Booknotes

ROBERT SKIDELSKY, AUTHOR, "JOHN MAYNARD KEYNES, FIGHTING FOR FREEDOM 1937-1946": Well, it was on advice. I was told by a very good English friend of mine who'd had a lot of experience in publishing in the United States that "freedom" goes down well but that "Britain" doesn't. So there was enough truth in the title "Fighting for Freedom" to make it not a dishonest thing to do, but he thought it would be -- and my publisher agreed with me -- thought it would be better to leave out "Britain" and put "freedom" as a more general thing with which American audiences could empathize.

SKIDELSKY: Well, I think they -- a lot -- they'll get the same thing, roughly speaking, but I suppose that there is a sense for the British reader that this is Britain's last battle as a great power, so to speak, and so it will create -- it might create a kind of glow for a British reader, whereas, for Americans, this is part of a great struggle against evil in which America, Britain, and, at that point, Russia were also involved.

SKIDELSKY: Well, that on the left, as I see it, is Lydia Keynes, Maynard Keynes's wife, and there is Keynes himself. This is 1940, thereabouts, 1940, 1941. He's quite slim, doesn't look terribly robust because that's after he's had his heart attack in 1937. And so it was taken just at the beginning of the Second World War and just at the beginning of his return to the British government.

SKIDELSKY: He lived six more years.

SKIDELSKY: He was only 62, just coming up to 63. That's my age, actually. I've got a few more days to go. But he had been unwell for a long time. He had actually had his coronary thrombosis in 1937, which was a very severe one, and the English doctors didn't know what to do about it. They just said, "Stay in bed, and you might get better in several years."

But he came into the care of a brilliant Hungarian doctor called Janos Plesch -- that's him -- and Keynes always said he was half genius, half quack, but he developed -- he gave Keynes a primitive form of antibiotic, which cleared up an important set of infections he had in his throat and in his heart muscles, and this was before penicillin. It was a very early form of antibiotic called Prontosil, and that restored Keynes to life. But he couldn't cure him finally because he couldn't get rid of all the Streptococci which were swarming around the heart muscle. But he made him well enough for him to come back to a full-time job in the British government in the Second World War and work incredibly hard for six years.

SKIDELSKY: Yes.

SKIDELSKY: Well, the short version is that he was the greatest economist in the 20th century. Even, I think, Milton Friedman might accept that. He was one of the greatest economists of all time, and he revolutionized economic theory, essentially, by showing that you didn't have to suffer mass unemployment, that you could do -- governments could do something about it. That's him at the end of his life at Savannah and...

SKIDELSKY: Savannah, Georgia. It's the launch of the International Monetary Fund, which he helped set up, and he makes a speech there, which is rather interesting. He says -- he was very keen on the ballet. He was married to a ballerina. And he says "I hope there's no malicious fairy at this launch to wreck my child that I have just created."

And Judge Vinson, who was the American secretary of the Treasury thought that that remark might be aimed at him, and he said, "I don't mind being called malicious, but I'm damned if I'm going to be called a fairy."

SKIDELSKY: Well, I think it's important, because I think, if you are writing a biography of someone, you need to know a lot about their private life plus their character as it develops and is formed, and Roy Harrod simply left out that bit. Sexuality is a very important component of any person's make-up, and the fact that Keynes was homosexual for the first 30 years of his life, his relationships were with men and not women, is important to understanding his milieu and -- as a young man and the effect it had on him.

And he wasn't promiscuous. He had one very big love affair with a painter called Duncan Grant. And then, once he became a more public person in the First World War, he did move to heterosexuality, and his marriage with Lydia Lopokova was not, in my view, a marriage of convenience, by any means. It wasn't a front. It was a very, very loving marriage and a very successful marriage. There were sexual relations. They did try and have children, and they amused each other the whole time.

They were very, very different. I think an important thing linking the two together is that Keynes adored artists. He admired the artistic ability very much. He thought that he was condemned to move in the world of affairs and not to be -- and not at the level of artistic inspiration. I disagree. I think he was an artist in economics. But he admired people who could paint, who could write, the Bloomsbury Group. Many of them were his friends -- Virginia Woolf, E.M. Forster -- and these are the people he admired. And he loved -- he came to love in his life two artists, Duncan Grant, who was painter, and Lydia Lopokova, who was one of the great ballerinas of the early 20th century.

