title: Jens Stoltenberg

text: On 24 August 2012, 33-year-old Norwegian Anders Behring Breivik was found guilty by the Oslo District Court of having perpetrated by himself both terrorist attacks, the bombing of the prime minister's office and the shooting spree on Utøya island, and was convicted to "containment", a special form of prison sentence that can be extended indefinitely—with a time frame of 21 years and a minimum time of 10 years, which, in all, is the maximum penalty in Norway.


title: Jens Stoltenberg

text: On 3 September 2012, Norwegian daily "Klassekampen" wrote that the Gjørv Report on the terrorist attack "is the hardest verdict against a Norwegian cabinet since the Fact-Finding Commission of 1945 ensured that Johan Nygaardsvold's political career was abruptly halted." Stoltenberg said after the report was published that he had "ultimate responsibility for the preparedness in our country, a responsibility I take seriously," but said he would not resign.


title: Jens Stoltenberg

text: Stoltenberg was the Prime Minister candidate for the Red-Green Coalition in the 2013 elections, seeking re-election for a third term.


title: Jens Stoltenberg

text: On 9 September 2013, the coalition failed to win a majority, with 72 of the required 85 mandates, despite the Labour Party remaining the largest party in Norway with 30.8%. In his speech the same night, he announced that his cabinet would resign in October 2013. Stoltenberg returned to the Parliament where he became parliamentarian leader for the Labour Party and a member of the Standing Committee on Foreign Affairs and Defence. In December 2013, he was appointed by the United Nations as a Special Envoy on Climate Change, alongside the former Ghanaian president John Kufuor.


title: Jens Stoltenberg

text: Stoltenberg has been described as a cautious politician, belonging to the right wing of social democracy.


title: Jens Stoltenberg

text: When he became prime minister in 2000, he was portrayed as the "Norwegian Tony Blair", and his policies were inspired by Blair's New Labour agenda; his first government oversaw the most widespread privatisation by any Norwegian government to that date. Stoltenberg said he was both inspired by and wanted to learn from Blair's policies.


title: Jens Stoltenberg

text: While Stoltenberg was Prime Minister, Norway's defence spending increased steadily, with the result that Norway today is one of the NATO allies with the highest per capita defence expenditure. Stoltenberg has also been instrumental in modernising the Norwegian armed forces, and in contributing forces to various NATO operations.


title: Jens Stoltenberg

text: Stoltenberg is a supporter of enhanced trans-Atlantic cooperation ties. He has also always been a supporter of Norwegian membership in the European Union.


title: Jens Stoltenberg

text: Stoltenberg has criticized Israel over alleged violations of international law in the Palestinian Territories as well as in international waters, such as the Gaza flotilla raid. In 2006, Stoltenberg stated that "Norway condemns Israel's actions against Palestinians. Such collective punishment is totally unacceptable." Stoltenberg praised doctors Mads Gilbert and Erik Fosse for their humanitarian work in the Gaza Strip during the Gaza War, stating that "all of Norway" was behind them.


title: Jens Stoltenberg

text: Stoltenberg took an international role during the financial crisis by promoting international financial cooperation. This was among other arenas done through the International Monetary Fund (IMF) and a meeting in Chile 27–29 March 2009 where social democratic leaders from around the world met at a Progressive Governance Conference, just prior to the first G20 summit on the financial crisis. President Bill Clinton was among the delegates and panel that would chart a way out of the financial crisis, which included the host Michelle Bachelet, Britain's finance minister Gordon Brown, Brazil's President Lula da Silva and Stoltenberg. A special emergency meeting of the European Social Democratic Forum (PES) was gathered in Oslo in May 2011, on an initiative from Stoltenberg and the think tank Policy Network.


title: Jens Stoltenberg

text: Both nationally and internationally, Stoltenberg emphasised the enormous costs the financial crisis had in the form of a high unemployment rate, and appealed for better international coordination, the balance between austerity and economic growth stimulus, active labor market measures for young people, and investments for increased innovation. Norway came out of the financial crisis with the lowest unemployment rate in Europe.


title: Jens Stoltenberg

text: Partnering with tropical countries to preserve more of their rainforest to bind carbon dioxide (CO) in order to reduce greenhouse gas emissions was a policy of the Stoltenberg government. In 2007, the government received support from the opposition to a long-term agreement to finance forest conservation with 3 billion NOK annually.


title: Jens Stoltenberg

text: Stoltenberg through his governing advocated that international agreements with global taxes or quotas are the most effective means of reducing greenhouse gas emissions. At the UN Climate Change Conference 2009, a separate proposal on the preservation of rainforests with funding from rich countries, advanced by Stoltenberg and Brazilian Pres. Luiz Inácio Lula da Silva in 2009 obtained support from among others U.S. President Barack Obama during COP15 in Copenhagen.


title: Jens Stoltenberg

text: The summit in Copenhagen ended without a binding agreement, but before the subsequent COP16 in Cancún, Stoltenberg succeeded then-British Prime Minister Gordon Brown in the leadership of the committee dealing with the financing of climate actions in developing countries, also consisting of Ethiopian Prime Minister Meles Zenawi. Under a separate forest and climate conference in Oslo in May 2010, a proposal was presented to a number of countries, with final delivery of the report in autumn 2010.


title: Jens Stoltenberg

text: In January 2014 Jens Stoltenberg became United Nations Special Envoy on Climate Change. During the meeting there he met with Secretary General Ban Ki-Moon as well as UN Framework Convention director Christiana Figueres and both Achim Steiner and Helen Clark of the United Nations Development Programme.


title: Jens Stoltenberg

text: Stoltenberg has been an advocate for having all the world's children vaccinated against infectious diseases. The first speech he gave in his second term as Prime Minister was during Norway's "Pharmaceutics days" in 2005 under the title "Vaccination against poverty." Stoltenberg was a board director of the Global Alliance for Vaccines and Immunization (GAVI) from 2002 to 2005 and was awarded the Children's Health Award in 2005.


title: Jens Stoltenberg

text: An international initiative, with the UK, the Gates Foundation and Norway in the lead, that GAVI received more than $3.7 billion until 2015 for their work against child mortality. Stoltenberg was one of the key driving forces behind the initiative, and has stressed that this is an important contribution to save 9 million children from dying of the most common childhood illnesses.


title: Jens Stoltenberg

text: In his New Year speech on 1 January 2013, Stoltenberg spoke about vaccination of the world's children as a personal matter of the heart. "Small jabs are giving millions of children the gift of life. Simple medicines can save their mothers. The fact that all these mothers' and children's lives can be saved is—as I see it—a miracle of our time," Stoltenberg said in his speech.


title: Jens Stoltenberg

text: In 2011, Stoltenberg received the United Nations Foundation's Champion of Global Change Award, chosen for his extraordinary effort toward meeting the Millennium Development Goals and bringing fresh ideas to global problems. In 2019, his term as Secretary General of NATO was extended for another two years. Earlier the same year, Stoltenberg had allocated 150 million Norwegian kroner of the foreign aid budget to the same foundation, which led to criticism.


title: Jens Stoltenberg

text: In 2013, Stoltenberg served as a UN special envoy on climate change (global warming), and he chaired the UN High-Level Panel on System Wide Coherence and the High-Level Advisory Group on Climate Change Financing.


title: Jens Stoltenberg

text: On 28 March 2014, NATO's North Atlantic Council appointed Stoltenberg as designated successor of Anders Fogh Rasmussen as the 13th Secretary General of NATO and Chairman of the council, effective from 1 October 2014. The appointment had been widely expected in the media for some time, and commentators pointed out that the alliance's policies toward Russia will be the most important issue faced by Stoltenberg. Angela Merkel, the chancellor of Germany, took the initiative to appoint Stoltenberg as secretary-general, securing the support first of the United States, then of the United Kingdom, and then of all other member states. Norway was a founding member of NATO in 1949, and Stoltenberg is the first Norwegian to serve as secretary-general, although former Conservative Party Prime Minister Kåre Willoch was considered a strong candidate in 1988.


title: Jens Stoltenberg

text: In June 2015, Stoltenberg said, "I believe we don't see any immediate threat against any NATO country from the east. Our goal is still cooperation with Russia… That serves NATO and it serves Russia."


title: Jens Stoltenberg

text: In September 2015, Czech Deputy Prime Minister Andrej Babiš criticized NATO's lack of response to the European migrant crisis. After talks with Stoltenberg on migrant crisis issue Babiš said: "NATO is not interested in refugees, though Turkey, a NATO member, is their entrance gate to Europe and smugglers operate on Turkish territory".


title: Jens Stoltenberg

text: Stoltenberg strongly condemned the 2016 Turkish coup d'état attempt and expressed full support for Recep Tayyip Erdoğan's government. He did not condemn the 2016–present purges in Turkey. In November 2016, Stoltenberg admitted that some "Turkish officers working in NATO command structures... have requested asylum in the countries where they are working."


title: Jens Stoltenberg

text: In June 2016, Stoltenberg said it was essential to step up cooperation with Israel, since Israel had been an active alliance partner for 20 years. In June 2018, Stoltenberg told "Der Spiegel" that NATO would not help Israel in the case of an attack by the Islamic Republic of Iran.


title: Jens Stoltenberg

text: In 2016, Stoltenberg stated that the NATO strongly supported "the UN-led political process to find a solution" to the dispute over the northern part of Cyprus, which has been under illegal occupation since the Turkish invasion of 1974.


title: Jens Stoltenberg

text: The presidency of Donald Trump was a major challenge to NATO during Stoltenberg's time as secretary general. Donald Trump threatened to withdraw from NATO and undermine the alliance. A 2021 study argued that Stoltenberg played a key role in preventing Trump from undermining NATO. Stoltenberg helped to change Trump's stance on burden-sharing, as well as maintain a robust deterrence policy toward Russia.


