John Maynard Keynes Was a Hedge Fund Manager

Oct 10, 2011
J. Webster
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In this week’s New Yorker magazine, in article called, ‘The Demand Doctor’, John Cassidy debunks many of the ideas held about John Maynard Keynes and his economic theories.

Keynes was neither a socialist or a communist or someone who wanted help grow the economy through tax cuts and stimulus unless there was a risk of recession or depression. It wasn’t like he proposed printing money or stimulus whenever there was little problem with the economy.

The goals of his theories were to turn the economy around by increasing demand via stimulus rather than by making deep cuts, especially in a crisis, which could make the crisis worse. There’s the unknown factor of what people will do – animal spirits – more or less the feeling of the people whether positive or negative. Keynes wanted to try to boost the animal spirits of the people during a down turn so it wouldn’t become a depression.

Surprisingly, Keynes also made bets in the stock market much like a hedge fund manager of today. He wasn’t someone who was ignorant of the stock market, rather, he played the game too.

If Keynes was scarcely the deficit dove some take him to be, efforts to portray him as some sort of socialist are even more risible. When he wasn’t busy writing, teaching, or advising governments, he wagered on the global markets in the manner of a modern hedge-fund manager.

He also served as the director of an insurance company and as the portfolio manager of the King’s College endowment. An Old Etonian and the son of a Cambridge economist, he never made any pretense about his privileged background, or where his social and political sympathies lay. “If I’m going to pursue sectional interests at all, I shall pursue my own,” he wrote in the nineteen-twenties. “The Class war will find me on the side of the educated bourgeoisie.”

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