SKIDELSKY: Not that many. His own circle of friends that he met at Cambridge and people in the Bloomsbury Group, that circle of painters and artists and friends, but not the world outside, and they kept it quiet because, at that time, it was illegal. There was -- under British law, homosexual relations were forbidden, and, if caught, you could be sent to prison, as, indeed, Oscar Wilde had been only, you know, when Keynes was a teenager. So they were careful. But he didn't go prowling around and -- you know, I think it was all kept within the group.

SKIDELSKY: Yes.

SKIDELSKY: Lytton Strachey.

SKIDELSKY: Well, Lytton Strachey was one of the great biographers of this century. His -- he wrote a book called "Eminent Victorians," which revolutionized the art of biography, were short, very sharp, ironic sketches of great Victorians, not those three-volume things. Well, I shouldn't say that. I've just written three volumes.

It shows Lytton Strachey perhaps hasn't been as influential as he thought, but he was a frank biographer, and he was particularly interested in the psychology of the people he wrote about -- Florence Nightingale, General Gordon -- some of these Victorians who had all been placed on a pedestal, and Lytton Strachey pricked them with little flashes of irony.

And so that became a particular style of biography. A debunking style, you might call it. He was a great friend of Maynard Keynes. They met as undergraduates at Cambridge, and they went on being friends all through life. But they did fight over one or two beautiful young men.

SKIDELSKY: Well, they called him usually Maynard, but they also -- his nickname was Pottso (ph) because they thought his conversation wasn't very suitable. No one quite knows what "Pottso (ph)" means, but it is the Italian for "drain," I think.

SKIDELSKY: Lytton. Lytton Strachey was always nicknaming his friends. But his actual given names were John Maynard.

SKIDELSKY: Well, it's in the Keynes' letters. They kept everything, these people. They kept all their letters. They were convinced that, one day, they would be published, and they wanted the world to know what they were like. But not then. They didn't want them to be published instantly. And so these particular letters of Keynes to Duncan Grant were kept by Duncan Grant, and I saw them in the British library in London when I started doing my research.

SKIDELSKY: Roy Harrod. Yes.

SKIDELSKY: No.

SKIDELSKY: I think it was understandable at the time. Keynes had been dead for six years -- five years when the biography came out. He was a great hero to the British. He had -- you know, he was a world statesman by this time. First of all, Harrod didn't want that bit of it to be known, and, especially, he didn't want the Americans to know because he thought that would damage the influence of Keynes in the United States.

Secondly, he didn't want his widow -- he didn't -- you know, Lady Keynes was still alive -- very much alive, and he didn't want all that coming out, and she would have been very upset probably. Whether she would have been upset or not, I don't know really. She was a very broad-minded character and probably knew all about it, but whether she would have wanted it coming out -- so discretion was the better part of valor.

I think where -- I don't blame Harrod for that. What I think he was -- where I think he was wrong was to imply that he had told the whole story. He should have really said, "Look, not everything can be told about this person after six years. You will have to wait for another 20 or 30 years."

SKIDELSKY: He never held an official position -- no, he held an official position at the Treasury, both in the First World War where he was a career -- he was -- he entered the career structure of the Treasury.

In the Second World War, he was semi-detached, adviser to the Chancellor of the Exchequer. He never held an official position. He was often asked to stand for Parliament. If he had been -- if he had got into Parliament, he would almost certainly have been Chancellor of the Exchequer -- that is Secretary of the Treasury -- without any doubt at some point in his life, but he preferred to remain free, a free spirit. He had his base at Cambridge. He wrote his books. He was consulted by governments. But he preferred -- he wanted to keep his independence.

SKIDELSKY: His biggest book was "The General Theory of Employment, Interest, and Money," Which was published in 1936, and that was the revolutionary book.

SKIDELSKY: Yes.

SKIDELSKY: Well, I think that, had he not been alive and published his books, America would have had a much more stormy economic progress after the Second World War. I'm not saying the Great Depression would have recurred. I think that was probably a one-off event. But the economy would have been much more volatile.

