to spell out exactly what it was about Keynes’s personal ethics that helped liberate economics from the earth-bound logic of microeconomics. Perhaps Hayek was inhibited by his own morality. Despite his fastidious approach to life and his (lapsed) Catholicism, Hayek abandoned his wife and two children on the day after Christmas to start a new life with an old flame.

After taking a hastily arranged job in Arkansas to obtain a speedy no-contest divorce, he exiled himself to the United States – a country he never took to – to dodge his liabilities. Hayek was a cad. Yet I have never heard a Keynesian use Hayek’s lack of personal ethics as an excuse to damn his thinking.

In answer to a question about Keynes’s remark that “in the long run we are all dead,” Ferguson wrenched the quote out of context. He made out that Keynes had little concern for long-term debt because he was gay and childless, so did not care what happened in the long run. In fact, as any Harvard Economics 101 student might have told him, Keynes was alluding to the elusive “equilibrium” of full employment and high growth promised “in the long run” by those who put their faith in the untrammeled market but that never came about, however long the run.

As Keynes argued, even if the equilibrium were to arrive “in the long run,” it would be far too late for the millions of families in the 1920s and 1930s broken by long term joblessness. Taunting free market advocates with their own expression, he insisted it was necessary to find a quicker solution because “in the long run we are all dead.” To deliberately misquote Keynes is to willfully distract from the truth and topicality of his observation.

Hayekians allude to a paradise lost, a pre-Keynesian Eden where “natural” economic forces come to rest in the best of all possible worlds: full employment, high growth, and high profits. Yet Ferguson, an economic historian, not an economist, must know that in the Hayekian idyll before Keynes’s General Theory, “natural forces” resulted in violent swings in the business cycle and a series of catastrophic booms and busts. Businesses went under by the thousand, banks sank by the score, taking with them the life savings of thrifty families, and tens of millions were thrown out of work.

It was in disgust at the sordid consequences of the free market, and an urge to save sinking capitalism from a socialist revolution, that Keynes applied his brilliant mind to making economics work for the good of the people, their children and their grandchildren. As Ferguson surely knows, Keynes did not advocate long-term large-scale public borrowing; on the contrary, he said borrowing should be paid back as soon as the recovering business cycle began its upswing.

More productive than trying to link Keynes’s sexual behavior 100 years ago to today’s concern about the scale of government borrowing, Ferguson and his kind might do better to explore the psychology that inspires those who viscerally support Keynesian remedies as compared to those, like them, who attach their faith to long-gone certainties. Keynes wrote that those who believe a bad economy can be cured by austerity are inspired by subconscious sadomasochism. By contrast, he was an unapologetic hedonist who, when asked whether he had any regrets, said yes, he had not drunk enough champagne.

Nicholas Wapshott is the author of  “Keynes Hayek: The Clash That Defined Modern Economics.” Read extracts here.

PHOTO: Niall Ferguson, a British historian, addresses the financial collapse of 2008 at the Newseum in Washington, October 1, 2009. REUTERS/Jonathan Ernst


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Posted by Wilkinson | Report as abusive

I wasn’t aware that the effects of Keynes were economic theories were considered “recklessness”, except by the neocon morons who are driving this country straight into the ground, just as they did back in the good old days before crashing it in 1929 due to their “irrational greed”.

As you say, “More productive than trying to link Keynes’s sexual behavior 100 years ago to today’s concern about the scale of government borrowing” is to expose these people for what they are.

Instead, what you have done is to raise a “straw man” for the ignorant masses to hate, thus enabling his detractors to gain more power.

With “friends” like you, Keynesian economics doesn’t need enemies.

How about telling the truth about the neocons who are attempting to discredit and destroy Kenyes work for their own purposes.

Whose side are you really on?

Posted by PseudoTurtle | Report as abusive

“…before Keynes’s General Theory, “natural forces” resulted in violent swings in the business cycle and a series of catastrophic booms and busts. Businesses went under by the thousand, banks sank by the score, taking with them the life savings of thrifty families, and tens of millions were thrown out of work.”

It would appear, then, that the most violent and longlasting of these “natural forces” resulted from fundamental economic changes to society such as the mechanical loom, the automobile and the tractor on the farm; plus related economic “aftershocks”. Those who could picture the long term significance of these things generally did well in “surfing the future”.

Those who would not or could not accept that the “world was changing” got crushed in the process. Collateral damage. Sad, but inevitable. “Social Darwinism”, or “survival of the fittest? Yep! Nothing new here! Even those on the right track get run over of they just stand there.

