His father, John Neville Keynes, is an Economics lecturer at Cambridge University. His mother, one of the first female graduates of Cambridge University, is active in charitable works for less-privileged people. She will later serve as mayor of the city.

His parents, who ultimately survived him, lived at 6 Harvey Road throughout Keynes’s life.

A teacher writes of him, “in his work there is absolutely nothing of the mercenary, mark-getting feeling… He takes a real interest in anything which it is worthwhile to be interested in.”

Keynes tops the select list in the Senior Mathematical Prize.

He spends most evenings engaged in social activities, ending each night in endless intellectual arguments with his friends, going to bed at about 3 a.m.

In his first year at university, he joins or is invited to join several highly prestigious debating and intellectual societies. Throughout his undergraduate years Keynes is a frequent speaker at the Union – Cambridge’s renowned debating society.

His intellectual and social activities will shape Keynes’s development more than his formal studies will.

Although he is an intellectual, Keynes does not abandon sport. He wins a cup when his boat wins in the Trail Eights. He plays tennis and golf and is fond of horse riding.

“Your son is doing excellent work in Economics. I have told him that I should be greatly delighted if he should decide on the career of a professional economist.”

Keynes writes to Strachey: “I find Economics increasingly satisfactory, and I think I am rather good at it. I want to manage a railway or organise a Trust, or at least swindle the investing public.”

“I have done worst in the only two subjects of which I possessed a solid knowledge – Mathematics and Economics. I scored more marks for English History than for Mathematics – is it credible? For Economics I got a relatively low percentage and was eight or ninth in order of merit – whereas I knew the whole of both papers in a really elaborate way. On the other hand, in Political Science, to which I devoted less than a fortnight in all, I was easily first of everybody. I was also first in Logic and Psychology and in Essay.”

He was later to say: “I evidently knew more about Economics than my examiners.”

Chancellor of the Exchequer David Lloyd George reads a memorandum written by Keynes urging resistance to demands being made by bankers for the creation of new assets and suspension of liabilities.

Basil Blackett, working in the Treasury, writes in his diary, “Lloyd George has at last come down on the right side… He has clearly imbibed much of Keynes’s memorandum and is strong against suspension of specie payments…”

He writes to G.L. Strachey, “I am absolutely and completely desolated. It is utterly unbearable to see day by day the youths going away, first to boredom and discomfort, and then to slaughter.”

In April 1915, he writes to Duncan Grant, “It is horrible, a nightmare to be stopt anyhow. May no other generation live under the cloud we live under.”

Soon after his appointment, Keynes is asked by Lloyd George to comment on Lloyd George’s views on the state of affairs in France. Keynes replies, “With the utmost respect, I must, if asked for my opinion, tell you that I regard your account as rubbish.”

Sir Otto Niemeyer and Sir Richard Hopkins wrote later:

“His quick mind and inexhaustible capacity for work rapidly marked out a kingdom for itself, and, before long he was a leading authority on all questions of external, and particularly inter-allied finance… It was Keynes who developed and applied the system of allied war loans… When America came into the war, the American Treasury found the system fully fledged and itself adopted a similar practice.

“I have been leading such a giddy life lately that there has been no time to write letters – only two evenings in the last fortnight when I haven’t dined out.”

“I was immensely cheered and excited by the Russian news. It’s the sole result of the war so far worth having… I see not the remotest chance, however, of any pro-Tsar counter-revolution…”

“Work has not been overwhelmingly heavy and the negotiations with the U.S., which occupy a good deal of my time, are going extremely well. If all happens as we wish, the Yanks ought to relieve me of some of the most troublesome of my work for the future. Relations with Russia, on the other hand are not what they should be. That’s a piece of diplomacy over which we have blundered hopelessly, with our ridiculous tears for the Tsar and the rest of it.”

“My Christmas thoughts are that a further prolongation of the war, with the turn things have taken, probably means the disappearance of the social order we have known hitherto. With some regrets I think I am not on the whole sorry. The abolition of the rich will be rather a comfort and serve them right anyhow. What frightens me more is the prospect of general impoverishment. In another year’s time we shall have forfeited the claim we had staked out in the New World and in exchange this country will be mortgaged to America.

“Well the only course open to me is to be buoyantly bolshevik; and as I lie in bed this morning I reflect with a good deal of satisfaction that, because our rulers are as incompetent as they are mad and wicked, one particular era of a particular kind of civilization is very nearly over.”

Looking at the performance of the German economy they conclude that Germany might possibly be able to pay £3,000 million, but £2,000 million is a more likely figure.

Charging £2,000 million at 5 percent interest would lead to annual interest payments of £100 million from Germany.

