Reexamining Keynes

These books bring 20th-century economist John Maynard Keynes into the current economic debate. During the 1930s, Keynes pioneered the concept of governments forcing interest rates low and using deficit spending to stimulate the moribund economy. The work by Clarke (modern history, ret., Cambridge Univ.; The Last Thousand Days of the British Empire) is the most biographical (though none is a true biography), following Keynes from his early life through his role in influencing economic policy during the Great Depression and World War II. Clarke explains Keynes's association with the Bloomsbury Group, his homosexuality, his investing prowess, and how he formulated his theories in response to the economic turbulence of his times. He shows how Keynes was able to change his mind and go in new directions and how he was able to reach out to governments in changing the economic landscape. This is a generally sympathetic portrayal, giving only brief space to Keynes's critics and using academic, but clear, language.

Skidelsky (political economy, emeritus, Univ. of Warwick; John Maynard Keynes), author of the major three-volume biography of Keynes, now looks at how studying Keynes could help with both our current crisis and the study of economics in general. After a too brief biographical profile, Skidelsky goes on to explain that much of Keynes's thinking came from his practical involvement with government and investing, which drove Keynes to seek ways in his theoretical musings to stabilize economic markets. Skidelsky skillfully explains how Keynes's views on human behavior, uncertainty, money, and equilibrium formed the basis of his economic theories. He says that modern economists have relied too much on mathematics to predict what Keynes embraced as uncertainty and that Keynes's ideal of economic fairness has merit today when there has been too much emphasis on the raw accumulation of money.

Lewis (cofounder, Cambridge Assoc.; How Much Money Does an Economy Need?) sets out to refute Keynesian economics and show that it's what has brought the world to the present crisis. Through paraphrasing and verbatim quotations, he presents Keynes's economic arguments from his The General Theory and other writings and then offers counterarguments. Regarding Keynes's proposition that government needs to regulate fairness in the markets, Lewis asks how government officials influenced by politics can truly make things fairer. Lewis extends the debate to the current crisis and says that the low-interest-rate environment promulgated for years by governments was Keynesian and the very cause of the current credit crisis and recession. In the end, he dismisses Keynes as a promoter of false utopian theories. Lewis has done a service, even if in the negative, of concisely and critically summarizing Keynes's economic theories, and his book will make readers think. VERDICT All three books are useful for understanding Keynes. Clarke's is recommended for those seeking to know more about Keynes as an individual, Skidelsky's is for those wanting to dig deeper into Keynes' economic prescriptions as they relate to today, and Lewis's more contentious work is highly recommended to anyone seeking both to understand and to question Keynesian economics.