“It was in disgust at the sordid consequences of the free market, and an urge to save sinking capitalism from a socialist revolution, that Keynes applied his brilliant mind to making economics work for the good of the people, their children and their grandchildren.”

Please. “Economics”, the “dismal science”, works for no “special interest”. It embraces all processes…those that work, those that don’t and those theories of dreamers that may or may not at ant given point in history. Seeds require rather specific conditions if they are to sprout, grow and be harvested.

Capitalism, the most historically productive of these processes, is a great force best harnessed and intelligently applied. Those who invest in the best harness generally get the best result.

Ambition, money, intelligence, effort and persistence must be “brought to bear” in one direction. And the “right” direction must NEVER be compared to unproved or unprovable theory but only to actual results. The perfect must not be the enemy of the good.

Posted by OneOfTheSheep | Report as abusive

Keynes’ aggregate economics has enabled power hungry academics, politicians and bureaucrats by allowing them the pretense of an ability to engineer the economy for the rest of us unenlightened imbeciles. This pretense could not be further from the truth and those who adhere to it demonstrate a profound lack of appreciation of the myriad individuals participating in the economy by reacting to their particular circumstances. Keynes’ sexuality is irrelevant but his disastrous ideas are not. I am comforted by the fact that in the long run, Keynes is still dead.

Posted by carruth | Report as abusive

I will take exception to the comment that Keynes personal life did not influence his economic theories. Of course it had an influence, as it would with any individual. It’s just a question to what degree.

Interesting that when reviewing economic theory in the 1970’s Econ 101, Keynes sexual orientation or lifestyle was never raised as a factor in any discussion. We focused on his theory only. Either it was totally ignored or was not germane to the conversation. One can only presume the latter.

It is important to remember that Keynesian economics is a theory, along with dozens of other economic theories. They are all wrong as often as they are correct in the application and analysis.

The problem in this country is that we are attempting to centralize economic planning inside the Beltway–influenced by 536 politicians–who egos do not allow them to acknowledge that it is impossible to plan a $15 trillion economy. Left to its own designs, with a reasonable level of regulation, the economy is self-correcting and will direct resources efficiently–with corrections along the way.

However, when Congress implements (corrupted) legislation with the objective of engineering the economy, addressing societies ills, and manipulating the natural flow of funds via taxation and regulation, (see CRA, Dodd-Frank, and Sarbanes-Oxley, FNMA, FMAC among others) you end up with the debacle of 2008, and the 2% annual growth rates of 2011-2013.

Posted by COindependent | Report as abusive

@Pseudo. “neocons and …their irrational greed”? You make the assumption that only conservatives are capable of gaming the system and exploiting their influence; notwithstanding that many of the far left are part of the so-called 1%. See Penny Pritzker, Harry Reid, Nancy Pelosi’s husband, and John Corzine to start.

Besides, one professor who speaks out regarding Keynes sexual orientation and lifestyle, only speaks for himself and no one else.

One can be a classic liberal while embracing the Austrian economic theory very easily. It’s merely an alternative theory, with no intention of “destroying Keynes”. Even F.A. Hayek acknowledged he could not embrace political conservatism in it’s totality.

Posted by COindependent | Report as abusive

Funny the post above mine does not mention glass-steagal. Selective history like this is the problem, not a solution.

Imagine the tinfoil it takes to make a hat big enough to blame sarbanes–oxley and dodd-frank for the financial crises we now face? give your head a shake, or at least attempt to provide some justification.

Posted by Benny27 | Report as abusive

@ COindependent —

I stand corrected!

Greed is indeed an “equal opportunity employer”.

However, arguing that only one professor speaking out regarding Keynes sexual orientation — granted that this news should come as no surprise to anyone who has researched Keynes and his economic theories — is not misusing his position to deliberately reach out to those not in economics is an attempt to taint Keynes’ theories to the general public, is ignoring the source.

If a Harvard professor unwisely made such comments in terms of Keynes in terms of his race, for example, assuming that Keynes was not of the white English establishment, he would be “tarred, feathered and run out of town on a rail”, and you know it.

To dismiss such remarks from a Harvard professor is to allow prejudicial remarks from an authoritative source go unchallenged.

No doubt, being a member of the wealthy set yourself, you wouldn’t mind this, but to use a metaphor from baseball, a “foul ball is a foul ball” no matter how you look at it.

You cannot expect to score with a foul ball, but that is what you are arguing.