Meanwhile, an independent committee estimates the full cost of the war at £24,000 million and, at 5 percent of this sum, they conclude Germany should pay £1,200 million per year until the capital is paid off. (By way of contrast, to see how huge a sum this was, in 1931 Britain claimed it was economically impossible to pay off just £35 million per year to the U.S.)

“Lunch with Maynard Keynes… Keynes is very pessimistic about the German Treaty. He considers it not only immoral but incompetent.”

AND

“…Keynes has been too splendid about the Austrian Treaty. He is going to fight. He says he will resign.”

“I ought to let you know that on Saturday I am slipping away from this scene of nightmare. I can do no more good here. I’ve gone on hoping even through these last dreadful weeks that you’d find some way to make of the Treaty a just and expedient document. But now it’s apparently too late. The battle is lost.”

In one passage of the book he writes chillingly of what might be unleashed in Europe:

“If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not be limp. Nothing can then delay for very long that final Civil War between the forces of Reaction and the despairing convulsions of Revolution, before which the horrors of the late German war will fade into nothing, and which will destroy, whoever is victorious the civilization and progress of our generation.”

(The subsequent rise of Adolf Hitler in an economically desperate Germany is held by many observers to justify Keynes’s condemnation of the punitive actions taken by the allies against Germany following World War One.)

The book brings fame to Keynes but also turns him into a figure the establishment will be wary of for a considerable period of time.

Friday to Tuesday each week Keynes is at King’s College, tutoring pupils, lecturing and presiding over his Monday evening club.

His bursarial duties grow and he takes increasing responsibility for the College’s investment policy.

He writes to the Cambridge Review, supporting the cause of women, and continues as Editor of the Economic Journal.

With a view to increasing his personal wealth, Keynes forms or joins a number of investment syndicates while continuing to speculate on his own behalf.

In London, he becomes a financial consultant and follows the markets daily.

He decides he will write a new book on the German reparations problem and has frequent correspondence with people connected with this issue.

Keynes is also writing frequently for newspapers, particularly the Manchester Guardian. He sells his articles overseas and earns a significant income from journalism.

He is a member of the Liberal Committee on Industrial Policy.

Meanwhile, he continues to be a main player with his Bloomsbury friends in London where the concerns revolve around the finer things in life – the arts, good conversation, gossip about friends, literature and parties.

In North Africa, he and a friend have their shoes polished by a street-boy. Keynes believes he knows how much the boy should be paid and refuses to pay more. Natives throw stones at Keynes as he makes his way from the scene. Keynes comments, “I will not be a party to debasing the currency.”

Later in 1921 Treatise on Probability is published. It is Keynes’s first and last major work in Mathematics, exploring the foundations of knowledge.

Keynes argues against the validity of probabilities based on the frequency of past occurrences where probabilities may be subject to interpretation by people. He argues that probability is a logical relation and so it is objective. A statement involving probability relations has a truth-value independent of people’s opinions. He says:

“Perception of probability, weight, and risk are all highly dependent on judgement,” and “the basis of our degrees of belief is part of our human outfit.”

“I believe that in many cases the ideal size for the unit of control and organisation lies somewhere between the individual and the modern State. I suggest, therefore, that progress lies in the growth and the recognition of semi-autonomous bodies within the State-bodies whose criterion of action within their own field is solely the public good as they understand it, and from whose deliberations motives of private advantage are excluded…”

“One of the most interesting and unnoticed developments of recent decades has been the tendency of big enterprise to socialise itself. A point arrives in the growth of a big institution… at which the owners of the capital, i.e. its shareholders, are almost entirely dissociated from the management, with the result that the direct personal interest of the latter in the making of great profit becomes quite secondary. When this stage is reached, the general stability and reputation of the institution are the more considered by the management than the maximum of profit for the shareholders.”

“We must aim at separating those services which are technically social from those which are technically individual… The important thing for government is not to do things which individuals are doing already, and to do them a little better or a little worse; but to do those things which at present are not done at all.”

“For my part I think that capitalism, wisely managed, can probably be made more efficient for attaining economic ends than any alternative system yet in sight, but that in itself it is in many ways extremely objectionable. Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life.”

Stanley Baldwin’s Conservative government intervenes and provide a nine-month subsidy to maintain the miners’ wages.

“The fact is – a fact not yet recognized by the great public – that we are now in the depths of a very severe international slump, a slump which will take its place in history amongst the most acute ever experienced. It will require not merely passive movements of bank rates to lift us out of a depression of this order, but a very active and determined policy.”

“For the engine which drives Enterprise is not Thrift, but Profit.”