title: Jens Stoltenberg

text: In August 2017 the last NATO Certification Exercise of the four multinational battlegroups in the Baltic partners was conducted. Canada leads the battlegroup in Latvia. Germany leads the battlegroup in Lithuania. The United Kingdom leads the battlegroup in Estonia. The United States leads the battlegroup in Poland. This "NATO Enhanced Forward Presence" was the result of the 2016 Warsaw summit and much prior planning by Stoltenberg.


title: Jens Stoltenberg

text: In September 2017, Stoltenberg warned that Russia has used big military exercises, including Zapad 2017 exercise in Russia's Kaliningrad Oblast and Belarus, "as a disguise or a precursor for aggressive military actions against their neighbours."


title: Jens Stoltenberg

text: In January 2018, in response to the Turkish invasion of northern Syria aimed at ousting U.S.-backed Syrian Kurds from the enclave of Afrin, Stoltenberg said that Turkey is "the NATO Ally which has suffered most from terrorist attacks over many years and Turkey, as all of the countries, have the right to self defence, but it is important that this is done in a proportionate and measured way."


title: Jens Stoltenberg

text: In February 2018, Stoltenberg stated: "We don’t see any threat [from Russia] against any NATO ally and therefore, I’m always careful speculating too much about hypothetical situations." Stoltenberg welcomed the 2018 Russia–United States summit between Vladimir Putin and Donald Trump in Helsinki, Finland. He said NATO is not trying to isolate Russia.


title: Jens Stoltenberg

text: At the July 2018 Brussels Summit, the Alliance reconfirmed its commitment to preserving the credibility, coherence and resilience of the deterrence and defense posture, including by increasing its responsiveness, heightening readiness and improving reinforcement. In practical terms, NATO adopted political decisions with regard to: having, by 2020, 30 battalions, 30 air squadrons and 30 naval combat vessels ready to use within 30 days.


title: Jens Stoltenberg

text: In March 2019, Stoltenberg stated that the former Soviet republic of "Georgia will become a member of NATO".


title: Jens Stoltenberg

text: In April 2019, Stoltenberg warned in a joint session of the U.S. Congress of the threat posed by Russia. In May 2019, Stoltenberg hailed Turkey's contribution to NATO. He said: "Turkey joined the Alliance in 1952, and it continues to be a highly valued member of our family of nations. As secretary-general, I greatly appreciate all that Turkey does for our Alliance."


title: Jens Stoltenberg

text: In August 2019, Stoltenberg warned that NATO needs to "address the rise of China," by closely cooperating with Australia, New Zealand, Japan and South Korea. In June 2020, Stoltenberg urged like-minded nations to stand up to China's "bullying and coercion."


title: Jens Stoltenberg

text: Stoltenberg "strongly condemned" the 2019 Abqaiq–Khurais attack on key Saudi Arabia's oil facilities and accused Iran of "supporting different terrorist groups and being responsible for destabilising the whole region."


title: Jens Stoltenberg

text: In October 2019, Turkey invaded the Kurdish areas in Syria. Stoltenberg said that Turkey has "legitimate security concerns" during press conference with Turkish FM Mevlüt Çavuşoğlu.


title: Jens Stoltenberg

text: In December 2019, Stoltenberg told journalists in Brussels that "Since 2016, Canada and European allies have added $130 billion more to the defense budgets, and this number will increase to 400 billion U.S. dollars by 2024. This is unprecedented. This is making NATO stronger."


title: Jens Stoltenberg

text: The U.S. military's 2020 Baghdad International Airport airstrike, which killed the high-level Iranian General Qasem Soleimani, brought strong reactions from around the world. Stoltenberg said, following a meeting on 6January, "all members of the Atlantic alliance stood behind the United States in the Middle East" and that "Iran must refrain from further violence and provocations."


title: Jens Stoltenberg

text: On 14 February Stoltenberg opened the Munich Security Conference. Amongst the topics he chose to address were Donald Trump's call for the European allies to contribute more funds to the common military good, the situation in Afghanistan which he promised not to leave, and the desire of Russia to reimagine the world in terms of the spheres of influence of the post-war years of the 20th century. In a thinly-veiled reference to Chinese leadership in the 5G telecoms sector, he said that "Keeping our societies open, free and resilient must be part of our response... We should not be tempted to trade short term economic benefits for longer-term challenges to our security." Earlier in the day, Stoltenberg had dealt with the partnership issue, and listed New Zealand, Australia, Finland, Sweden, Ukraine and Georgia as such, saying "We support them, but they also support us. Many partners contribute to NATO missions and operations, for instance in Afghanistan or Iraq."


title: Jens Stoltenberg

text: There is a long-standing dispute between Turkey and Greece in the Aegean Sea. The disagreement flared in August. The same month Stoltenberg said that "Both Greece and Turkey are two valued allies and both contribute to our shared security. There are some disagreements and I welcome that there are bilateral contacts trying to address these differences," adding that NATO is not a part of these bilateral talks.


title: Jens Stoltenberg

text: In October 2020, Stoltenberg called for an immediate end to the fighting over the breakaway Nagorno-Karabakh region, an enclave that belongs to Azerbaijan under international law but is populated and governed by ethnic Armenians.


title: Jens Stoltenberg

text: On 19 February 2021 Stoltenberg addressed the Munich Security Conference via teleconference due to the COVID-19 pandemic with largely anodyne remarks.


title: Jens Stoltenberg

text: On 13 April Stoltenberg called on Russia to halt its buildup of forces near the border with Ukraine. Russian Defense Minister Sergey Shoygu said that Russia has deployed troops to its western borders for "combat training exercises" in response to NATO "military activities that threaten Russia." Defender-Europe 21, one of the largest NATO-led military exercises in Europe in decades, began in mid-March 2021 and lasted until June 2021. It included "nearly simultaneous operations across more than 30 training areas" in Estonia, Bulgaria, Romania and other countries.


title: Jens Stoltenberg

text: On 14 April 2021, Stoltenberg said the alliance has agreed to start withdrawing its troops from Afghanistan by 1 May. Soon after the withdrawal of NATO troops started, the Taliban launched an offensive against the Afghan government, quickly advancing in front of a collapsing Afghan Armed Forces. According to a U.S. intelligence report, the Afghan government would likely collapse within six months after NATO completes its withdrawal from the country. On 7 June 2021, Stoltenberg said that "we have been able to build, train Afghan security forces so they are now responsible for security in their own country." By 15 August 2021, Taliban militants controlled the vast majority of Afghanistan and had encircled the capital city of Kabul. Stoltenberg said that "it was a surprise, the speed of the collapse and how quickly that happened."


title: Jens Stoltenberg

text: Stoltenberg attended the 2021 United Nations Climate Change Conference, and specified that the fight against climate change also is something the military could participate in. He also expressed that militaries should work with operating both fossil and environmentally friendly ones.


title: Jens Stoltenberg

text: On 30 November Russian President Vladimir Putin stated that an expansion of NATO's presence in Ukraine, especially the deployment of any long-range missiles capable of striking Moscow or missile defence systems similar to those in Romania and Poland, would be a "red line" issue for the Kremlin. Putin argued that these missile-defense systems may be converted into launchers of offensive Tomahawk long-range cruise missiles. He said that "In a dialogue with the United States and its allies, we will insist on working out specific agreements that would exclude any further NATO moves eastward and the deployment of weapons systems that threaten us in close vicinity to Russian territory." Stoltenberg replied that "It's only Ukraine and 30 NATO allies that decide when Ukraine is ready to join NATO. Russia has no veto, Russia has no say, and Russia has no right to establish a sphere of influence to try to control their neighbors."


title: Jens Stoltenberg

text: On 14 January Stoltenberg condemned the 2022 Ukraine cyberattack. He stated that NATOs day experts in Brussels has exchanged information with Ukraine, and that experts from the alliance would be assisting Ukrainian authorities with the matter. He added: “In the coming days, NATO and Ukraine will sign an agreement on enhanced cooperation on data security, including Ukraine's access to NATO's malware sharing platform”.


title: Jens Stoltenberg

text: On 19 February at the Munich Security Conference Stoltenberg remarked that despite NATO's "strong diplomatic efforts to find a political solution [to the Ukrainian crisis]... we have seen no sign of withdrawal or de-escalation so far. On the contrary, Russia’s build-up continues." He said "we have made written proposals to the Putin administration to reduce risks and increase transparency of military activities, address space and cyber threats, and engage on arms control, including on nuclear weapons and missiles... [Putin] is attempting to roll back history. And recreate [the] spheres of influence. [He] wants to limit NATO’s right to collective defence... and demands that we should remove all our forces and infrastructure from the countries that joined NATO after the fall of the Berlin Wall... wants to deny sovereign countries the right to choose their own path. And their own security arrangements. For Ukraine - but also for other countries, such as Finland and Sweden. And for the first time, we now see Beijing joining Moscow in calling on NATO to stop admitting new members. It is an attempt to control the fate of free nations. To rewrite the international rulebook. And impose their own authoritarian models of governance." On the dais with him was Ursula von der Leyen. Together they proceeded to give an interview to the witness audience.


title: Jens Stoltenberg

text: On 21 February 2022, Stoltenberg condemned Russia's diplomatic recognition of two self-proclaimed separatist republics in Donbas.


title: Jens Stoltenberg

text: On 4 March 2022, Stoltenberg said NATO would not establish a no-fly zone over Ukraine. He said, "we are not part of this conflict, and we have a responsibility to ensure that it does not escalate and spread beyond Ukraine, because that would be even more devastating and more dangerous."


title: Jens Stoltenberg

text: On 8 March 2022, Stoltenberg warned that if there is any Russia's attack "against any NATO country, NATO territory, that will trigger Article 5" of the North Atlantic Treaty.


title: Jens Stoltenberg

text: On 23 March 2022, Stoltenberg accused China of providing political support to Russia, "including by spreading blatant lies and misinformation, and expressed concern that "China could provide material support for the Russian invasion."