And the reason it's been fairly smooth and there haven't been that many real serious -- nothing like the Great Depression and not really any very, very serious recessions since the Second World War is largely because of John Maynard Keynes. Governments knew that they had to take some action to offset depressive forces when they developed, and they did that all through the post-war period. Now it sometimes went wrong, and the down side of Keynesianism was that you could get into inflation, really serious inflationary problems. I don't think that was entirely his fault, but it was partly his fault.

SKIDELSKY: To be a Keynesian means that you -- first of all, you believe that governments can make -- can improve the performance of an economy, the level of growth and employment in the economy, by certain measures, by monetary policy and by fiscal policy.

SKIDELSKY: Absolutely. Keynes never believed that full employment was zero. He believed that full employment was what you could achieve without running interest serious other problems. Like if you tried to get it below 4 employment, you'd probably get into an inflationary situation. So he thought full employment was about 4 percent, and that's what the post-war Keynesians -- the American post-war Keynesians believed, that roughly the United States was doing OK when employment was 4 percent. If it was above 5 percent, there was some unused capacity in the economy. People were unnecessarily unemployed, and, therefore, your economy was suffering, and you could do something about that, by cutting taxes, spending a bit more money, or reducing interest rates.

SKIDELSKY: Keynes never advocated that, himself. That was what Keynesians were finally driven to, in desperation I think. The Keynesians of the time. I think they -- because, whenever they tried to get unemployment down to about 4 percent or something, by this time, the 1960s, they found that inflation was starting to rise, and then they thought they could clamp down on inflation by having these wage and price controls.

What Keynes would have said about their efforts, I'm not sure. Something he might have said is that "You are aiming for too low a level of unemployment, and you should allow unemployment to rise a bit." I don't know, you know. This is one of those questions, "What would Keynes have said had he been alive today?" He would have been a different man. He would have grown up under different economic and political circumstances. Who knows what he would have said? But wage and price controls, though they were called Keynesian, were never actually advocated by Keynes.

SKIDELSKY: On a full-time basis, I divide my life between London and East Sussex.

SKIDELSKY: In England.

SKIDELSKY: It's on the coast. It's very near Brighton. It's sort of very close to the English Channel.

SKIDELSKY: I teach -- well, I no longer teach, actually. I used to be professor in the economics department at Warwick University. Warwick University is in England. In the last few years, I am -- I have still got a chair in that department but I don't have to teach any longer.

SKIDELSKY: Are you an economist, or are you a historian?

SKIDELSKY: I like to call myself an economically literate historian because I was trained, first of all, as a historian. I did study in economics, but it was not my -- I didn't -- never took a degree in economics. I never did post-graduate work in economics. I understand economic arguments up to a point. I think I do anyway. And, therefore, I sort of wear two hats. And to write about Keynes without trying to learn economics would have been a disaster.

SKIDELSKY: That's -- well, that's not a British award, actually. That's a Canadian award, and -- yes, it's that little -- that little gold bit on the cover. And that's for international relations. That's reckoned to be the best book, I am told, in international relations published in the relevant year, which was last year.

SKIDELSKY: I'm a reconstructed Keynesian. That's to say I don't think he was right about everything. There are certain things really that he -- there are certain ways in which he would have amended his theory in the light of further experience, no doubt at all about that. I think he was very overoptimistic about the capacity of governments to keep politics out of their economic policy. I think he was -- yes, I think that's probably the main thing where he was a bit naive on the political side of things.

And we've also learned there are certain things he didn't say which people like Milton Friedman said, which were very, very important. They weren't exactly anti-Keynesian. They came out as anti-Keynesian because Keynesianism was the reigning orthodoxy of the 1960s, and there were these high priests -- Paul Samuelson, James Tobin, the Council of Economic Advisers -- and anyone who sort of made any criticism of what they were doing almost had to say, you know, "This is anti-Keynes." Milton Friedman said that he regards Keynes as the greatest economist -- one of the great economists of all time, that he asked many of the right questions, he had some of the right answers, not all of them, and -- but, you know, the world moves on, and there are certain things he didn't get. That seems reasonable. You know, no one has said that-- no one has the last word in wisdom, however great the thinker is.

