If you studied economics a generation ago, as I did, then there was one name which dominated every discussion. It was the British Economist John Maynard Keynes.
To say that he was the most influential economist of the early 20th century is an understatement. He was economics.
His thoughts and proposals became the policies of governments, like Britain and the United States for the next generation.
Keynes changed how we saw economics and adopted an entirely new top-down view. A perspective we now call Macro-economics. A new discipline which would provide for the role of the public sector in the economy.
Before Keynes, it was always assumed that government should play only a very minimal role in the free market functioning of a country's economy.
After Keynes it became clear to many of our political leaders, that there was an ever increasing role for government.
During the Great Depression, Franklin Roosevelt used the concepts developed by Keynes to implement those government programs used to mitigate the effects of the Depression.
And the “Prime the Pump” politicians of this country, owe their intellectual foundation to Keynes.In today's terms Keynes would be considered a political-economic activist from the left side of the political spectrum.
That's why it is so interesting when you go back, and try to piece together what Keynes might have thought of Brexit.
I assumed that Keynes would come from the same point of view as the 21st century economic activists, and that he would have thought Brexit a terrible idea.
But not so.
The most famous economist of a century ago, would have cheered with his fellow Englishmen, when the Union Jack was at last removed from the line of flags in Brussels.
Writing in the Yale Review, back in 1933 at the height of the Depression, Keynes extols the virtue of a Country that can take care of itself, in an article entitled: “National Self Sufficiency.”
You can find several copies of this article on the internet, obviously it's popular with the pro-Brexit Brits.And if you get a chance, it's well worth the short read. Just Google either John Maynard Keynes or “National Self Sufficiency.”
In the article Keynes looks back to really his own career up to that time. Looking back to the dominance that International Trade had in the 19th Century. The period just before Keynes came on the scene.
He acknowledges that most economist then, and when he is speaking in the 1930s felt that it was through international trade, that most nations would gain the most wealth.
And that they would thereby eliminate poverty. Through specialization, countries would do those functions they do best. And through international trade, this would benefit all countries.
But Keynes saw through this Utopian vision. He recognized that not all countries operated in a truly free market environment. And that differing trade policies among nations would lead to real inequalities.
So strongly did Keynes see this, that he actually felt that War, and remember this was written 3 years before the outbreak of World War II, Keynes felt that War was MORE likely in a world with extensive trade entanglements.
Because War would become the natural resolution to the trade disputes that would inevitably arise.
Fortunately, the implementation of Brexit has forestalled any talk of war. And Britain has peacefully withdrawn from the European Union.
So, John Maynard Keynes, the iconic economist of the left, would see Brexit as pretty close to the ideal family of nations.
One in which “Ideas, knowledge, science, hospitality, travel--” flow freely among countries.
But, according to Keynes, Quote: “let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”
I can't think of a better definition of Brexit than that: “let goods be homespun whenever it is reasonably and conveniently possible, and, above all, let finance be primarily national.”