title: Jens Stoltenberg

text: On 28 March the establishment of four more multinational battlegroups in Bulgaria, Hungary, Romania and Slovakia was announced, although the Slovak battlegroup had already been announced on 27 February. This brings the total number of multinational battlegroups to eight, and Stoltenberg said ahead of an extraordinary NATO summit scheduled for March 24 in Brussels that "we will have eight multinational NATO battle groups all along the Eastern flank from the Baltic to the Black Sea". The Baltic Sea is guarded by the NATO Enhanced Forward Presence, to which the four more would be added. A multinational brigade headquarters exists in Craiova, Romania and this seems to be the distribution point of the extra four battlegroups. The summit statements by Biden and NATO were somewhat controversial.


title: Jens Stoltenberg

text: In May 2022 Stoltenberg said Finland and Sweden would be welcomed "with open arms" to NATO if they apply for membership to the alliance. While most current NATO members responded positively to the applications, Turkish president Recep Tayyip Erdoğan voiced his opposition, accusing both Sweden and Finland of tolerating Kurdish militant groups PPK and the YPG, which Turkey classifies as terrorist organizations, and followers of Fethullah Gülen, whom Turkey accuses of orchestrating a failed 2016 Turkish coup d'état attempt. Stoltenberg said that Turkey has "legitimate concerns" about Sweden and Finland joining the alliance.


title: Jens Stoltenberg

text: On 30 November at the Bucharest meeting of NATO Foreign Ministers, were invited their counterparts from Moldova, Bosnia and Georgia, as well as Finland and Sweden. In his closing press conference Stoltenberg said that NATO expressed its solidarity with all three partners and also that "if there is one lesson learned from Ukraine it is that we need to support them now. The more support we are able to provide to these countries. The more support we are able to provide to these countries... under Russian pressure and influence in different ways... it is much better to support them now than when we have seen developments going in absolutely the wrong direction as we saw with the invasion of Ukraine earlier this year."


title: Jens Stoltenberg

text: In December 2021, it was reported that he sought the governorship of Norges Bank, Norway's central bank.


title: Jens Stoltenberg

text: It was speculated that Stoltenberg would be nominated as Governor of the Norges Bank, which sources told Dagens Næringsliv in November 2021, said he would accept if he was nominated for the position. Stoltenberg’s press advisor, Sissel Kruse Larsen, told Dagens Nærlingsliv that it was still too early to say what Stoltenberg would do once he returns home to Norway. Stoltenberg confirmed on 14 December that he had applied for the position, and specified that he had told the Ministry of Finance that he could not ascend to the position before his term as NATO Secretary-General has expired on 1 October 2022.


title: Jens Stoltenberg

text: His nomination was controversial prior to being officially announced, due to his links to the Labour Party, friendship with Prime Minister Jonas Gahr Støre and concerns for the independence of the central bank. His pre-nomination was opposed by all opposition parties, with support only coming from the government parties and the Christian Democratic Party.


title: Jens Stoltenberg

text: His appointment was officially announced on 4 February 2022. However, after a NATO summit in March 2022 concerning the war in Ukraine, Stoltenberg accepted a renewed term of one year to continue as NATO secretary-general and thereby resigned as incoming central bank governor. Acting Governor Ida Wolden Bache was instead given the term that Stoltenberg was meant to take on.


title: Jens Stoltenberg

text: In August 2013, Stoltenberg said on his Facebook page that he had spent an afternoon working "incognito" as a taxi driver in Oslo. Stoltenberg said he had wanted to "hear from real Norwegian voters" and that "taxis were one of the few places where people shared their true views." He added that, before driving the taxi, he had not driven a car in eight years. The event was videotaped in a hidden camera fashion, and released as a promotional video by the Labour party for the election campaign. It was later confirmed that 5 of the 14 customers were paid and recruited by the production company that produced the event for the Labour Party; however, none knew that they would meet Stoltenberg.


title: Jens Stoltenberg

text: On 12 July 2020 Stoltenberg was the invited guest on the long running "BBC Radio 4" programme "Desert Island Discs".


title: Jens Stoltenberg

text: His musical choices included "Hungry Heart," sung by Bruce Springsteen; "So Long, Marianne," by Leonard Cohen; and "No Harm," by the duo Smerz, one of whom is his daughter Catharina.


title: Jens Stoltenberg

text: In the crime drama "22 July", which depicts the 2011 Norway attacks, he is played by actor Ola G. Furuseth.


title: Jens Stoltenberg

text: Stoltenberg participated in protest rallies against the U.S. war in Vietnam in the 1970s. In 2011, Stoltenberg said "We sang the chorus, ‘Singing Norway, Norway out of Nato.' It was a hit."


title: Jens Stoltenberg

text: In 2001, Stoltenberg crashed his Labour Party-owned car into a parked car; he then left the premises without leaving a note with his name or number; the damages cost 8000 Norwegian kroner to repair.


title: Jens Stoltenberg

text: In 2002, Stoltenberg admitted to having used hashish (cannabis) in his youth. He therefore asked the Ministry of Justice and Public Security to evaluate his impartiality in the upcoming government response to the report on drugs by the Stoltenberg Commission, headed by his father, Thorvald Stoltenberg.


title: Jens Stoltenberg

text: In 2011 Stoltenberg got a 380,000 kroner boat as a birthday gift from the Norwegian Labour Party and the Norwegian Confederation of Trade Unions; the givers also paid the tax for the gift which led to criticism.


title: Jens Stoltenberg

text: Stoltenberg is married to diplomat Ingrid Schulerud and they have two children: a son, Axel Stoltenberg (born 1989) who is studying Chinese at the Shanghai Jiaotong University and daughter Anne Catharina Stoltenberg (born 1992) who is a part of Smerz, an experimental pop and electronic music duo signed to XL Recordings.


title: Jens Stoltenberg

text: He has one living sister, Camilla, a medical researcher and administrator who is one year older than him; and one late sister, Nini, four years younger, who died in 2014. Nini was a recovering heroin addict, and the Norwegian media have covered the family's efforts to cope with this challenge.


title: Jens Stoltenberg

text: He prefers to spend his summer vacations at his family's cottage on the idyllic Hvaler Islands in the Oslofjord. An avid outdoorsman, he rides his bike often and during the winter season he is an active cross-country skier. In December 2011, in order to mark 100 years since Roald Amundsen reached the south pole on skis, Stoltenberg journeyed to Antarctica.


title: Jens Stoltenberg

text: Although being portrayed as a staunch atheist for most of his adult life, and declining membership in the formerly official Church of Norway, Stoltenberg has stated that he does not consider himself an atheist. He explained: "Although I am not a member of any denomination, I do believe that there is something greater than man. Some call it God, others call it something else. For me, it's about understanding that we humans are small in relation to nature, in relation to the powers that are bigger and stronger than man can ever comprehend. I find that in a church."


title: John Maynard Keynes

text: John Maynard Keynes, 1st Baron Keynes, ( ; 5 June 1883 – 21 April 1946), was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles. One of the most influential economists of the 20th century, he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots. His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics.


title: John Maynard Keynes

text: Keynes's intellect was evident early in life; in 1902, he gained admittance to the competitive mathematics program at King's College at the University of Cambridge.


title: John Maynard Keynes

text: During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labour costs are rigid downwards the economy will not automatically rebound to full employment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. He detailed these ideas in his magnum opus, "The General Theory of Employment, Interest and Money", published in late 1936. By the late 1930s, leading Western economies had begun adopting Keynes's policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes's death in 1946. As a leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II but was overruled by the American delegation on several aspects.


title: John Maynard Keynes

text: Keynes's influence started to wane in the 1970s, partly as a result of the stagflation that plagued the Anglo-American economies during that decade, and partly because of criticism of Keynesian policies by Milton Friedman and other monetarists, who disputed the ability of government to favourably regulate the business cycle with fiscal policy. However, the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the financial crisis of 2007–2008 by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.


title: John Maynard Keynes

text: When "Time" magazine included Keynes among its in 1999, it reported that "his radical idea that governments should spend money they don't have may have saved capitalism." "The Economist" has described Keynes as "Britain's most famous 20th-century economist." In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals.


title: John Maynard Keynes

text: John Maynard Keynes was born in Cambridge, England, to an upper-middle-class family. His father, John Neville Keynes, was an economist and a lecturer in moral sciences at the University of Cambridge and his mother, Florence Ada Keynes, a local social reformer. Keynes was the first born, and was followed by two more childrenMargaret Neville Keynes in 1885 and Geoffrey Keynes in 1887. Geoffrey became a surgeon and Margaret married the Nobel Prize-winning physiologist Archibald Hill, although she had many affairs with women, notably Eglantyne Jebb.


title: John Maynard Keynes

text: According to the economic historian and biographer Robert Skidelsky, Keynes's parents were loving and attentive. They attended a Congregational Church and remained in the same house throughout their lives, where the children were always welcome to return. Keynes received considerable support from his father, including expert coaching to help him pass his scholarship exams and financial help both as a young man and when his assets were nearly wiped out at the onset of Great Depression in 1929. Keynes's mother made her children's interests her own, and according to Skidelsky, "because she could grow up with her children, they never outgrew home".


title: John Maynard Keynes

text: In January 1889, at the age of five and a half, Keynes started at the kindergarten of the Perse School for Girls for five mornings a week. He quickly showed a talent for arithmetic, but his health was poor leading to several long absences. He was tutored at home by a governess, Beatrice Mackintosh, and his mother. In January 1892, at eight and a half, he started as a day pupil at St Faith's preparatory school. By 1894, Keynes was top of his class and excelling at mathematics. In 1896, St Faith's headmaster, Ralph Goodchild, wrote that Keynes was "head and shoulders above all the other boys in the school" and was confident that Keynes could get a scholarship to Eton.


title: John Maynard Keynes

text: In 1897, Keynes won a King's Scholarship to Eton College, where he displayed talent in a wide range of subjects, particularly mathematics, classics and history: in 1901, he was awarded the Tomline Prize for mathematics. At Eton, Keynes experienced the first "love of his life" in Dan Macmillan, older brother of the future Prime Minister Harold Macmillan. Despite his middle-class background, Keynes mixed easily with upper-class pupils.


