Was John Maynard Keynes a liberal? People should be free to choose. It was their freedom not to choose that troubled him

The Economist reports:

In 1944 Friedrich Hayek received a letter from a guest of the Claridge Hotel in Atlantic City, New Jersey. It congratulated the Austrian-born economist on his “grand” book, “The Road to Serfdom”, which argued that economic planning posed an insidious threat to freedom. “Morally and philosophically, I find myself”, the letter said, “in a deeply moved agreement.”

Hayek’s correspondent was John Maynard Keynes, on his way to the Bretton Woods conference in New Hampshire, where he would help plan the post-war economic order. The letter’s warmth will surprise those who know Hayek as the intellectual godfather of free-market Thatcherism and Keynes as the patron saint of a heavily guided capitalism.


But Keynes, unlike many of his followers, was not a man of the left. “The Class war will find me on the side of the educated bourgeoisie,” he said in his 1925 essay, “Am I a Liberal?”. He later described trade unionists as “tyrants, whose selfish and sectional pretensions need to be bravely opposed.” He accused the leaders of Britain’s Labour Party of acting like “sectaries of an outworn creed”, “mumbling moss-grown demi-semi-Fabian Marxism”. And he stated that “there is social and psychological justification for significant inequalities of incomes and wealth” (although not for such large gaps as existed in his day).

Why then did Keynes advocate Keynesianism? The obvious answer is the Great Depression, which reached Britain in the 1930s, shattering many people’s faith in unmanaged capitalism. But several of Keynes’s ideas dated back further.

He belonged to a new breed of liberals who were not in thrall to laissez-faire, the idea that “unfettered private enterprise would promote the greatest good of the whole”. That doctrine, Keynes believed, was never necessarily true in principle and was no longer useful in practice. What the state should leave to individual initiative, and what it should shoulder itself, had to be decided on the merits of each case.

An article worth reading.