SKIDELSKY: Yes.

SKIDELSKY: Yes. Video, yes, I have. He appeared on television once or twice. It was very early days. Television -- when I say television, I mean newsreel because television was only just starting in the '30s. I've seen him on newsreel.

SKIDELSKY: That's...

SKIDELSKY: Yes. No, there was television -- the first television I am aware of in Britain -- the first showing was about 1931, 1932. Is that before the United States?

SKIDELSKY: Well, they didn't really get into it until after the war, actually, but there were one or two -- but Keynes appeared in 1931 when Britain went off the gold standard. This was considered an absolutely catastrophic event in the economic history of the time. Britain left the gold standard, and they had Keynes explaining why Britain had left the gold standard and why it was a good thing because this would give Britain freedom to do something about unemployment, reduce interest rates.

SKIDELSKY: And I've also heard him speaking. What does he sound like? He sounds like an upper-class Englishman, rather donnish, academic of that time. Maybe that's how I sound. I don't know.

SKIDELSKY: No, he -- I mean, he wasn't funny on the newsreel. You weren't expected to be funny, and it was a somber event, and, therefore, you were expected to be very serious and -- suitably serious. On his broadcasts, he is a bit funny. I mean, he makes -- he doesn't make jokes. You don't roll around the aisle splitting your sides, but he makes some ironic, subtle remarks.

SKIDELSKY: Yes. Had he liked me.

SKIDELSKY: Yes. That's right.

SKIDELSKY: Yes. They're at Atlantic City then, and that's just before Bretton -- the Bretton Woods conference, which sets up the International Monetary Fund. It -- that photograph is taken in July, 1944.

SKIDELSKY: No. Yes. Mr. Morganthau. Keynes always used to talk about his dreadful smirk.

SKIDELSKY: Yes. The fellow on the right, Henry Morganthau, Secretary of the Treasury, Keynes's great sparring partner during the Second World War, and I put Dr. Kuhn (ph) on the left. I just thought it was good to have him in because, as I say at the bottom, he never missed a photo opportunity.

SKIDELSKY: He was the finance minister of China.

SKIDELSKY: Well, lend-lease was the way America helped Britain stay the war. It was not a loan. It was a grant to Britain. They basically supplied Britain, free of charge, with many of the war materials and, also, civilian materials they needed to go on fighting, because Britain was running out of gold to pay for what it had to import from the United States in order to stay in the war.

SKIDELSKY: This is World War II, and, in 1941, Roosevelt -- you see, the Americans were forbidden by the Neutrality Act from lending money to Britain, lending money to any belligerent, any country that was fighting, and even more so, lending to any country that had defaulted on its debt -- First World War debt, as Britain had done finally in 1931.

So there was no way the Americans could send supplies to Britain unless Britain paid for them. Britain ran out of money early in 1941, and Roosevelt conjured up this idea that they'd sort of lend Britain supplies with the idea that they would come back to Britain -- come back to America after the war. That was fictional. Obviously, you don't -- you're using up your munitions. There's nothing it return.

But he got it through Congress that way, and so that was -- and Churchill thought that was an act of great, extraordinary generosity, as, indeed, it was, but, on the other hand, I say in my book America needed Britain to keep fighting then. So it was an act of self-defense by...

SKIDELSKY: Because of the fact that the British controlled the Atlantic, and if Britain went under and the Germans got control of the Atlantic, then they were -- they were that much nearer the United States with their submarines, and they could start sinking things, and then the balance of power in Latin America -- there are one or two pro-Nazi -- fascist leaders like Peron in Argentina. So it was sold by Roosevelt as an act of self-defense.

When he -- when he did his Lend-Lease Act, he said, "By keeping Britain in the war, our boys won't have to fight." That's what he actually said. Of course, that turned out not to be true. But then the Americans attached certain conditions to lend-lease. It wasn't a loan, so there weren't repayment conditions, but conditions about what Britain should do about its economic system and its trade relations after the war that the British found unfair and rather onerous, and they tried to wriggle out of them. But that was the plot of Anglo-American relations during the Second World War set by lend-lease and the way lend-lease was conceived and implemented.