title: John Maynard Keynes

text: In 1902, Keynes left Eton for King's College, Cambridge, after receiving a scholarship for this also to read mathematics. Alfred Marshall begged Keynes to become an economist, although Keynes's own inclinations drew him towards philosophy, especially the ethical system of G. E. Moore. Keynes was elected to the University Pitt Club and was an active member of the semi-secretive Cambridge Apostles society, a debating club largely reserved for the brightest students. Like many members, Keynes retained a bond to the club after graduating and continued to attend occasional meetings throughout his life. Before leaving Cambridge, Keynes became the President of the Cambridge Union Society and Cambridge University Liberal Club. He was said to be an atheist.


title: John Maynard Keynes

text: In May 1904, he received a first-class BA in mathematics. Aside from a few months spent on holidays with family and friends, Keynes continued to involve himself with the university over the next two years. He took part in debates, further studied philosophy and attended economics lectures informally as a graduate student for one term, which constituted his only formal education in the subject. He took civil service exams in 1906.


title: John Maynard Keynes

text: The economist Harry Johnson wrote that the optimism imparted by Keynes's early life is a key to understanding his later thinking.


title: John Maynard Keynes

text: Keynes was always confident he could find a solution to whatever problem he turned his attention to and retained a lasting faith in the ability of government officials to do good.


title: John Maynard Keynes

text: Keynes's optimism was also cultural, in two senses: he was of the last generation raised by an empire still at the height of its power and was also of the last generation who felt entitled to govern by culture, rather than by expertise. According to Skidelsky, the sense of cultural unity current in Britain from the 19th century to the end of World War I provided a framework with which the well-educated could set various spheres of knowledge in relation to each other and life, enabling them to confidently draw from different fields when addressing practical problems.


title: John Maynard Keynes

text: In October 1906 Keynes began his Civil Service career as a clerk in the India Office. He enjoyed his work at first, but by 1908 had become bored and resigned his position to return to Cambridge and work on probability theory, through a lectureship in economics at first funded personally by economists Alfred Marshall and Arthur Pigou; he became a fellow of King's College in 1909.


title: John Maynard Keynes

text: By 1909 Keynes had also published his first professional economics article in "The Economic Journal", about the effect of a recent global economic downturn on India. He founded the Political Economy Club, a weekly discussion group. Keynes's earnings rose further as he began to take on pupils for private tuition.


title: John Maynard Keynes

text: In 1911 Keynes was made the editor of "The Economic Journal". By 1913 he had published his first book, "Indian Currency and Finance". He was then appointed to the Royal Commission on Indian Currency and Financethe same topic as his bookwhere Keynes showed considerable talent at applying economic theory to practical problems. His written work was published under the name "J M Keynes", though to his family and friends he was known as Maynard. (His father, John Neville Keynes, was also always known by his middle name).


title: John Maynard Keynes

text: The British Government called on Keynes's expertise during the First World War. While he did not formally re-join the civil service in 1914, Keynes travelled to London at the government's request a few days before hostilities started. Bankers had been pushing for the suspension of specie paymentsthe gold equivalent of banknotesbut with Keynes's help the Chancellor of the Exchequer (then Lloyd George) was persuaded that this would be a bad idea, as it would hurt the future reputation of the city if payments were suspended before it was necessary.


title: John Maynard Keynes

text: In January 1915 Keynes took up an official government position at the Treasury. Among his responsibilities were the design of terms of credit between Britain and its continental allies during the war and the acquisition of scarce currencies. According to economist Robert Lekachman, Keynes's "nerve and mastery became legendary" because of his performance of these duties, as in the case where he managed to assemblewith difficultya small supply of Spanish pesetas.


title: John Maynard Keynes

text: The secretary of the Treasury was delighted to hear Keynes had amassed enough to provide a temporary solution for the British Government. But Keynes did not hand the pesetas over, choosing instead to sell them all to break the market: his boldness paid off, as pesetas then became much less scarce and expensive.


title: John Maynard Keynes

text: On the introduction of military conscription in 1916, he applied for exemption as a conscientious objector, which was effectively granted conditional upon continuing his government work.


title: John Maynard Keynes

text: In the 1917 King's Birthday Honours, Keynes was appointed Companion of the Order of the Bath for his wartime work, and his success led to the appointment that had a huge effect on Keynes's life and career; Keynes was appointed financial representative for the Treasury to the 1919 Versailles peace conference. He was also appointed Officer of the Belgian Order of Leopold.


title: John Maynard Keynes

text: Keynes's experience at Versailles was influential in shaping his future outlook, yet it was not a successful one. Keynes's main interest had been in trying to prevent Germany's compensation payments being set so high it would traumatise innocent German people, damage the nation's ability to pay and sharply limit its ability to buy exports from other countriesthus hurting not just Germany's economy but that of the wider world.


title: John Maynard Keynes

text: Unfortunately for Keynes, conservative powers in the coalition that emerged from the 1918 coupon election were able to ensure that both Keynes himself and the Treasury were largely excluded from formal high-level talks concerning reparations. Their place was taken by the Heavenly Twinsthe judge Lord Sumner and the banker Lord Cunliffe, whose nickname derived from the "astronomically" high war compensation they wanted to demand from Germany. Keynes was forced to try to exert influence mostly from behind the scenes.


title: John Maynard Keynes

text: The three principal players at Versailles were Britain's Lloyd George, France's Clemenceau and America's President Wilson.


title: John Maynard Keynes

text: It was only Lloyd George to whom Keynes had much direct access; until the 1918 election he had some sympathy with Keynes's view but while campaigning had found his speeches were well received by the public only if he promised to harshly punish Germany, and had therefore committed his delegation to extracting high payments.


title: John Maynard Keynes

text: Lloyd George did, however, win some loyalty from Keynes with his actions at the Paris conference by intervening against the French to ensure the dispatch of much-needed food supplies to German civilians. Clemenceau also pushed for substantial reparations, though not as high as those proposed by the British, while on security grounds, France argued for an even more severe settlement than Britain.


title: John Maynard Keynes

text: Wilson initially favoured relatively lenient treatment of Germanyhe feared too harsh conditions could foment the rise of extremism and wanted Germany to be left sufficient capital to pay for imports. To Keynes's dismay, Lloyd George and Clemenceau were able to pressure Wilson to agree to include pensions in the reparations bill.


title: John Maynard Keynes

text: Towards the end of the conference, Keynes came up with a plan that he argued would not only help Germany and other impoverished central European powers but also be good for the world economy as a whole. It involved the radical writing down of war debts, which would have had the possible effect of increasing international trade all round, but at the same time thrown over two-thirds of the cost of European reconstruction on the United States.


title: John Maynard Keynes

text: Lloyd George agreed it might be acceptable to the British electorate. However, America was against the plan; the US was then the largest creditor, and by this time Wilson had started to believe in the merits of a harsh peace and thought that his country had already made excessive sacrifices. Hence despite his best efforts, the result of the conference was a treaty which disgusted Keynes both on moral and economic grounds and led to his resignation from the Treasury.


title: John Maynard Keynes

text: In June 1919 he turned down an offer to become chairman of the British Bank of Northern Commerce, a job that promised a salary of £2000 in return for a morning per week of work.


title: John Maynard Keynes

text: Keynes's analysis on the predicted damaging effects of the treaty appeared in the highly influential book, "The Economic Consequences of the Peace", published in 1919. This work has been described as Keynes's best book, where he was able to bring all his gifts to bearhis passion as well as his skill as an economist. In addition to economic analysis, the book contained appeals to the reader's sense of compassion:


title: John Maynard Keynes

text: Also present was striking imagery such as "year by year Germany must be kept impoverished and her children starved and crippled" along with bold predictions which were later justified by events:


title: John Maynard Keynes

text: Keynes's followers assert that his predictions of disaster were borne out when the German economy suffered the hyperinflation of 1923, and again by the collapse of the Weimar Republic and the outbreak of the Second World War. However, historian Ruth Henig claims that "most historians of the Paris peace conference now take the view that, in economic terms, the treaty was not unduly harsh on Germany and that, while obligations and damages were inevitably much stressed in the debates at Paris to satisfy electors reading the daily newspapers, the intention was quietly to give Germany substantial help towards paying her bills, and to meet many of the German objections by amendments to the way the reparations schedule was in practice carried out".


title: John Maynard Keynes

text: Only a small fraction of reparations was ever paid. In fact, historian Stephen A. Schuker demonstrates in "American 'Reparations' to Germany, 1919–33", that the capital inflow from American loans substantially exceeded German out payments so that, on a net basis, Germany received support equal to four times the amount of the post-Second World War Marshall Plan.


title: John Maynard Keynes

text: Schuker also shows that, in the years after Versailles, Keynes became an informal reparations adviser to the German government, wrote one of the major German reparation notes, and supported the hyperinflation on political grounds. Nevertheless, "The Economic Consequences of the Peace" gained Keynes international fame, even though it also caused him to be regarded as anti-establishmentit was not until after the outbreak of the Second World War that Keynes was offered a directorship of a major British Bank, or an acceptable offer to return to government with a formal job. However, Keynes was still able to influence government policy making through his network of contacts, his published works and by serving on government committees; this included attending high-level policy meetings as a consultant.


title: John Maynard Keynes

text: Keynes had completed his "A Treatise on Probability" before the war but published it in 1921. The work was a notable contribution to the philosophical and mathematical underpinnings of probability theory, championing the important view that "probabilities" were no more or less than truth values intermediate between simple truth and falsity. Keynes developed the first upper-lower probabilistic interval approach to probability in chapters 15 and 17 of this book, as well as having developed the first decision weight approach with his conventional coefficient of risk and weight, "c", in chapter 26. In addition to his academic work, the 1920s saw Keynes active as a journalist selling his work internationally and working in London as a financial consultant. In 1924 Keynes wrote an obituary for his former tutor Alfred Marshall which Joseph Schumpeter called "the most brilliant life of a man of science I have ever read."


