Keynes died of a heart attack on 21 April, 1946 at the age of 62, not long after his return from America. Keynes was survived by his wife Lydia Lopokova, a Russian ballerina, who actually lived until 1981. Keynes’ passing was a few years after he had attended the Bretton Woods conference in 1944, at which the world’s post-WWII international monetary system was organised. The International Monetary Fund (IMF) was one of the institutions that emerged from the transactions at Bretton Woods.
How interesting it is, then, to see the IMF’s managing director Dominique Strauss-Kahn paying lip service to Keynes and his ideas in a recent speech, even while the IMF continues to wreak neoliberal havoc on many of the world’s economies (see Mark Weisbrot, “Emerging out of the IMF’s Shadow,” Guardian.co.uk, 18 April, 2011 and “The Ghost of Keynes at the IMF?, Lofty Rhetoric, Hollow Policies”, Counterpunch, April 19, 2011).
It is rather astonishing to see Strauss-Kahn making statements like this:
“At the end of his magnum opus, The General Theory, Keynes stated the following: “The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes” ….All true, but I don’t expect a conversion to Keynesian truth at the IMF board any time soon, though there have of course been some promising changes at the IMF recently, not least of all the recognition that discretionary capital controls are now needed in developing and even some developed countries to control destructive short-term capital flows.
“Let me start with employment. Just as we managed to tame inflation in the 1980s, this decade should be the decade that takes full employment seriously once again ….
Collective bargaining rights are important, especially in an environment of stagnating real wages….”
But the real test of whether Keynes is still relevant is what happened during the global financial crisis and world-wide recession in 2008–2009. Faced with the plunge into global depression, most governments returned to the tried and tested Keynesian medicine of fiscal stimulus. That policy worked well, but more stimulus was, and is now, required.
It is sad to note the anniversary of Keynes’ death, but his economics is alive and well, as is the struggle to return us to Keynesian full employment.
Keynes might be dead, but long live Keynesian economics.