Like a gothic cathedral completed over long generations, Robert Skidelsky's Keynes is a mighty edifice, dominating the surrounding landscape. But times have changed since the plans were drawn up, and the architect has changed as well. When he started 20 years ago, Skidelsky was a mischievous young radical, whose greatest delight was to twist the establishment's tail. Now he is a middle-aged Tory peer hurrumphing at the follies of the centre-left. Inevitably, the hardening of his political arteries has affected his approach to his subject. The trajectory followed by his Keynes-from daring intellectual saboteur to sedate and moderate conservative-is too reminiscent of his own to be altogether convincing. Thankfully, however, his literary powers are undimmed. No recent British biographer can boast a feat to equal his. Martin Gilbert's life of Churchill is longer and presumably needed even more stamina to write, but it is little more than a chronicle of events. Skidelsky's three volumes are all beautifully written, full of human sympathy and marvellously alert to the subtleties of the intellectual and cultural context. The second-dealing with Keynes's career from 1920 to 1937-was a tour de force, at one and the same time a captivating portrait and a masterpiece of cultural and intellectual history.
Yet after reading the third volume I could not help wondering if the scale of the edifice might be out of proportion to the importance of the subject. Keynes was indisputably a great man, with a touch of magic about him. He had an original and fertile mind, immense self-confidence and a beautiful prose style. Unlike many daring intellectual saboteurs, he was also a deft operator in the courts of the powerful. His young academic followers loved him, and by the end of his life he had bewitched the dry-as-dust Treasury mandarinate as well. But was he great enough to justify the heroic perseverance displayed by his biographer, and the mammoth final product? Does he really deserve 20 years of Robert Skidelsky's life?
The whole architecture of the biography-the scrupulous, loving attention paid to the details of Keynes's homoerotic life in volume one, for example, or the similar attention devoted to his financial affairs in volume two-implies that he was a figure of such importance that anything that might throw light on his personal development or character deserves to be explored. When Skidelsky started work that must have seemed almost self-evident. Though it is clear in retrospect that the high noon of the Keynesian era had passed some time before, the encircling dusk was not yet apparent to the custodians of the Keynesian social-democratic settlement. For the British centre-left and centre-right, Keynes was still the Sir Galahad who had found the Holy Grail: the Darwin or Copernicus of an intellectual revolution which had brought sweetness and light to the dismal science, and laid the foundations of a middle way which would continue into the indefinite future. If the Keynesian system was under attack from neo-liberals on the right and neo-socialists on the left, that only proved that folly and malice had not yet been eradicated.
By the time Skidelsky's second volume appeared, encircling dusk had given way to blackest night. The Keynesian era belonged to history. The dismal science was back in business. New Right neo-liberalism was the wave of the future almost everywhere, and reigned triumphant in Britain, the US and Australasia, to say nothing of the institutions of global economic governance like the IMF and the World Bank. Social democrats and social liberals vied with conservatives in their enthusiasm for the bleak Victorian gods whom Keynes had supposedly dethroned. But the literary skill and psychological insight of Skidelsky's second volume overwhelmed any nagging doubts about the real historical significance of his subject. No one concerned with the history of ideas or the role of the intellectual in public life could fail to be excited by the complex story of how the Keynesian paradigm took shape, told through the life of its central figure. In all the excitement it was easy to forget how problematic its influence really was.
With the publication of volume three, covering the decade between the General Theory and Keynes's death in 1946, the biography stands as a whole; and the nagging doubts that volume two's excellence pushed into the background return to the centre of the stage. One reason is that volume three does not live up to the high expectations created by volume two. Not that Skidelsky's hand has lost its cunning. His skills as a biographer and intellectual historian are still abundantly in evidence. His treatment of Keynes the man-and his marriage to Lydia Lopokova-is judged as beautifully as in the previous volume. Keynes's magic still haunts the narrative. But the pace, ?lan and sheer intellectual exuberance of volume two are missing. By the end it is hard to avoid the impression that Skidelsky has become a little bored with the subject and wants to get to the finishing post as soon as he decently can.
More fatally still, the crucial issues raised by the culminating stages of Keynes's career, when he was Britain's chief negotiator at the 1944 Bretton Woods conference (which was supposed to lay the foundations of the post-war monetary system) and in the Anglo-American talks which settled the terms of the 1945 American loan, are not faced head-on. Yet Keynes deceived himself disastrously about both. He may have been "fighting for Britain," as Skidelsky insists in his subtitle, but if so he lost. The Bretton Woods agreement had little in common with his vision of a multilateral global economy managed on Keynesian lines, in which the economically strong would be unable to force deflation on the weak. It was an expression of US power, deployed for US ends; and it was designed to pave the way for an American economic imperium, based on a latter-day version of the gold standard. The same was true, even more obviously, of the loan. The negotiations were like drawing teeth. With immense difficulty, the British managed to wrest a palpably inadequate sum, accompanied by a potentially crippling commitment to sterling convertibility after a brief transition period.
