The continued slur against Keynes
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