title: John Maynard Keynes

text: Mary Paley Marshall was "entranced" by the memorial, while Lytton Strachey rated it as one of Keynes's "best works".


title: John Maynard Keynes

text: In 1922 Keynes continued to advocate reduction of German reparations with "A Revision of the Treaty". He attacked the post-World War I deflation policies with "A Tract on Monetary Reform" in 1923a trenchant argument that countries should target stability of domestic prices, avoiding deflation even at the cost of allowing their currency to depreciate. Britain suffered from high unemployment through most of the 1920s, leading Keynes to recommend the depreciation of sterling to boost jobs by making British exports more affordable. From 1924 he was also advocating a fiscal response, where the government could create jobs by spending on public works. During the 1920s Keynes's pro stimulus views had only limited effect on policy makers and mainstream academic opinionaccording to Hyman Minsky one reason was that at this time his theoretical justification was "muddled". The "Tract" had also called for an end to the gold standard. Keynes advised it was no longer a net benefit for countries such as Britain to participate in the gold standard, as it ran counter to the need for domestic policy autonomy. It could force countries to pursue deflationary policies at exactly the time when expansionary measures were called for to address rising unemployment. The Treasury and Bank of England were still in favour of the gold standard and in 1925 they were able to convince the then Chancellor Winston Churchill to re-establish it, which had a depressing effect on British industry. Keynes responded by writing "The Economic Consequences of Mr. Churchill" and continued to argue against the gold standard until Britain finally abandoned it in 1931.


title: John Maynard Keynes

text: Keynes had begun a theoretical work to examine the relationship between unemployment, money and prices back in the 1920s. The work, "Treatise on Money", was published in 1930 in two volumes. A central idea of the work was that if the amount of money being saved exceeds the amount being investedwhich can happen if interest rates are too highthen unemployment will rise. This is in part a result of people not wanting to spend too high a proportion of what employers pay out, making it difficult, in aggregate, for employers to make a profit. Another key theme of the book is the unreliability of financial indices for representing an accurateor indeed meaningfulindication of general shifts in purchasing power of currencies over time. In particular, he criticised the justification of Britain's return to the gold standard in 1925 at pre-war valuation by reference to the wholesale price index. He argued that the index understated the effects of changes in the costs of services and labour.


title: John Maynard Keynes

text: Keynes was deeply critical of the British government's austerity measures during the Great Depression. He believed that budget deficits during recessions were a good thing and a natural product of an economic slump. He wrote, "For Government borrowing of one kind or another is nature's remedy, so to speak, for preventing business losses from being, in so severe a slump as the present one, so great as to bring production altogether to a standstill."


title: John Maynard Keynes

text: At the height of the Great Depression, in 1933, Keynes published "The Means to Prosperity", which contained specific policy recommendations for tackling unemployment in a global recession, chiefly counter-cyclical public spending. "The Means to Prosperity" contains one of the first mentions of the multiplier effect. While it was addressed chiefly to the British Government, it also contained advice for other nations affected by the global recession. A copy was sent to the newly elected President Franklin D. Roosevelt and other world leaders. The work was taken seriously by both the American and British governments, and according to Robert Skidelsky, helped pave the way for the later acceptance of Keynesian ideas, though it had little immediate practical influence. In the 1933 London Economic Conference opinions remained too diverse for a unified course of action to be agreed upon.


title: John Maynard Keynes

text: Keynesian-like policies were adopted by Sweden and Germany, but Sweden was seen as too small to command much attention, and Keynes was deliberately silent about the as he was dismayed by its imperialist ambitions and its treatment of Jews. Apart from Great Britain, Keynes's attention was primarily focused on the United States. In 1931, he received considerable support for his views on counter-cyclical public spending in Chicago, then America's foremost center for economic views alternative to the mainstream. However, orthodox economic opinion remained generally hostile regarding fiscal intervention to mitigate the depression, until just before the outbreak of war. In late 1933 Keynes was persuaded by Felix Frankfurter to address President Roosevelt directly, which he did by letters and face to face in 1934, after which the two men spoke highly of each other. However, according to Skidelsky, the consensus is that Keynes's efforts began to have a more than marginal influence on US economic policy only after 1939.


title: John Maynard Keynes

text: Keynes's "magnum opus", "The General Theory of Employment, Interest and Money" was published in 1936. It was researched and indexed by one of Keynes's favourite students, later the economist David Bensusan-Butt. The work served as a theoretical justification for the interventionist policies Keynes favoured for tackling a recession. Although Keynes stated in his preface that his General Theory was only secondarily concerned with the "applications of this theory to practice," the circumstances of its publication were such that his suggestions shaped the course of the 1930s. In addition, Keynes introduced the world to a new interpretation of taxation: since the legal tender is now defined by the state, inflation becomes "taxation by currency depreciation". This hidden tax meant a) that the standard of value should be governed by deliberate decision; and (b) that it was possible to maintain a middle course between deflation and inflation. This novel interpretation was inspired by the desperate search for control over the economy which permeated the academic world after the Depression. The "General Theory" challenged the earlier neoclassical economic paradigm, which had held that provided it was unfettered by government interference, the market would naturally establish full employment equilibrium. In doing so Keynes was partly setting himself against his former teachers Marshall and Pigou. Keynes believed the classical theory was a "special case" that applied only to the particular conditions present in the 19th century, his theory being the general one. Classical economists had believed in Say's law, which, simply put, states that "supply creates its demand", and that in a free market workers would always be willing to lower their wages to a level where employers could profitably offer them jobs.


title: John Maynard Keynes

text: An innovation from Keynes was the concept of price stickinessthe recognition that in reality workers often refuse to lower their wage demands even in cases where a classical economist might argue that it is rational for them to do so. Due in part to price stickiness, it was established that the interaction of "aggregate demand" and "aggregate supply" may lead to stable unemployment equilibriaand in those cases, it is on the state, not the market, that economies must depend for their salvation. In contrast, Keynes argued that demand is what creates supply and not the other way around. He questioned Say's Law by asking what would happen if the money that is being given to individuals is not finding its way back into the economy and is saved instead? He suggested the result would be a recession. To tackle the fear of a recession Say's Law suggests government intervention. This government intervention can be used to prevent any further increase in savings in the form of a decreased interest rate. Decreasing the interest rate will encourage people to start spending and investing again, or so it is stated by Say's Law. The reason behind this is that when there is little investing, savings start to accumulate and reach a stopping point in the flow of money. During the normal economic activity, it would be justified to have savings because they can be given out as loans but in this case, there is little demand for them, so they are doing no good for the economy. The supply of savings then exceeds the demand for loans and the result is lower prices or lower interest rates. Thus, the idea is that the money that was once saved is now re-invested or spent, assuming lower interest rates appeal to consumers. To Keynes, however, this was not always the case, and it couldn't be assumed that lower interest rates would automatically encourage investment and spending again since there is no proven link between the two.


title: John Maynard Keynes

text: The "General Theory" argues that demand, not supply, is the key variable governing the overall level of economic activity. Aggregate demand, which equals total un-hoarded income in a society, is defined by the sum of consumption and investment. In a state of unemployment and unused production capacity, one can enhance employment and total income "only" by "first" increasing expenditures for either consumption or investment. Without government intervention to increase expenditure, an economy can remain trapped in a low-employment equilibrium. The demonstration of this possibility has been described as the revolutionary formal achievement of the work.


title: John Maynard Keynes

text: The book advocated activist economic policy by government to stimulate demand in times of high unemployment, for example by spending on public works. "Let us be up and doing, using our idle resources to increase our wealth," he wrote in 1928. "With men and plants unemployed, it is ridiculous to say that we cannot afford these new developments. It is precisely with these plants and these men that we shall afford them."


title: John Maynard Keynes

text: The "General Theory" is often viewed as the foundation of modern macroeconomics. Few senior American economists agreed with Keynes through most of the 1930s.


title: John Maynard Keynes

text: Yet his ideas were soon to achieve widespread acceptance, with eminent American professors such as Alvin Hansen agreeing with the "General Theory" before the outbreak of World War II.


title: John Maynard Keynes

text: Keynes himself had only limited participation in the theoretical debates that followed the publication of the "General Theory" as he suffered a heart attack in 1937, requiring him to take long periods of rest. Among others, Hyman Minsky and Post-Keynesian economists have argued that as result, Keynes's ideas were diluted by those keen to compromise with classical economists or to render his concepts with mathematical models like the IS–LM model (which, they argue, distort Keynes's ideas). Keynes began to recover in 1939, but for the rest of his life his professional energies were directed largely towards the practical side of economics: the problems of ensuring optimum allocation of resources for the war efforts, post-war negotiations with America, and the new international financial order that was presented at the Bretton Woods Conference.


title: John Maynard Keynes

text: In the "General Theory" and later, Keynes responded to the socialists who argued, especially during the Great Depression of the 1930s, that capitalism caused war. He argued that if capitalism were managed domestically and internationally (with coordinated international Keynesian policies, an international monetary system that did not pit the interests of countries against one another, and a high degree of freedom of trade), then this system of managed capitalism could promote peace rather than conflict between countries. His plans during World War II for post-war international economic institutions and policies (which contributed to the creation at Bretton Woods of the International Monetary Fund and the World Bank, and later to the creation of the General Agreement on Tariffs and Trade and eventually the World Trade Organization) were aimed to give effect to this vision.


title: John Maynard Keynes

text: Although Keynes has been widely criticisedespecially by members of the Chicago school of economicsfor advocating irresponsible government spending financed by borrowing, in fact he was a firm believer in balanced budgets and regarded the proposals for programs of public works during the Great Depression as an exceptional measure to meet the needs of exceptional circumstances.