These defeats may have been inevitable (though that should not be taken for granted), but even if they were, a stubborn question remains. Not only did Keynes have one of the most brilliant minds of his generation, he also had plenty of experience of negotiating with the Americans. No one was better placed to know that a central theme of American wartime financial diplomacy was an indefatigable determination to undermine the protective barriers that sustained Britain's capacity for independent economic action, to penetrate Britain's export markets and to ensure that the post-war economic order was shaped by American interests. How could he have persuaded himself that Washington would suddenly change its spots? That Uncle Sam, the hard-faced Yankee trader he had faced in the negotiations over the Lend-Lease agreement in the earlier stages of the war, would miraculously become an enlightened liberal internationalist, eager to make the world safe for the Keynesian vision of global economic justice and rationality? Above all, how could he have persuaded himself that the defeats he suffered at Bretton Woods and in the loan negotiations were really victories? That question lurks between the lines of Skidelsky's narrative, but it does nothing more than lurk. It should have been explored in all its full brutality.
A deeper and more awkward question lurks behind it. Was Keynes really "fighting for Britain" at all? Or was he fighting for a particular vision of Britain and-still more perhaps-for a particular vision of the global political economy, to which alternatives might have been found? Stripped of Keynes's own seductive rhetoric, and the complementary rhetoric of a generation of Keynesian historians and commentators, this part of his career yielded two accomplishments. Thanks largely to him, the true nature of the US-dominated economic order agreed upon at Bretton Woods was coated with a liberal-internationalist top dressing, while the Americans' insistence that Britain should bow its knee to the imperatives of that order was concealed by the comfort blanket of an illusory special relationship. Keynes lent liberal-internationalist respectability to a settlement shaped by the demands of American nationalism. Ironically (though perhaps logically), opposition to it came largely from crusty British economic nationalists, like Lord Beaverbrook and the Bank of England, and fundamentalist socialists, like Aneurin Bevan and Emanuel Shinwell. Middle opinion followed Keynes into an obfuscatory fog of sentimentality and wishful thinking.
On the level of immediate practice, this hardly mattered. Worldwide dollar famine made the fundamental Bretton Woods commitment to multilateralism and non-discrimination inoperable. (And in any case, two years later cold war pressures led the US to start the Marshall Plan, substituting aid for multi-lateral trade as the centrepiece of external financial policy.) By 1947, the original Bretton Woods agreement was a dead letter. Meanwhile, Britain frittered away the loan, mostly on overseas military expenditure. The convertibility conditions attached to it had to be suspended within weeks. But on the deeper level of mentality and assumption, this still mattered. Sentimentality and wishful thinking about US priorities and Anglo-American relations were endemic in post-war Britain. As Tony Blair and Gordon Brown prove almost every week, they still haunt Whitehall and Westminster today. British government after British government has persuaded itself that Britain has a special place in American hearts, that US power can be relied upon to underpin British power and-most insidiously of all-that American interests coincide with the interests of the whole democratic world. British government after British government has concluded that the only feasible or desirable role for Britain is that of chief subaltern in the American imperium; and that courses which might be at odds with that role must be ruled out a priori.
It would be absurd to suggest that this was Keynes's exclusive doing. The British political class hungered for the illusion of great power status; and the imaginary special relationship with America was the best available proxy for greatness. Propped up by American power, Britain could still swagger about the world-a poodle pretending to be an Alsatian. That would have been true even if Keynes had never been heard of. But if Keynes had returned from Bretton Woods or the loan negotiations with no agreement it would have been much more difficult for the British to deceive themselves. Counter-factual history is never more than an intellectual parlour game, so we cannot know what would have happened had he done so. What we do know is that in 1944 and 1945 Britain faced a fork in the road. Keynes's path led to self-deceptive subservience to American hegemony. The question that Keynes's biographer ought to have asked-recognising, of course, that there can be no definitive answer-is where the alternative would have led us.
Not the least of Keynes's achievements was to persuade his civil-service colleagues and his political masters that the skies would have fallen in. But it is not clear that they would have done. The alternative to the Bretton Woods agreement was no agreement. Since Britain stood to lose more from the agreement than it gained-certainly in the short term-that would not have been a disaster. Similarly, the alternative to the loan was no loan. That would have meant some difficult belt-tightening. It might have required the delay or scaling down of some of the Labour government's welfare reforms; and it would certainly have been necessary to cut military expenditure overseas. But that might have forced badly needed rigour on a government incorrigibly reluctant to cut its political coat according to its economic cloth.