SKIDELSKY: Well, John Maynard Keynes came to America first into Washington in 1941 for the first time as head of a British mission to clear up some of the details of the lend-lease appropriations, what Britain should be getting. And there he was in Washington in 1941, and that's when he started getting to know Morganthau, the secretary of the Treasury, and that's when he also started his long relationship with Harry Dexter White, who was Morganthau's assistant secretary.

And Morganthau really trusted Harry Dexter White and said, "I want it all in one brain, and that's Harry White's brain." And -- and so then -- he came to Washington in 1941. There's a rather funny story when he first came to the Treasury -- the U.S. Treasury. One of the officials said, "Where is your lawyer?" and Keynes said, "We haven't brought a lawyer." and the guy said, "well, who is going to do your thinking for you then?" and Keynes always said that America was a country run by lawyers. He always thought that afterwards.

SKIDELSKY: Not great. I think that there's still a bit of a debate about it, but I think it's a languishing debate. He was a very, very able man, Harry Dexter White, very constructive mind, big-thinking. He was pro-communist, and he was -- though not a member of the Communist Party ever, and he was, I think, almost certainly a Soviet agent. He was one of a group of people in the Treasury who passed on information to the Soviet Union, and that was alleged in 1940 -- in the war itself by Elizabeth Bentley and Whitaker Chambers among others.

They both independently told the FBI that Harry White was passing information to the Russians. There was no smoking gun, except their testimony. But the Americans have since decrypted a lot of the messages passing from the Soviet Union to the United States through their embassy, and through the trade mission in New York, which show, I think, that Harry White was one of the Soviet agents. He was regarded as one of our greatest assets, as they said. And there is now so much testimony coming in from so many different sources that I don't think it's in doubt any longer, though there are one or two people who still argue for the fact, "Yes, he was seeing the Soviets, but that was by way of his official duties, and the Soviet Union was an ally, and he didn't really go beyond what was allowable for a U.S. official." But I don't think that washes, actually.

SKIDELSKY: I went to school in England. I went to school at Brighton College.

SKIDELSKY: Yes.

SKIDELSKY: Eton is probably the most famous school in the world. I don't think that's just British chauvinism. I think it's probably the best known. It's the leading private school. In England, we call them public schools, but it's the leading private school in England, the most famous, founded in the 15th century, very beautiful, very -- lots of old buildings, very near Windsor, which is where -- which is one of the homes of the British monarch, and it was a sort of -- the monarchy always had a close connection with Eton, and there he went as a scholar. They had -- they had -- one section of the school was called "college," and it was scholarship boys. By 1900, these scholarship boys were not poor boys. That had been intended for poor scholars, but most of them were pretty well off. They were extremely brainy.

SKIDELSKY: You start at 13.

SKIDELSKY: Four or five years. Now maybe -- more four than five -- no, five years is probably average.

SKIDELSKY: Still only boys, yes.

SKIDELSKY: There are about a thousand in the school now.

SKIDELSKY: They have their own houses, which are run by house masters, but the brainy ones have one house all on their own, which is called "college," and they still wear funny clothes -- tails and -- you know...

SKIDELSKY: Yes. White ties. They look a bit like waiters. And, on formal occasions, they wear top hats.

SKIDELSKY: Five years he was there.

SKIDELSKY: He came from a family of university teachers really. It was a Victorian success story. They pulled themselves up by their bootstraps. They were non-conformists.

His grandfather started quite -- as a poor -- not very rich person, but he made money as a businessman in flowers. He was --he cultivated -- he was a market gardener, and he made quite a lot of money.

And his son, who was very bright, Maynard Keynes's father, passed a whole lot of scholarship exams and got into Cambridge, and then he became a teacher, or a don, as it's called, at Cambridge University in one of the colleges.

SKIDELSKY: His father did. And then he married also a very, very clever lady, who had also -- one of the very first -- one of the first women to enter the university, though not officially. It was all done unofficially at that time because they weren't allowed to graduate.

SKIDELSKY: It's about 60 miles from London.

SKIDELSKY: Yale, Harvard, Princeton.

SKIDELSKY: It was an elite -- it was an elite school, yes.