title: John Maynard Keynes

text: During the Second World War, Keynes argued in "How to Pay for the War", published in 1940, that the war effort should be largely financed by higher taxation and especially by compulsory saving (essentially workers lending money to the government), rather than deficit spending, to avoid inflation. Compulsory saving would act to dampen domestic demand, assist in channelling additional output towards the war efforts, would be fairer than punitive taxation and would have the advantage of helping to avoid a post-war slump by boosting demand once workers were allowed to withdraw their savings. In September 1941 he was proposed to fill a vacancy in the Court of Directors of the Bank of England, and subsequently carried out a full term from the following April. In June 1942, Keynes was rewarded for his service with a hereditary peerage in the King's Birthday Honours. On 7 July his title was gazetted as "Baron Keynes, of Tilton, in the County of Sussex" and he took his seat in the House of Lords on the Liberal Party benches.


title: John Maynard Keynes

text: By contrast, in his capacity as advisor on the Indian Financial and Monetary Affairs for the British Government, there is evidence that Keynes advocated "profit inflation" in order to finance war spending by the Allied forces in Bengal. This deliberate inflationary policy, which caused a sixfold increase in the price of rice, contributed to the 1943 Bengal famine.


title: John Maynard Keynes

text: As the Allied victory began to look certain, Keynes was heavily involved, as leader of the British delegation and chairman of the World Bank commission, in the mid-1944 negotiations that established the Bretton Woods system. The Keynes plan, concerning an international clearing-union, argued for a radical system for the management of currencies. He proposed the creation of a common world unit of currency, the bancor and new global institutionsa world central bank and the International Clearing Union. Keynes envisaged these institutions managing an international trade and payments system with strong incentives for countries to avoid substantial trade deficits or surpluses. The USA's greater negotiating strength, however, meant that the outcomes accorded more closely to the more conservative plans of Harry Dexter White. According to US economist J. Bradford DeLong, on almost every point where he was overruled by the Americans, Keynes was later proven correct by events.


title: John Maynard Keynes

text: The two new institutions, later known as the World Bank and the International Monetary Fund (IMF), were founded as a compromise that primarily reflected the American vision. There would be no incentives for states to avoid a large trade surplus; instead, the burden for correcting a trade imbalance would continue to fall only on the deficit countries, which Keynes had argued were least able to address the problem without inflicting economic hardship on their populations. Yet, Keynes was still pleased when accepting the final agreement, saying that if the institutions stayed true to their founding principles, "the brotherhood of man will have become more than a phrase."


title: John Maynard Keynes

text: After the war, Keynes continued to represent the United Kingdom in international negotiations despite his deteriorating health. He succeeded in obtaining preferential terms from the United States for new and outstanding debts to facilitate the rebuilding of the British economy.


title: John Maynard Keynes

text: Just before his death in 1946, Keynes told Henry Clay, a professor of social economics and advisor to the Bank of England, of his hopes that Adam Smith's "invisible hand" could help Britain out of the economic hole it was in: "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."


title: John Maynard Keynes

text: From the end of the Great Depression to the mid-1970s, Keynes provided the main inspiration for economic policymakers in Europe, America and much of the rest of the world. While economists and policymakers had become increasingly won over to Keynes's way of thinking in the mid and late 1930s, it was only after the outbreak of World War II that governments started to borrow money for spending on a scale sufficient to eliminate unemployment. According to the economist John Kenneth Galbraith (then a US government official charged with controlling inflation), in the rebound of the economy from wartime spending, "one could not have had a better demonstration of the Keynesian ideas."


title: John Maynard Keynes

text: The Keynesian Revolution was associated with the rise of modern liberalism in the West during the post-war period. Keynesian ideas became so popular that some scholars point to Keynes as representing the ideals of modern liberalism, as Adam Smith represented the ideals of classical liberalism. After the war, Winston Churchill attempted to check the rise of Keynesian policy-making in the United Kingdom and used rhetoric critical of the mixed economy in his 1945 election campaign. Despite his popularity as a war hero, Churchill suffered a landslide defeat to Clement Attlee, whose government's economic policy continued to be influenced by Keynes's ideas.


title: John Maynard Keynes

text: In the late 1930s and 1940s, economists (notably John Hicks, Franco Modigliani and Paul Samuelson) attempted to interpret and formalise Keynes's writings in terms of formal mathematical models. In what had become known as the neoclassical synthesis, they combined Keynesian analysis with neoclassical economics to produce neo-Keynesian economics, which came to dominate mainstream macroeconomic thought for the next 40 years.


title: John Maynard Keynes

text: By the 1950s, Keynesian policies were adopted by almost the entire developed world and similar measures for a mixed economy were used by many developing nations. By then, Keynes's views on the economy had become mainstream in the world's universities. Throughout the 1950s and 1960s, the developed and emerging free capitalist economies enjoyed exceptionally high growth and low unemployment. Professor Gordon Fletcher has written that the 1950s and 1960s, when Keynes's influence was at its peak, appear in retrospect as a golden age of capitalism.


title: John Maynard Keynes

text: In late 1965 "Time" magazine ran a cover article with a title comment from Milton Friedman (later echoed by US President Richard Nixon), "We are all Keynesians now". The article described the exceptionally favourable economic conditions then prevailing, and reported that "Washington's economic managers scaled these heights by their adherence to Keynes's central theme: the modern capitalist economy does not automatically work at top efficiency, but can be raised to that level by the intervention and influence of the government." The article also states that Keynes was one of the three most important economists who ever lived, and that his "General Theory" was more influential than the "magna opera" of other famous economists, like Adam Smith's "The Wealth of Nations".


title: John Maynard Keynes

text: The concept of multiplier was first developed by R. F. Kahn in his article "The relation of home investment to unemployment" In the economic journal of June 1931. Kahn multiplier was the employment multiplier while as Keynes took the idea from Kahn and formulated the investment multiplier.


title: John Maynard Keynes

text: Keynesian economics were officially discarded by the British Government in 1979, but forces had begun to gather against Keynes's ideas over 30 years earlier. Friedrich Hayek had formed the Mont Pelerin Society in 1947, with the explicit intention of nurturing intellectual currents to one day displace Keynesianism and other similar influences. Its members included the Austrian School economist Ludwig von Mises along with the then young Milton Friedman. Initially the society had little impact on the wider worldaccording to Hayek it was as if Keynes had been raised to sainthood after his death and that people refused to allow his work to be questioned.


title: John Maynard Keynes

text: Friedman however began to emerge as a formidable critic of Keynesian economics from the mid-1950s, and especially after his 1963 publication of "A Monetary History of the United States".


title: John Maynard Keynes

text: On the practical side of economic life, "big government" had appeared to be firmly entrenched in the 1950s, but the balance began to shift towards the power of private interests in the 1960s. Keynes had written against the folly of allowing "decadent and selfish" speculators and financiers the kind of influence they had enjoyed after World War I. For two decades after World War II the public opinion was strongly against private speculators, the disparaging label "Gnomes of Zürich" being typical of how they were described during this period. International speculation was severely restricted by the capital controls in place after Bretton Woods. According to the journalists Larry Elliott and Dan Atkinson, 1968 was the pivotal year when power shifted in favour of private agents such as currency speculators. As the key 1968 event Elliott and Atkinson picked out America's suspension of the conversion of the dollar into gold except on request of foreign governments, which they identified as the beginning of the breakdown of the Bretton Woods system.


title: John Maynard Keynes

text: Criticisms of Keynes's ideas had begun to gain significant acceptance by the early 1970s, as they were then able to make a credible case that Keynesian models no longer reflected economic reality. Keynes himself included few formulas and no explicit mathematical models in his "General Theory". For economists such as Hyman Minsky, Keynes's limited use of mathematics was partly the result of his scepticism about whether phenomena as inherently uncertain as economic activity could ever be adequately captured by mathematical models. Nevertheless, many models were developed by Keynesian economists, with a famous example being the Phillips curve which predicted an inverse relationship between unemployment and inflation. It implied that unemployment could be reduced by government stimulus with a calculable cost to inflation. In 1968, Milton Friedman published a paper arguing that the fixed relationship implied by the Philips curve did not exist.


title: John Maynard Keynes

text: Friedman suggested that sustained Keynesian policies could lead to both unemployment and inflation rising at oncea phenomenon that soon became known as stagflation. In the early 1970s stagflation appeared in both the US and Britain just as Friedman had predicted, with economic conditions deteriorating further after the 1973 oil crisis. Aided by the prestige gained from his successful forecast, Friedman led increasingly successful criticisms against the Keynesian consensus, convincing not only academics and politicians but also much of the general public with his radio and television broadcasts. The academic credibility of Keynesian economics was further undermined by additional criticism from other monetarists trained in the Chicago school of economics, by the Lucas critique and by criticisms from Hayek's Austrian School. So successful were these criticisms that by 1980 Robert Lucas claimed economists would often take offence if described as Keynesians.


title: John Maynard Keynes

text: Keynesian principles fared increasingly poorly on the practical side of economicsby 1979 they had been displaced by monetarism as the primary influence on Anglo-American economic policy. However, many officials on both sides of the Atlantic retained a preference for Keynes, and in 1984 the Federal Reserve officially discarded monetarism, after which Keynesian principles made a partial comeback as an influence on policy making.


title: John Maynard Keynes

text: Not all academics accepted the criticism against KeynesMinsky has argued that Keynesian economics had been debased by excessive mixing with neoclassical ideas from the 1950s, and that it was unfortunate that this branch of economics had even continued to be called "Keynesian". Writing in "The American Prospect", Robert Kuttner argued it was not so much excessive Keynesian activism that caused the economic problems of the 1970s but the breakdown of the Bretton Woods system of capital controls, which allowed capital flight from regulated economies into unregulated economies in a fashion similar to Gresham's law phenomenon (where weak currencies undermine strong currencies).


title: John Maynard Keynes

text: Historian Peter Pugh has stated that a key cause of the economic problems afflicting America in the 1970s was the refusal to raise taxes to finance the Vietnam War, which was against Keynesian advice.