The non-Keynesian path might have led, after a time of trouble even harsher than that actually experienced by the post-war government, to a less sentimental, less comforting, but more grown-up understanding of the realities of power in the post-war world and of the threats that those realities posed to British self-determination. Britain's political and economic leaders might have realised that as a great and rising power, with no sense of obligation to a declining Britain, the US was bound to seek hegemony, not partnership-not because there was anything peculiarly wicked about American civilisation, but simply because that is what rising great powers do. Conceivably, some of them might they have bothered to read some American history, and might have seen that America's expansion across the continent was powered by a surging nationalism whose apogee was yet to come. If they had realised all this, might they have viewed the US in a harder-edged, more cynical fashion, more akin to that of the cynical and unsentimental French? Skidelsky doesn't know the answer to that question, any more than I do. But, as Keynes's definitive biographer, it was up to him to ask it.
The story of Bretton Woods and the loan also raises a deeper and more complex question about the relationship between Keynes's political values, economic doctrines and policy priorities. As Skidelsky has shown in earlier volumes (and in many essays and lectures), Keynes's purpose was to reconstruct liberalism. Because he recognised that liberalism and capitalism were indissolubly connected, he also sought to save capitalism. He imagined that he had saved it on the national level in the General Theory. The essence of the project set out there lay in two complementary propositions. The first was that the built-in propensity of a capitalist economy to underemployment could be corrected only by unceasing macro-economic intervention, carried out by an enlightened technocratic mandarinate working through the agency of a compliant state. The second was that the intervention in question would be as limited as it was powerful: that the role of the mandarins was to pull the right macro-economic levers, and to put the economy on an even keel, leaving the allocation of resources to market forces as in the classical system.
But the General Theory was silent on the global political economy-understandably, since the issues of global economic regulation which had preoccupied governments in the 1920s had apparently ceased to count in the world of Hjalmar Schacht and Franklin Roosevelt for which it was written. The war changed all that. Global economic regulation was back on the agenda with a vengeance. And Keynes now came to imagine that he could reconstruct his version of liberalism, and save the kind of capitalism he believed to be essential to it, on the global level as well-not just as a theorist but as a sort of Platonic philosopher- king. He proposed to do so by establishing an enlightened global technocracy, operating according to Keynesian principles. This was hubris on a monumental scale. The Americans were not willing to kowtow to a British philosopher-king, however clever; nor were they willing to abandon their hegemonic ambitions for the sake of enlightened liberal internationalism. They were liberals, to be sure, but national liberals, not international ones.
Keynes was defeated, in short, because he did not (perhaps could not) take adequate account of the realities of power and of the pursuit of power. In that he was typical of the tradition of economic liberalism which had formed him. Like many economic liberals, Keynes clearly disliked politics. The rough and tumble of Westminster-and the even less decorous rough and tumble of Capitol Hill-seemed to him crude, ugly and, worst of all, stupid. The point of the Keynesian Revolution was not to subordinate economics to politics, far from it. In the crucial macro-economic sphere, a disinterested and impersonal technocracy was to take the place of the self-regulating and impersonal free market of old days. But, in one crucial sense, the new technocracy served the same purpose as the old self-regulating market. It was there to protect the mainsprings of the capitalist economy from democracy's grubby paws.
It couldn't be done, of course. The notion of an apolitical and disinterested technocracy is a myth, a Platonic Noble Lie. The technocrats were bound to have their own political values, and these values were not always identical as anyone who looks at the Treasury papers in the Public Record Office will soon see. More important still, democracy's grubby paws could not be kept at bay once it had become clear that matters of such political contention as the level of unemployment, the exchange rate of the pound and the rate of inflation were now politically determined. That much is obvious; and Skidelsky has himself made the point on numerous occasions, with impressive force. What is less obvious is the relationship between all this and Keynes's conception of economics. Unlike his great contemporaries, Joseph Schumpeter and Friedrich von Hayek, Keynes had abandoned the classic tradition of political economy exemplified by such giants of the past as Adam Smith and Karl Marx. He did not see the polity and the economy as a seamless web. He saw them as separate and autonomous realms; and deep down, I suspect, he thought the former had no business to trench on the latter. Yet, as Marx, Schumpeter and Hayek all knew in different ways, the history of capitalism is, above all, the history of political economies.
That helps to explain the contingent, time-bound nature of Keynes's achievement. Great man though he was, he has worn much less well than Marx, Schumpeter or Hayek. The Keynesian system was static, not dynamic. It was a system for the age of Fordist mass production, with its giant plants, giant unions and "sticky" wages, not for ever. In it there is no sense of the transformative energy of capitalism-of the restless, unsleeping urgency of its constant search for profit; of its endless capacity for creative destruction; and of the recurrent waves of technological innovation and socio-economic change to which these periodically give birth. Yet technological innovation and the resultant reordering of the labour market and the class structure played a much larger part than policy failure in undermining the Keynesian paradigm in practice. If only Skidelsky had devoted 20 years of his life to Marx!