“…I do not know whether you realize how great an effect that letter [viz. that in the New York Times] had, but I am told that it was chiefly responsible for the policy which the Treasury is now quietly but effectively pursuing… reducing the long-term rate of interest.”

He meets President Roosevelt who writes to Felix Frankfurter, “I had a grand talk with K and liked him immensely…”

Keynes wins the enmity of American advocates of laissez-faire economics who believe Roosevelt is allowing American economic policy – The New Deal – to be influenced by a foreign economist.

“… you have to know that I believe myself to be writing a book on economic theory which will largely revolutionize – not, I suppose, at once but in the course of the next ten years – the way the world thinks about economic problems.”

“The city of Cambridge has always lacked a first class theatre. Keynes, as First Bursar of King’s College, releases land for the construction of a theatre and funds much of the construction personally.”

He travels to Russia and to Europe and continues with his normal duties.

“Neither the Prime Minister nor Herr Hitler ever intended for one moment that the play-acting should devolve into reality.”

“The intelligentsia of the Left were the loudest in demanding that the Nazi aggression should be resisted at all costs. When it comes to a showdown, scarce four weeks have passed before they remember that they are pacifists and write defeatist letters to your columns, leaving the defence of freedom and civilization to Colonel Blimp and the Old School Tie, for whom Three Cheers.”

Keynes is given a room in the Treasury and becomes a government economic adviser. He receives no pay for his duties, but now spends most of his time in London in this capacity.

He has grave concerns for Britain’s post-war economy and wonders about the possibility of applying “Keynesian” solutions on a world-scale. He writes his first draft of an international ‘Clearing Union’ of a non-political character, to aid and support other international institutions concerned with the planning and regulation of the world’s economic life.

“In the late afternoon we had a joint session with the Americans, at which Keynes expounded our views on the Bank. This went very will indeed. Keynes was in his most lucid and persuasive mood: and the effect was irresistible. At such moments, I often find myself thinking that Keynes must be one of the most remarkable men that have ever lived – the quick logic, the birdlike swoop of intuition, the vivid fancy, the wide vision, above all the incomparable sense of the fitness of words, all combine to make something several degrees beyond the limit of ordinary human achievement.”

“He shone in two respects – in the fact that he is, of course, one of the brightest lights of mankind… and also by being the world’s worst chairman.”

Dean Acheson, America’s representative tells the Treasury Secretary that Keynes was rushing things, “in a perfectly impossible and outrageous way… He knows this thing inside out so that when anybody says section 15-C he knows what it is. Nobody else in the room knows. So before you have an opportunity to turn to Section 15-C and see what he is talking about, he says, ‘I hear no objection to that’, and it is passed. Well, everybody is trying to find 15-C. He then says, we are talking about Section 26-D. Then they begin fiddling around with their papers, and before you find that, it is passed.”

Keynes suffers a heart attack while in the United States, but it does not seem too serious.

America announces that Lend-Lease to the United Kingdom has been stopped. Mainstream American opinion is that, with the war over, if the British are not starving, they should not need further assistance.

Keynes will need to fight hard to secure further American assistance for Britain.

Keynes speaks at the Federal Reserve for three days, presenting facts without embellishment. All present agree it is the finest presentation of a case they have ever heard.

Members of the British and American delegation break into separate commissions to discuss individual problems – over a period of three months.

The British obtain a loan from America, which will be interest free for six years and then charged at two percent. Also, Britain’s huge potential Lend-Lease obligations to America will be remitted in their entirety. It is likely that Keynes’s efforts for Britain have been rewarded with more generous terms than might have been obtained otherwise.

Unfortunately, most people are not acquainted with the economic facts. Keynes gives a masterful performance in the House of Lords, explaining the terms of the loan agreement and how Britain could not reasonably expect more.

In fact, the meeting proves to be difficult and ill-tempered. In Keynes’s view, the Americans are taking advantage of their strong economic position to force ill-conceived decisions on the IMF and Bank. Nations in debt to the Americans are voting with America, not because they want to but because, owing to their dependence on American aid, they feel they have no other option.

Until now, Keynes has always spoken strongly in favour of Americans – he has always found them to be pragmatic, ready to look at issues from all angles and ready to compromise. Now it seems they merely wish to dictate. When the meeting is over, Keynes abandons his plans for a vacation in Savannah. The place now has bitter associations and, on March 18 he leaves on the night train for Washington.

“I find myself more and more relying for a solution of our problems on the invisible hand which I tried to eject from economic thinking twenty years ago.”

“To find an economist of comparable influence, one would have to go back to Adam Smith.”