title: John Maynard Keynes

text: A more typical response was to accept some elements of the criticisms while refining Keynesian economic theories to defend them against arguments that would invalidate the whole Keynesian frameworkthe resulting body of work largely composing New Keynesian economics. In 1992 Alan Blinder wrote about a "Keynesian Restoration", as work based on Keynes's ideas had to some extent become fashionable once again in academia, though in the mainstream it was highly synthesised with monetarism and other neoclassical thinking. In the world of policy making, free market influences broadly sympathetic to monetarism have remained very strong at government levelin powerful normative institutions like the World Bank, the IMF and US Treasury, and in prominent opinion-forming media such as the "Financial Times" and "The Economist".


title: John Maynard Keynes

text: The global financial crisis of 2007–08 led to public skepticism about the free market consensus even from some on the economic right. In March 2008, Martin Wolf, chief economics commentator at the "Financial Times", announced the death of the dream of global free-market capitalism. In the same month macroeconomist James K. Galbraith used the 25th Annual Milton Friedman Distinguished Lecture to launch a sweeping attack against the consensus for monetarist economics and argued that Keynesian economics were far more relevant for tackling the emerging crises.


title: John Maynard Keynes

text: Economist Robert J. Shiller had begun advocating robust government intervention to tackle the financial crises, specifically citing Keynes.


title: John Maynard Keynes

text: Nobel laureate Paul Krugman also actively argued the case for vigorous Keynesian intervention in the economy in his columns for "The New York Times".


title: John Maynard Keynes

text: Other prominent economic commentators who have argued for Keynesian government intervention to mitigate the financial crisis include George Akerlof, J. Bradford DeLong, Robert Reich and Joseph Stiglitz.


title: John Maynard Keynes

text: Newspapers and other media have also cited work relating to Keynes by Hyman Minsky, Robert Skidelsky, Donald Markwell and Axel Leijonhufvud.


title: John Maynard Keynes

text: A series of major bailouts were pursued during the financial crisis, starting on 7 September with the announcement that the US Government was to nationalise the two government-sponsored enterprises which oversaw most of the US subprime mortgage marketFannie Mae and Freddie Mac. In October, Alistair Darling, the British Chancellor of the Exchequer, referred to Keynes as he announced plans for substantial fiscal stimulus to head off the worst effects of recession, in accordance with Keynesian economic thought. Similar policies have been adopted by other governments worldwide.


title: John Maynard Keynes

text: This is in stark contrast to the action imposed on Indonesia during the Asian financial crisis of 1997, when it was forced by the IMF to close 16 banks at the same time, prompting a bank run.


title: John Maynard Keynes

text: Much of the post-crisis discussion reflected Keynes's advocacy of international coordination of fiscal or monetary stimulus, and of international economic institutions such as the IMF and the World Bank, which many had argued should be reformed as a "new Bretton Woods", and should have been even before the crises broke out.


title: John Maynard Keynes

text: The IMF and United Nations economists advocated a coordinated international approach to fiscal stimulus.


title: John Maynard Keynes

text: Donald Markwell argued that in the absence of such an international approach, there would be a risk of worsening international relations and possibly even world war arising from economic factors similar to those present during the depression of the 1930s.


title: John Maynard Keynes

text: By the end of December 2008, the "Financial Times" reported that "the sudden resurgence of Keynesian policy is a stunning reversal of the orthodoxy of the past several decades."


title: John Maynard Keynes

text: In December 2008, Paul Krugman released his book "The Return of Depression Economics and the Crisis of 2008", arguing that economic conditions similar to those that existed during the earlier part of the 20th century had returned, making Keynesian policy prescriptions more relevant than ever. In February 2009 Robert J. Shiller and George Akerlof published "", a book where they argue the current US stimulus package is too small as it does not take into account Keynes's insight on the importance of confidence and expectations in determining the future behaviour of businesspeople and other economic agents.


title: John Maynard Keynes

text: In the March 2009 speech entitled "Reform the International Monetary System", Zhou Xiaochuan, the governor of the People's Bank of China, came out in favour of Keynes's idea of a centrally managed global reserve currency. Zhou argued that it was unfortunate that part of the reason for the Bretton Woods system breaking down was the failure to adopt Keynes's bancor. Zhou proposed a gradual move towards increased use of IMF special drawing rights (SDRs).


title: John Maynard Keynes

text: Although Zhou's ideas had not been broadly accepted, leaders meeting in April at the 2009 G-20 London summit agreed to allow $250 billion of special drawing rights to be created by the IMF, to be distributed globally. Stimulus plans were credited for contributing to a better than expected economic outlook by both the OECD


title: John Maynard Keynes

text: and the IMF, in reports published in June and July 2009. Both organisations warned global leaders that recovery was likely to be slow, so counter recessionary measures ought not be rolled back too early.


title: John Maynard Keynes

text: While the need for stimulus measures was broadly accepted among policy makers, there had been much debate over how to fund the spending. Some leaders and institutions, such as Angela Merkel


title: John Maynard Keynes

text: expressed concern over the potential impact on inflation, national debt and the risk that a too large stimulus will create an unsustainable recovery.


title: John Maynard Keynes

text: Among professional economists the revival of Keynesian economics has been even more divisive. Although many economists, such as George Akerlof, Paul Krugman, Robert Shiller and Joseph Stiglitz, supported Keynesian stimulus, others did not believe higher government spending would help the United States economy recover from the Great Recession. Some economists, such as Robert Lucas, questioned the theoretical basis for stimulus packages. Others, like Robert Barro and Gary Becker, say that empirical evidence for beneficial effects from Keynesian stimulus does not exist. However, there is a growing academic literature that shows that fiscal expansion helps an economy grow in the near term, and that certain types of fiscal stimulus are particularly effective.


title: John Maynard Keynes

text: New Keynesian economics developed in the 1990s and early 2000s as a response to the critique that macroeconomics lacked microeconomic foundations. New Keynesianism developed models to provide microfoundations for Keynesian economics. It incorporated parts of new classical macroeconomics to develop the new neoclassical synthesis, which forms the basis for mainstream macroeconomics today.


title: John Maynard Keynes

text: Two main assumptions define the New Keynesian approach to macroeconomics. Like the New Classical approach, New Keynesian macroeconomic analysis usually assumes that households and firms have rational expectations. However, the two schools differ in that New Keynesian analysis usually assumes a variety of market failures. In particular, New Keynesians assume that there is imperfect competition in price and wage setting to help explain why prices and wages can become "sticky", which means they do not adjust instantaneously to changes in economic conditions.


title: John Maynard Keynes

text: Wage and price stickiness, and the other market failures present in New Keynesian models, imply that the economy may fail to attain full employment. Therefore, New Keynesians argue that macroeconomic stabilization by the government (using fiscal policy) and the central bank (using monetary policy) can lead to a more efficient macroeconomic outcome than a "laissez faire" policy would.


title: John Maynard Keynes

text: On a personal level, Keynes's charm was such that he was generally well received wherever he wenteven those who found themselves on the wrong side of his occasionally sharp tongue rarely bore a grudge. Keynes's speech at the closing of the Bretton Woods negotiations was received with a lasting standing ovation, rare in international relations, as the delegates acknowledged the scale of his achievements made despite poor health.


title: John Maynard Keynes

text: Austrian School economist Friedrich Hayek was Keynes's most prominent contemporary critic, with sharply opposing views on the economy. Yet after Keynes's death, he wrote: "He was the one really great man I ever knew, and for whom I had unbounded admiration. The world will be a very much poorer place without him." A colleague Nicholas Davenport recalled, "There were deep emotional forces about Maynard ... One could sense his humanity. There was nothing of the cold intellectual about him."


title: John Maynard Keynes

text: Lionel Robbins, former head of the economics department at the London School of Economics, who engaged in many heated debates with Keynes in the 1930s, had this to say after observing Keynes in early negotiations with the Americans while drawing up plans for Bretton Woods:


title: John Maynard Keynes

text: Keynes's obituary in "The Times" included the comment: "There is the man himselfradiant, brilliant, effervescent, gay, full of impish jokes ... He was a humane man genuinely devoted to the cause of the common good."


title: John Maynard Keynes

text: As a man of the centre described by some as having the greatest impact of any 20th-century economist, Keynes attracted considerable criticism from both sides of the political spectrum. In the 1920s, Keynes was seen as anti-establishment and was mainly attacked from the right. In the "red 1930s", many young economists favoured Marxist views, even in Cambridge, and while Keynes was engaging principally with the right to try to persuade them of the merits of more progressive policy, the most vociferous criticism against him came from the left, who saw him as a supporter of capitalism. From the 1950s and onwards, most of the attacks against Keynes have again been from the right.


title: John Maynard Keynes

text: In 1931 Friedrich Hayek extensively critiqued Keynes's 1930 "Treatise on Money". After reading Hayek's "The Road to Serfdom", Keynes wrote to Hayek "Morally and philosophically I find myself in agreement with virtually the whole of it", but concluded the letter with the recommendation: On the pressing issue of the time, whether deficit spending could lift a country from depression, Keynes replied to Hayek's criticism in the following way:


title: John Maynard Keynes

text: Asked why Keynes expressed "moral and philosophical" agreement with Hayek's "Road to Serfdom", Hayek stated:


title: John Maynard Keynes

text: According to some observers, Hayek felt that the post-World War II "Keynesian orthodoxy" gave too much power to the state, and that such policies would lead toward socialism.


title: John Maynard Keynes

text: While Milton Friedman described "The General Theory" as "a great book", he argues that its implicit separation of nominal from real magnitudes is neither possible nor desirable. Macroeconomic policy, Friedman argues, can reliably influence only the nominal. He and other monetarists have consequently argued that Keynesian economics can result in stagflation, the combination of low growth and high inflation that developed economies suffered in the early 1970s. More to Friedman's taste was the "Tract on Monetary Reform" (1923), which he regarded as Keynes's best work because of its focus on maintaining domestic price stability.


