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
He puts the central focus on Money and the psychological forces behind it. This is because he realises that individuals use reason and it is not an automatic response. For Keynes Money and the way it is used is a very central issue. The entrepreneurs will benefit as the prices increases on their goods they will make profits. So therefore the War had an impact on Keynes ideas towards the inflation, money, and deflation. Also a lot of the wealth had been wasted in financing the War, all countries which were directly affected had to borrow large amounts, mainly from America, hence after the War these countries had very little finance to support their Economies. Keynes believes that the money individual posses do not always amount to savings, hence he goes against the Classical Economists the belief of savings always equals investment. Keynes firmly believes that America should cancel the debts owed to them as he says. Keynes's is concerned for the redevelopment of the Economies of Europe and advocates a large loan from the Americans. From chapter 7 of the Economic Consequences of the Peace (Essays in Persuasion) Keynes outlines another way that Germany should pay for its Reparations. He believes that they are a big family and they have gone through different stages together, flourished together, and also been in war together (Keynes: 1919:4). p in rebuilding the Economy, and he also believed that it was not morally right for the German people to suffer. After the War Keynes resigned this post, this is because he did not agree with the Allies on the method they proposed for Germany to pay back (Reparations), for what she owed. In regards to deflation his ideas have developed to believe you have to spend and invest, to rebuild the Economy. How will America sell their products to the European countries if they do not have any capital to buy the products.
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