A Funny Thing Happened to Me on the Way to the Institute

When I came to the Institute as a Director’s Visitor in January 2009, I had very little idea of what to expect, but at least I knew what I expected to be working on during the two months of my stay. This is the candid story of how my expectations were defeated— much to my own benefit and, I hope, to the credit of the Institute as well.

As a historian of modern Britain, I generally divide my time these days between Cambridge, England, where I am happy to revisit my old university and its libraries, and Pender Island, British Columbia, where the best library in my field is in the house that my wife Dr. Maria Tippett and I have built there. Living for most of the year on a remote island off the west coast of Canada, I already had calm and tranquil surroundings for writing. In coming to Princeton, I looked forward to exploiting the rich resources for research provided under the auspices of the Institute—and in this I was not disappointed.

But within a week or two of my arrival, I had to confess to the Director that I was not in fact working on Churchill and the concept of the English-speaking peoples, the topic that I had originally proposed. Peter Goddard did not turn a hair, immediately assuring me that this was in the best traditions of the Institute. This provided not only encouragement but a daunting challenge. True, I gladly fulfilled a commitment to give a Friends Forum on February 4 on “The Two Careers of Winston S. Churchill,” which explored the seriousness of Churchill’s commitment—and earnings—as a writer. But my attention was mainly turned in another direction, towards financial problems on a larger scale than those of Churchill’s tax returns.

It was the time of the inauguration of a new president in Washington, which we watched, with colleagues and with excitement, on the television link-up provided in Wolfensohn Hall. These were early days of innocence in the Obama presidency, promising hope and audacity. Both were to be needed in confronting a serious economic crisis. Moreover, the debate over appropriate responses to it inevitably aroused echoes for a historian of the circumstances in which President Franklin D. Roosevelt had taken office seventy-six years previously, inaugurating the New Deal with his message that there was nothing to fear but fear itself. Whether this was an appropriate response to the Great Depression of the 1930s, whether the thinking behind the New Deal was consistent or correct, whether it represented an early test for a Keynesian stimulus strategy, were historical questions that were suddenly given a new twist.

Academic economists and historians, marooned in what is usually derided as their ivory tower, have long made a frugal living out of debating such issues. In the tower at Princeton, just up the road, one economist decided to republish his collected academic articles about ten years ago. “I guess I am a Great Depression buff, the same way people are Civil War buffs,” he wrote in the preface, and barely a dog barked as the unworldly man confessed to his harmless little hobby. “I have enjoyed studying the Great Depression because it is a fascinating event at a pivotal time in modern history,” he continued. “How convenient for me, then, professionally speaking, that there is also so much to learn from the Depression about the workings of the economy.”

In January 2009, I sensed my new project in much the same terms as Ben Bernanke (for it was he of course). And while it has not yet given me the same degree of professional advancement and job opportunities, I am well pleased that I decided to write an accessible account of the thinking of John Maynard Keynes and of the reception of his ideas. At any rate, I recently had the pleasure of presenting the Director with a copy of my book, Keynes: The Rise, Fall, and Return of the 20th Century’s Most Influential Economist, published by Bloomsbury in London in September and by Bloomsbury Press in New York in October, on the anniversary of the Great Crash of 1929.

Thus the foundations for this book were laid at the Institute, not only through the availability of research facilities but through the intellectual stimulation of many informal discussions with other scholars. Their reactions to news of what I was doing helped me frame questions that my book sought to answer—especially why the thinking of an economist who died more than sixty years ago should continue to have such relevance for us today. As soon as I got back to Pender Island at the end of February, I began the eleven weeks of actual writing. I like to think that I was wound up like a coiled spring in releasing the energy that had been stored up at the Institute—or perhaps this metaphor simply reveals continuing deficiencies in my understanding of physics that further conversations over lunch might have remedied.

John Maynard Keynes was inconsistent far less often than is alleged. But he was guilty of changing his mind––usually for the better. What reason do we have for supposing that he would have denied us similar license? In policy, we are surely not wrong, more than seventy years after his General Theory, to improvise particular measures appropriate to our own times. Keynes’s name is thus rightly invoked to license fresh approaches to the novel economic difficulties of our own era––to tackle them actively rather than take refuge in inert doctrinal purity. It is indeed Keynesian to applaud government for trying something, and on a large scale too, when faced with obvious market failure. And the yardstick that Keynes introduced for assessing the costs is still valid: whether the economy itself can be expanded by such measures, generating the very resources that finance the initial stimulus. That is what justifies government action, not only for reasons of short-term expediency, but also in the long run. ––Peter Clarke in Keynes: The Rise, Fall, and Return of the 20th Century’s Most Influential Economist (Bloomsbury Press, 2009)