SKIDELSKY: He went to King's College, which was an -- which had been founded as an Eton successor by the same king, King Henry VI, who'd founded Eton, had also founded King's College, Cambridge, and so Etonians tended to go on to King's, though, by the time Keynes was -- went to King's, they had to be good enough to do that, and they had to pass an entrance exam, and he got a scholarship. He got scholarships the whole time. His parents didn't need them. They were quite well off by this time.

SKIDELSKY: Two siblings. A sister and a younger brother.

SKIDELSKY: Well, the widow problem is the one that Roy Harrod faced, we were talking about earlier. You know, the widow doesn't want everything told, and the friends -- intimate friends don't want everything revealed either. That's very natural. I mean, if you or I -- if someone came around sort of saying, well -- ferreting in our lives after we were dead, we'd hope that someone would protect us, would protect our memory a little bit, and, of course, that's very natural.

After 50 years, it doesn't matter really, and then people do want to know more, and to know someone warts and all actually makes them much more interesting because we know enough now about human nature to know that even our heroes were not all perfect. They weren't all white. They had dark sides. And I think there is a demand for much more accurate, sensitive, and psychologically understanding biography, and it used to be, a hundred years ago, when everyone was put on a pedestal by their biographers, and nothing was allowed to sully their original virtue.

SKIDELSKY: The first came out in 1983.

SKIDELSKY: No. I had a contract for one book to be delivered within two years.

SKIDELSKY: It took 18 years.

SKIDELSKY: Well, partly my fault, -- partly the circumstances. I found very, very -- right at the beginning, soon after the contract was signed, the papers I needed to look at -- I had been told they had been available, would be available, but they were closed. They were closed for various reasons -- some of them good, some of them not so good.

But they were closed for five or six years after the contract was signed, and even though my -- the head of my publishing firm, McMillan, was the former prime minister, Harold McMillan, and he wrote letters on my behalf to the people at King's College, Cambridge, where these papers were, and -- to Cambridge saying, "Look, you must let Robert Skidelsky in because, you know, he's going to do a wonderful life," he couldn't make any impression at all.

So, for five or six years, I couldn't do anything. So, finally, they were released in about 1978, '79, and then I really started work. Then my own particular dynamics came into play. I started writing the book, and I realized by about 1980, 1981, that I was having a pretty -- a pretty good volume assembled, but it only covered the first 30 years of his life. That's right. So I then said to my publishers, "Hey, let's do three volumes," and they sort of hemmed and hawed but agreed.

SKIDELSKY: In 1990.

SKIDELSKY: Yes. The current volume was published -- in our country, 1990 -- sorry -- in 2000 and in the United States in 2001.

SKIDELSKY: Quite well. Technically, it was a bestseller. What that means for hardback books is not by Jeffrey Archer or one of these -- I mean, it means that, you know, 10,000, 15,000 copies in hardback is -- for a book of this kind is reckoned to be a bestseller.

SKIDELSKY: Well, all three have been published in the United States.

SKIDELSKY: About the same. About the same. This one, we hope, may do a bit better because it's got a more American subject, and it's had more publicity than the others, including this program.

SKIDELSKY: He left Cambridge in 1905.

SKIDELSKY: Well, Bloomsbury was a -- it's a well-known commune, you might say, of writers and artists who started -- they were called Bloomsbury because they lived as young people in a particular area of London known as Bloomsbury, which wasn't fashionable. It's pretty fashionable now.

SKIDELSKY: Well, it's just -- I mean, I don't know whether you know -- well, one of the things -- Piccadilly Circus is sort of the center. It's just a little east of it, and it's that way, but it -- you know, it's not the West End. The West End was the fashionable bit, and Bloomsbury was a bit east. It's like the Dakota, I suppose, in New York, which was so far away from fashion that it was called the Dakota.

SKIDELSKY: Yes. But it's sort of -- now it's very, very fashionable. So they lived in that -- they lived in that part of London, these young people, two sisters, Virginia and Vanessa Stephen. Virginia then married Leonard Woolf and became Virginia Woolf. She's the best known, I suppose, of the pure Bloomsbury Group people. Lytton Strachey, Duncan Grant, Vanessa Bell, her sister -- she married Clive Bell -- and about seven or eight of them, and maybe odds and ends added themselves on, and they had held evenings together -- they discussed literature, life. They painted. They wrote.