title: John Maynard Keynes

text: Joseph Schumpeter was an economist of the same age as Keynes and one of his main rivals. He was among the first reviewers to argue that Keynes's "General Theory" was not a general theory, but a special case. He said the work expressed "the attitude of a decaying civilisation". After Keynes's death Schumpeter wrote a brief biographical piece "Keynes the Economist"on a personal level he was very positive about Keynes as a man, praising his pleasant nature, courtesy and kindness. He assessed some of Keynes's biographical and editorial work as among the best he'd ever seen. Yet Schumpeter remained critical about Keynes's economics, linking Keynes's childlessness to what Schumpeter saw as an essentially short-term view. He considered Keynes to have a kind of unconscious patriotism that caused him to fail to understand the problems of other nations. For Schumpeter "Practical Keynesianism is a seedling which cannot be transplanted into foreign soil: it dies there and becomes poisonous as it dies."


title: John Maynard Keynes

text: "Schumpeter admired and envied Keynes, but when Keynes died in 1946, Schumpeter's obituary gave Keynes this same off-key, perfunctory treatment he would later give Adam Smith in the "History of Economic Analysis", the "discredit of not adding a single innovation to the techniques of economic analysis".


title: John Maynard Keynes

text: President Harry S. Truman was sceptical of Keynesian theorizing: "Nobody can ever convince me that government can spend a dollar that it's not got," he told Leon Keyserling, a Keynesian economist who chaired Truman's Council of Economic Advisers.


title: John Maynard Keynes

text: Some critics have sought to show that Keynes had sympathies towards Nazism, and a number of writers have described him as antisemitic. Keynes's private letters contain portraits and descriptions, some of which can be characterised as antisemitic, while others as philosemitic.


title: John Maynard Keynes

text: Scholars have suggested that these reflect clichés current at the time that he accepted uncritically, rather than any racism. On several occasions Keynes used his influence to help his Jewish friends, most notably when he successfully lobbied for Ludwig Wittgenstein to be allowed residency in the United Kingdom, explicitly to rescue him from being deported to Nazi-occupied Austria. Keynes was a supporter of Zionism, serving on committees supporting the cause.


title: John Maynard Keynes

text: Allegations that he was racist or had totalitarian beliefs have been rejected by Robert Skidelsky and other biographers. Professor Gordon Fletcher wrote that "the suggestion of a link between Keynes and any support of totalitarianism cannot be sustained". Once the aggressive tendencies of the Nazis towards Jews and other minorities had become apparent, Keynes made clear his loathing of Nazism. As a lifelong pacifist he had initially favoured peaceful containment of Nazi Germany, yet he began to advocate a forceful resolution while many conservatives were still arguing for appeasement. After the war started, he roundly criticised the Left for losing their nerve to confront Adolf Hitler, saying:


title: John Maynard Keynes

text: Keynes has been characterised as being indifferent or even positive about mild inflation. He had indeed expressed a preference for inflation over deflation, saying that if one has to choose between the two evils, it is "better to disappoint the rentier" than to inflict pain on working class families. Keynes was also aware of the dangers of inflation. In "The Economic Consequences of the Peace", he wrote:


title: John Maynard Keynes

text: At the beginning of his career, Keynes was an economist close to Alfred Marshall, deeply convinced of the benefits of free trade. From the crisis of 1929 onwards, noting the commitment of the British authorities to defend the gold parity of the pound sterling and the rigidity of nominal wages, he gradually adhered to protectionist measures.


title: John Maynard Keynes

text: On 5 November 1929, when heard by the Macmillan Committee to bring the British economy out of the crisis, Keynes indicated that the introduction of tariffs on imports would help to rebalance the trade balance. The committee's report states in a section entitled "import control and export aid", that in an economy where there is not full employment, the introduction of tariffs can improve production and employment. Thus the reduction of the trade deficit favours the country's growth.


title: John Maynard Keynes

text: In January 1930, in the Economic Advisory Council, Keynes proposed the introduction of a system of protection to reduce imports. In the autumn of 1930, he proposed a uniform tariff of 10% on all imports and subsidies of the same rate for all exports. In the "Treatise on Money", published in the autumn of 1930, he took up the idea of tariffs or other trade restrictions with the aim of reducing the volume of imports and rebalancing the balance of trade.


title: John Maynard Keynes

text: On 7 March 1931, in the "New Statesman and Nation", he wrote an article entitled "Proposal for a Tariff Revenue". He pointed out that the reduction of wages led to a reduction in national demand which constrained markets. Instead, he proposes the idea of an expansionary policy combined with a tariff system to neutralise the effects on the balance of trade. The application of customs tariffs seemed to him "unavoidable, whoever the Chancellor of the Exchequer might be". Thus, for Keynes, an economic recovery policy is only fully effective if the trade deficit is eliminated. He proposed a 15% tax on manufactured and semi-manufactured goods and 5% on certain foodstuffs and raw materials, with others needed for exports exempted (wool, cotton).


title: John Maynard Keynes

text: In 1932, in an article entitled "The Pro- and Anti-Tariffs", published in "The Listener", he envisaged the protection of farmers and certain sectors such as the automobile and iron and steel industries, considering them indispensable to Britain.


title: John Maynard Keynes

text: In the post-crisis situation of 1929, Keynes judged the assumptions of the free trade model unrealistic. He criticised, for example, the neoclassical assumption of wage adjustment.


title: John Maynard Keynes

text: As early as 1930, in a note to the Economic Advisory Council, he doubted the intensity of the gain from specialisation in the case of manufactured goods. While participating in the MacMillan Committee, he admitted that he no longer "believed in a very high degree of national specialisation" and refused to "abandon any industry which is unable, for the moment, to survive". He also criticised the static dimension of the theory of comparative advantage, which, in his view, by fixing comparative advantages definitively, led in practice to a waste of national resources.


title: John Maynard Keynes

text: In the "Daily Mail" of 13 March 1931, he called the assumption of perfect sectoral labour mobility "nonsense" since it states that a person made unemployed contributes to a reduction in the wage rate until he finds a job. But for Keynes, this change of job may involve costs (job search, training) and is not always possible. Generally speaking, for Keynes, the assumptions of full employment and automatic return to equilibrium discredit the theory of comparative advantage.


title: John Maynard Keynes

text: In July 1933, he published an article in the "New Statesman and Nation" entitled "National Self-Sufficiency", in which he criticised the argument of the specialisation of economies, which is the basis of free trade. He thus proposed the search for a certain degree of self-sufficiency. Instead of the specialisation of economies advocated by the Ricardian theory of comparative advantage, he prefers the maintenance of a diversity of activities for nations. In it he refutes the principle of peacemaking trade. His vision of trade became that of a system where foreign capitalists compete for new markets. He defends the idea of producing on national soil when possible and reasonable and expresses sympathy for the advocates of protectionism.


title: John Maynard Keynes

text: Later, Keynes had a written correspondence with James Meade centred on the issue of import restrictions. Keynes and Meade discussed the best choice between quota and tariff. In March 1944 Keynes began a discussion with Marcus Fleming after the latter had written an article entitled "Quotas versus depreciation". On this occasion, we see that he has definitely taken a protectionist stance after the Great Depression. He considered that quotas could be more effective than currency depreciation in dealing with external imbalances. Thus, for Keynes, currency depreciation was no longer sufficient and protectionist measures became necessary to avoid trade deficits. To avoid the return of crises due to a self-regulating economic system, it seemed essential to him to regulate trade and stop free trade (deregulation of foreign trade).


title: John Maynard Keynes

text: He points out that countries that import more than they export weaken their economies. When the trade deficit increases, unemployment rises and GDP slows down. And surplus countries exert a "negative externality" on their trading partners. They get richer at the expense of others and destroy the output of their trading partners. John Maynard Keynes believed that the products of surplus countries should be taxed to avoid trade imbalances. Thus he no longer believes in the theory of comparative advantage (on which free trade is based) which states that the trade deficit does not matter, since trade is mutually beneficial.


title: John Maynard Keynes

text: This also explains his desire to replace the liberalisation of international trade (Free Trade) with a regulatory system aimed at eliminating trade imbalances in his proposals for the Bretton Woods Agreement.


title: John Maynard Keynes

text: Keynes was the principal author of a proposalthe so-called Keynes Planfor an International Clearing Union. The two governing principles of the plan were that the problem of settling outstanding balances should be solved by "creating" additional "international money", and that debtor and creditor should be treated almost alike as disturbers of equilibrium. In the event, though, the plans were rejected, in part because "American opinion was naturally reluctant to accept the principle of equality of treatment so novel in debtor-creditor relationships".


title: John Maynard Keynes

text: The new system is not founded on free-trade (liberalisation of foreign trade) but rather on the regulation of international trade, to eliminate trade imbalances: the nations with a surplus would have an incentive to reduce it, and in doing so they would automatically clear other nations deficits. He proposed a global bank that would issue its currencythe bancorwhich was exchangeable with national currencies at fixed rates of exchange and would become the unit of account between nations, which means it would be used to measure a country's trade deficit or trade surplus. Every country would have an overdraft facility in its bancor account at the International Clearing Union. He pointed out that surpluses lead to weak global aggregate demandcountries running surpluses exert a "negative externality" on trading partners, and posed, far more than those in deficit, a threat to global prosperity.


title: John Maynard Keynes

text: In his 1933 "Yale Review" article "National Self-Sufficiency," he already highlighted the problems created by free trade. His view, supported by many economists and commentators at the time, was that creditor nations may be just as responsible as debtor nations for disequilibrium in exchanges and that both should be under an obligation to bring trade back into a state of balance. Failure for them to do so could have serious consequences. In the words of Geoffrey Crowther, then editor of "The Economist", "If the economic relationships between nations are not, by one means or another, brought fairly close to balance, then there is no set of financial arrangements that can rescue the world from the impoverishing results of chaos."