The centrality of the Bretton Woods international conference (1944) in the reshaping of international economic and financial institutions in the post-war world has always seemed obvious. In this story Keynes has been recognised as a key player, given his central role as a key advisor of the British government (despite his now precarious health). The mythology of Bretton Woods has often focussed on a supposed clash between a ‘Keynes Plan’ that sought to introduce the concept of ‘bancor’ as an international currency, and a ‘White Plan’ that was the brainchild of the leading US economist Harry White. But this way of telling the story misses the fact that ‘bancor’, for all its suggestive implications, was never put to the conference as an option. Instead we see Keynes – sadder and wiser than in Paris perhaps – accommodating all along to an American view that ‘a deal’ had to be struck. It was one that crucially involved Britain in paying for the benefit of Lend-Lease by adopting the mantra of ‘non-discrimination’. So here is a revealing example of the priority for expediency over truth in a real-world situation.

In a parallel way, when we move to consider Keynes’s political views and involvement, we find a similar reliance upon the privileged networks of his intimates. In particular the relationship between Virginia Woolf and Keynes, as the two figures of real genius in Bloomsbury, is explored – with insights on the impact that her tract Three Guineas had upon his (much-discussed) memoir ‘My Early Beliefs’. Keynes’s political stance is also examined through his proprietorial influence upon the left-wing weekly the New Statesman, of which Kingsley Martin (a close friend of the late Frank Ramsey) was now the presiding editor. What Keynes wrote about uncertainty in decision-making was as relevant to choices in foreign policy as to the macro-economic universe that he surveyed in his General Theory.

At the Paris peace conference in 1919, Keynes served as a member of the British delegation. He often represented the Treasury although himself only a temporary civil servant aged thirty-six. But there were equally youthful members of the US delegation with whom he worked closely, initially in support of the position adopted by President Woodrow Wilson in seeking a negotiated peace with Germany. Hence Keynes’s close contact with both Norman Davis and also John Foster Dulles, then a young lawyer. Their task was to define the ‘reparations’ due from Germany under the Armistice agreement – often called the ‘Lansing Note’ after the American Secretary of State, Robert Lansing, who was Dulles’s uncle.

This concluding chapter naturally considers the long-term impact of the image of Keynes that has been suggested in the substantive chapters. It thus confirms the view that ‘Pragmatic Keynesianism’ had obvious traction in situations where practical expedients are sought in face of economic problems. But it also suggests that ‘Dogmatic Keynesianism’ has insights that can be applied (in a more theoretical sense) in understanding the workings of the economy, with reference to the rival theories of especially Schumpeter, Hayek and Friedman. The abiding concern that Keynes showed with the concepts of probability and uncertainty is highlighted; but also, in a methodological frame, the conclusion identifies intractable reasons why individual economic rationality cannot be relied upon to rescue us. Above all, this is a book that appeals to the historical record in offering us insights on the unique career path of a figure who was rather more than today’s conception of a professional economist.

Publication of the Economic Consequences made Keynes an internationally famous figure. Its analysis was embraced by the liberal left in Britain, scorned by the nationalist right in France, more ambiguously received in the United States. But his fame was now undeniable – and immediately recognised by the Russian ballerina Lydia Lopokova with whom Keynes now began an affair that was to lead to their marriage. In particular this chapter uses Lydia’s letters as a lens through which we can see the impact of Keynes’s crucial venture into journalism. For he was now commissioned by the Manchester Guardian, Britain’s most eminent liberal newspaper, in a double role. Thus he covered the international Genoa conference for the paper in 1922, giving him insight on Lloyd George’s new role as a ‘revisionist’ intent on conciliating Europe. And Keynes also edited a series of special supplements for the paper that sought to propagate a more wide-ranging analysis of the problems facing reconstruction in Europe. The fact that these were now written in a more accessible form, with Lydia’s encouragement, was thus a crucial step for Keynes in propagating his ideas for a wider readership.

By extension of the changing perspectives explored in Chapter 5, in Chapter 6 there follows an exploration of how far Keynes likewise yielded, in his economic thinking in the 1920s, to the realities of a new economic order, challenging his former attachment to the gold standard. The argument here is that the crucial attraction of the gold standard was its rule-bound rationale; yet Keynes, under the impact of events, became disillusioned with a set of rules that now seemed to him less benign in the post-war world. At one level, he criticised the newly powerful United States for failing to exercise its hegemonic influence in the benign manner he had once imputed to British hegemony. At another level, he became sceptical of rules that only debtor countries had to observe, with adverse deflationary effects worldwide.

John Maynard Keynes died in 1946 but his ideas and his example remain relevant today. In this distinctive new account, Peter Clarke shows how Keynes’s own career was not simply that of an academic economist, nor that of a modern policy advisor. Though rightly credited for reshaping economic theory, Keynes’s influence was more broadly based and is assessed here in a rounded historical, political and cultural context. Peter Clarke re-examines the full trajectory of Keynes’s public career from his role in Paris over the Versailles Treaty to Bretton Woods. He reveals how Keynes’s insights as an economic theorist were rooted in his wider intellectual and cultural milieu including Bloomsbury and his friendship with Virginia Woolf as well as his involvement in government business. Keynes in Action uncovers a much more pragmatic Keynes whose concept of ‘truth’ needs to be interpreted in tension with an acknowledgement of ‘expediency’ in implementing public policy.

This chapter and the next explore a tension between two different worlds in which Keynes moved – himself apparently equally at ease in either. One of these was Cambridge, where his idiosyncratic relationship with the Economics Faculty was by no means what we would expect of an academic economist today. Instead we find him relying upon networks of friendship, with some important links going back to his early days as a member of ‘the Apostles’ in Cambridge. The writing of his major economic works, The Treatise on Money (1930) and the General Theory (1936) was thus crucially influenced in a way that we would today regard as quite unprofessional.

In little more than a couple of years (1919–22) Keynes published three books that contrasted not only in style but in substance when they addressed a common theme: the nature of truth. Thus in the Economic Consequences he proposed a ‘ruthless truth-telling’ about what had happened in Paris. When his intimidating academic tome A Treatise on Probability was finally published in 1921, it offered a defence of objective perception. A few months later, A Revision of the Treaty suggested that truth in politics was little more than a prejudice that might be at odds with practical good. The first part of this chapter explores how Keynes sought to reconcile such views, especially under the criticism of the brilliant young Cambridge mathematician Frank Ramsey, whose insights continue to excite attention today. How far Keynes ‘yielded’ to Ramsey’s view is thus a central issue.

It has long been a puzzle to reconcile two well-known facts: first that the Economic Consequences became the received version on the left for a contemptuous view of Lloyd George; second, that Keynes came to cooperate so closely with Lloyd George in seeking to revive the Liberal party in the 1920s. Their own relationship had begun during the First World War, when Keynes was first drawn into advising the Treasury on key policy issues from 1914. It was in these years that Keynes benefited from the sponsorship of Edwin Montagu, a key minister in the Liberal government. This chapter shows how much Lloyd George’s initial hostility to Keynes on economic policy was the product of a cultural clash between them; also how this came to be resolved (at least temporarily) when Keynes picked up economic insights from Lloyd George’s untutored intuitions. And the chapter draws on the memoir ‘Dr Melchior’, composed by Keynes for his Bloomsbury friends, to illustrate the way that – almost against his own prejudices – he became captivated by Lloyd George’s intuitive mastery of the political process.