Nicholas Wapshott

The continued slur against Keynes

Nicholas Wapshott
May 6, 2013 15:27 UTC

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.

Has military Keynesianism come to an end?

Nicholas Wapshott
Mar 15, 2013 15:34 UTC

The outcome of the sequester ultimatum appears to have taken everyone by surprise. Two long summers ago, when the president and House speaker John Boehner conjured a prospect so terrible that even spending on defense would be deeply cut, they both assumed Congress would buckle rather than approve such a blow to the nation’s pride. According to Bob Woodward’s The Price of Politics, Boehner said, “Guys, this would be devastating to Defense. This is never going to happen.”

But neither man appears to have taken account of the clearly stated views of the Tea Party. There are few better ways of appreciating how the Republican Party has transformed in the last two years from a party of defense hawks to a party of deficit hawks than tracking how the sequester has turned from a threat to the nation’s defenses to an unparalleled opportunity to bring the government to heel.

If Obama and Boehner had taken heed of the strident voices offstage, they might have guessed their ostensibly idle threat to the Pentagon would be taken as a chance to reduce the size of the federal government. They didn’t, and the sequester is upon us, promising, according to the Central Budget Office and IMF, to throw 750,000 out of work and slow down already anemic economic growth by 0.6 points. No surprise there: If you take money out of an economy, activity flags and the economy shrinks.

A lost chance to overturn Keynes with the fiscal cliff

Nicholas Wapshott
Nov 9, 2012 23:27 UTC

If free-market economists were serious about their ideas, they would surely be arguing vociferously right now for the economy to plunge over the fiscal cliff. But where are the laissez-faire economists lining up to urge John Boehner to lead his Tea Party tribe in the House to veto all compromise and put our money where their mouths are? They are strangely silent. Instead, the debate is about how Keynesian we should be.

A reminder for those who haven’t read John Maynard Keynes lately, or who have never read Keynes but oppose him anyway out of principle, he was a British math whiz who transformed economics forever with the publication of his “General Theory” in 1936. It suggested three ways to put wind in the sails of an economy in the doldrums. The problem, Keynes suggested, was that there was not enough demand for goods and services, and that governments should take a lead in stimulating spending to encourage business leaders to invest and create jobs.

Keynes’s first prescription was for central banks to make borrowing as cheap as possible with low interest rates. This deters saving and makes new investment in business activity more attractive. Businesses will employ workers who go out and spend their earnings. After studying the roots of the Great Depression, Milton Friedman and Anna Schwarz blamed the economic slump on money being too tight for too long. Such was the fear of returning to the deflationary devastation of the 1930s that successive Federal Reserve chairmen have taken this lesson to heart. Faced with a recession in 2001, even Alan Greenspan, a lover of the free market who flirted in his youth with the Lioness of Laissez-Faire, Ayn Rand, kept money rock-bottom cheap for the whole of the first decade of this century.