The Price Of Peace Money, Democracy and The Life Of John Maynard Keynes By Zachery D. Carter 2020  

Copyright 2020 Zachary D. Carter,  Random House

LCCN Print 2019037057 E-Book 2019037058

ISBN Hardcover 9780525509035 E-Book 9780525509042

               Price of Peace is more a history of economic theory in the 20^th Century than a traditional biography of a “life.”  And for all of us who find Mr. Keynes “master work” The General Theory of Employment, Interest and Money practically impenetrable (which Mr. Keynes stated he “chiefly addressed” to other economists), Price of Peace is a most welcome distillation of the General Theory which will make that work much more accessible to everyone.

               Perhaps even more importantly Price of Peace will dispel many, if not all, of the myths spread by pundits and politicians over decades in the media about Mr. Keynes and his work..  The unfortunate  consequence of Professor Keynes writing such an esoteric tome as the General Theory was the result that, as Harvard Professor Alvin Hansen wrote back in the 1950s: “many people talk about the General Theory but few have read it.”

               The major myths busted  by Mr. Carter:

               - Professor Keynes was a “socialist” (or worse).  Actually Professor Keynes spent most of his career defending capitalism and trying to make it perform better against socialist, communist and fascist economic theory which all became particularly popular in the after math of WWI (which destroyed pre-war Europe’s economic system) and during the Great Depression.

               -Keynes was a “deficit spender.”  Actually, according to Professor Keynes, there were only two principal justifications for fiscal deficit spending: (1) when the economy entered a retraction cycle to avoid it from becoming a recession; and (2) when an economy was already in a recession (or during the 1930s a depression).

               -Keynes was a “tax hiker.”  Actually Mr. Keynes was a strong advocate of cutting government taxes DURING periods of government surplus—i.e. economic expansion.

               Other major themes of Keynesian Economics reviewed in Price of Peace:

               -Unregulated or deregulated market economies are not “self correcting” as the Great Depression and Great Recession respectively demonstrated.

               -There is no such place as a “rational economic market” whose predictability can be calculated by mathematical models because people do not make investment, saving, production and/or consumption decisions totally rationally; but also on the basis of self interest and security.

               -Macro economy is primarily driven by consumption rather than investment or monetary policy.  The more money the economy (i.e. not the government by printing more money) places in the hands of worker-consumers the more money is available to purchase goods and services and for investment.  In other words “demand and wealth must be created from the bottom up” not from the top down. 

               -The vast majority of stock investors do not “investigate or study” the stocks they buy.  They primarily buy the stocks that they see other investors buy.  (Mr. Keynes must be in his heavenly armchair smiling down at all of the Buffetteers.”)

               -Effective economic policy must be primarily based on common sense and an understanding of public expectations—i.e. psychology—rather than any one economic theory or formula.

               -The gross disparity of wealth is the great economic problem that democracies must address or socialism, communism or dictatorship—i.e. government “centralization” of economic direction--will always return.  A trend we can certainly see in many the world’s economies today.

Finally what this reader found particularly refreshing was Mr. Carter’s discussion of the criticisms and “reactions against” Keynesian economic theory.  We get a good dose of Hayek, Friedman, Phillips (we all remember The Phillips Curve, right?), Galbraith, Rubin and others in Price of Peace.

I believe Professor Keynes would have approved of that discussion since another trend we see in Mr. Carter's "life" of Keynes is that he  significantly altered his economic thinking over his lifetime based upon the thoughts of both colleagues, competitors and changing world economic conditions. 

Consequently Professor Keynes most influential and lasting legacy may be his treating economic theory as a constantly changing to meet current economic conditions model rather than any “classical” economic theory fixed in the prejudices and conditions of the past.

And perhaps Mr. Carter’s lasting legacy will be to have finally made Keynes basic economic theories accessible and understandable to both politicians and the general public free of all of the nonsense peddled by so many political talking heads for decades.  Now anyone who is interested in what Professor Keynes basically actually said and meant can do so by reading Mr. Carter's book.

Certainly this is a signifcant accomplishment long overdue, and one can only hope Mr. Carter will continue to “de-mystify” economic theory for all of us in future works.