In this case, “foul” should retain its non-baseball meaning, which is “grossly offensive to the senses; disgustingly loathsome; noisome: a foul smell”, but the author chooses instead to “pass along” this “foul ball” to the economically uneducated masses, thus aiding and abetting what has happened.

To me, a major journalistic faux pas.

But, hey, Reuters plays by their own rules anyhow.

So how can really expect the truth? Right?

Posted by PseudoTurtle | Report as abusive

It would be nice if we finally recognized once and for all that the Chicago School of Economics thought has done far more harm than good. Even their idol, the Scottish father of economics, felt that banks were too important to leave unregulated. Not so for these clowns, and we consequently ended up with the worst economic downturn since the Great Depression. But it isn’t just the neocons who have been drinking the Kool-Aid, it’s been liberal politicians, as well.

It’s too bad Keynes isn’t alive today, but Paul Krugman is no slouch, either. Now, if only enough people would listen to reason instead of confining themselves to misguided ideologies, we could escape the carnage of the neocons faulty economic theories and turn this economy around quickly to end the needless suffering.

Unfortunately, it looks like conservatives are bound and determined to make sure the innocent pay for the crimes of the guilty, which also happens to be those toward the bottom forced to sacrifice greatly while those at the top bearing most of the responsibility suffer little or not at all for their unmitigated greed. Nothing new there–Republicans have been playing that game for years. Putting ideologies ahead of the good of the citizens they represent is also expected with these jokers. What is surprising is that such a large segment of the current crop of American voters hasn’t yet wised up to this dog and pony show.

Posted by wilywascal | Report as abusive

@ Psuedo. Assuming one is “wealthy” and positioning your response accordingly is jumping the shark. Stay on point and refrain from the direct and indirect attacks. “wealthy” –far from it, still working, with a mortgage.

And, the author did challenge the Harvard professor–which was the point of the article.

Posted by COindependent | Report as abusive

Excellent job of logically tying together verifiable facts and history! Then, for those with other dimension ideologies – the imagination, not real dimension – facts and real history are all nonsense as they follow the Palin Rule: “If you don’t know something, just make it up!” That seems to be the mantra of the viewers of Faux News as well.

It is such a joy to experience someone who can still reason and is willing to share.

Posted by ptiffany | Report as abusive

@ COindependent —

Pardon me for MY faux pas.

I assumed from some of your previous responses you were.

I must say, though, aren’t you a bit touchy where no harm was meant?

Virtually all of my comment was directly on target, with a bare mention that you might prefer Keynes being labeled as a gay, due to your previous comments where we have had differences.

Sorry, my mistake.

Posted by PseudoTurtle | Report as abusive

First: it is is: it’s and its: is possessive (I may not be an economist, Coindependent, but grammar does matter).

Next: So which side of the asinine positions of Mark Zuckerberg (a new Koch Brother replica) would H or K be on? Would either of these gentlemen (note no woman in that arena) support raping the countryside via fracking, tucking into virgin Alaska’s Tundra for carbon-poisoning minerals? Or supporting H1 visas while leaving most of the undocumented without help?

A tangential query.

Posted by asmith36 | Report as abusive

COIndependent: perhaps only the wealthy have the unfettered time to weigh in on this debate.

Posted by asmith36 | Report as abusive

@pseudo Therefore, any person who is motivated to get ahead and build a financial base, regardless of whether they are there or not, is automatically considered a person of wealth and subject to attack?

That runs counter to how my family of (legal) immigrants was raised and the reason they came to America in the first place. NB: my grandfather always referred to our nation as “America”, not the United States, as he embraced the American Dream that a person’s ambition is their only limitation.

If the entitlement mentality, and the zero-sum economic philosophy (where one can only create wealth at the expense of another person, as espoused by the President) has served to diminish that, and is cause for unwarranted demonization, then the future is bleak. However, I am not drinking the statist kool-aid.

Posted by COindependent | Report as abusive

“Keynes did not advocate long-term large-scale public borrowing; on the contrary, he said borrowing should be paid back as soon as the recovering business cycle began its upswing.”

That’s the key issue with Keynesianism today, better termed as a pidgin “neo-Keynesianism”. It has become an excuse for politicians and crony-capitalists to engage in debt fueled influence peddling and rent seeking. There is no mechanism for thrift during good times that pays back the borrowing used to stimulate out of recessions. Keynesianism in effect cements in place vested interests that do not behave according to efficient market theory.

Posted by mlebauer | Report as abusive