Robert Skidelsky has mixed feelings about completing his critically acclaimed three-volume biography of the 20th century's most famous economist. "There's certainly a tremendous sense of relief," he comments from an armchair at the Yale Club, where he is staying while in New York for Viking's December publication of John Maynard Keynes: Fighting for Freedom (Forecasts, Nov. 5, 2001). "It means I can now do other things that I haven't had time for. But I also feel I've lost a fascinating companion: Keynes was an extremely vivid personality, and these three books were by far the most satisfying I've written, the largest in scope and most ambitious. I'm not a professional biographer; I only enjoy writing about people who interest me deeply. Who better than Keynes, who takes in so much of the 20th century?"
Who, indeed? In volume 1, subtitled Hopes Betrayed, Skidelsky got to dish Bloomsbury gossip (Lytton Strachey was Keynes's intimate friend; Duncan Grant was the love of his homosexual life) while examining the formation of moral and economic principles that in 1919 led a young British civil servant to argue forcefully and publicly against the unfair, unenforceable Treaty of Versailles. In volume 2 The Economist as Savior, the author could balance a lengthy (though extremely lucid) exegesis of Keynes's most famous book, The General Theory of Employment, Interest and Money against a vivid account of the furor the 42-year-old economist caused among his Bloomsbury buddies in 1925 when he married Russian ballerina Lydia Lopokova.
It was a love match that endured until Keynes's death in 1946, and it's one of the reasons Fighting for Freedom is more tightly focused than its predecessors. With his private life quietly settled, the economist could devote his attention, as does his biographer, to the tense negotiations with the U.S. for loans and financial agreements that would enable Britain to fight World War II. "The difficulty in this volume was to make those financial negotiations come to life," comments Skidelsky. "The challenge was to convey the drama, the fact that under the facade of the Grand Alliance there was a great struggle going on between Britain and the United States for their postwar position."
"National interests do not disappear just because the cause is noble," Skidelsky comments. "America tends to interact with other countries by laying down the law— 'We know best'—whereas international relations is much more about bargaining. If you want to keep the peace, you've got to face the fact that lots of people don't agree with you and may have the power either to resist or to make life bloody inconvenient."
Fighting for Freedom covers in detail the origins of two institutions that have recently been flash points for hostility toward the United States: the International Monetary Fund and the World Bank, both established (with Keynes's vital contributions) at the Bretton Woods Conference of 1944. "Keynes wanted to establish a central bank that would regulate the world's money supply, so the fight against inflation and depression would be conducted at the international level. Instead, the World Bank was set up mainly to help with development finance for poor countries. Keynes accepted the compromise because he thought it was important to get something started that could perhaps grow."
"One of the worst misinterpretations of Keynes is to regard him as on the side of the interventionists and controllers," says Skidelsky. "Keynes was on the side of liberty, he wanted a free society and a free economy, but he understood that if you allow things to go seriously wrong, you let in the wreckers, the Hitlers and the Stalins. The way you keep them out is by having the economy run in such a way that enough people are satisfied with it and aren't tempted to desperate measures."
Like Keynes, Skidelsky advocates capitalism tempered by compassion. Born in 1939 in Manchuria, son of British subjects who fled their native Russia after the Bolshevik revolution, Skidelsky has family experience with the irrationality of communist economics. Educated at Oxford, a professor since 1978 at Warwick University, he began in the 1980s to combine his academic career with political activism. He was a founding member of Britain's Social Democratic Party, and helped craft its economic program. Elevated to the peerage as Baron Skidelsky in 1991, he joined the Conservative Party after the SDP dissolved in 1992, but was sacked as a party spokesman after he publicly opposed the NATO bombing of Kosovo in 1999.
Despite the wrenching political problems posed in regions like the Balkans and the Middle East, readers of The World After Communism (1995) know that Skidelsky is fundamentally optimistic about the international order. "That book makes the point that globalization is a restoration of the 19th-century global economy," he says. "I think we're at the end of a long detour that started with the First World War and ended with the fall of communism, during which the world was divided up into blocs and there wasn't a single world economy. Thank God that era is out of the way and we can be human beings and treat each other more or less reasonably and not put up these huge barriers of one kind or another. I think capitalism, markets and economic freedom are the best way forward until we've got to the point where we don't want them any longer. Keynes always made this point: capitalism has one function, which is to solve the economic problems of people. Once that's done, then we can start thinking about how to live wisely, agreeably and well."