SKIDELSKY: They were rather Bohemian. They lived in a commune. They all had rooms in their house in the same sort of set of houses.

SKIDELSKY: Well, it really went on in that form until the First World War. They were also very avant-garde. They were the people who really championed the cause of post-impressionist painting in England.

SKIDELSKY: That's right. That's right. It was in that period, yes.

SKIDELSKY: Well, two or three years, I think, the affair went on. About three years. But they remained lifelong friends. And then Duncan Grant -- you see, there was a bit of a merry-go-round. Duncan Grant then sort of became married, though they never did get married, to Vanessa, who was Virginia Woolf's sister, and they lived together for the rest of their lives.

SKIDELSKY: Oh, it was -- in the literary world, it was extremely well known.

SKIDELSKY: Great. Yes. On the way -- on the way -- I mean, Virginia Woolf as a novelist had an enormous impact, and, in fact, she is studied today in all literature courses. She's a central figure. And very much, you know, a kind of style of writing which broke away from the straight narrative and tried to capture moments of time, very -- in a way, rather like post-impressionism as well, breaking away from narrative in pictures, breaking it up into moments, either bits of light or moments of construction.

SKIDELSKY: Well, there are one or two blue plaques on the walls of the houses which commemorate the people who lived here. Maynard Keynes has got one, Number 46 Gordon Square, which is where he made his London home and where his widow went on living as well as -- they also had a country house.

SKIDELSKY: Yes. In Gordon Square, I think. They're sitting there together. It's obviously winter. There's snow behind.

SKIDELSKY: He married Lydia in 1925. He had been having an affair with Lydia for four or five years before they got married. She was already married to someone who had been in -- Yes, that's Lydia. There is actually a rather beautiful picture of them together in volume two. I don't know whether we can come to it, maybe. And she was -- you know, she had been a member of the Diaghilev Ballet Company, which was a famous Russian ballet company, which had left Russia before the revolution, and Lydia spent quite a lot of her life in the United States before the First World War.

Yes, there's an even better one. They're sitting in the field -- in the fields just outside their house in the country. But that's when they got married. And Lydia was a brilliant dancer. Absolutely brilliant dancer. She was -- Yes, that's still another one. There's a whole -- there's a whole length -- there's a big half-page -- a proper half-page one of them somewhere. There she was in a -- yes, there she was Lydia Lopokova in one of your famous ballet roles. She was very lively, a very vivacious dancer. She was incredibly pert, and she spoke a very peculiar kind of English, which everyone loved.

SKIDELSKY: Nineteen twenty-five.

SKIDELSKY: They didn't like it too much.

SKIDELSKY: Well, they thought that -- that's it. That's -- we give up. That's the -- I think you've got -- that's the one of them together in the early 1920s. They thought that he wasn't the marrying type. They thought that she wasn't the right wife for him because, as Virginia Woolf said, she didn't have a headpiece. She was a babbler. She couldn't -- they said she couldn't argue consecutively.

These were rather intellectual people. I mean, we call them bluestockings in England. I don't know whether you've got the same word in the United States. Rather intellectual women. This was in the early days. Nowadays, you know, all women are meant to be intellectual. But, I mean, at that time, intellectual women were exceptional, and women were expected to be decorous, and so these Bloomsbury women -- it was part of their unconventionality.

They did things -- they didn't dress as they were expected to. Lydia was more conventional, but she was more Bohemian as well. It was a different combination. They didn't quite approve of her.

SKIDELSKY: Her language.

SKIDELSKY: Oh, yes. Her language was absolutely wonderful.

SKIDELSKY: Why? Because she -- she used words deliberately incorrectly.

SKIDELSKY: Yes. Yes.

SKIDELSKY: In order to create an effect. She spoke -- you know, she'd been in America for six years, and she'd even been a straight actress, but she liked to -- for example -- here's an example of Lydia. She comes to Canada in 1944 with her husband. They're on a financial -- he's on a financial mission, and Malcolm McDonald is the high commissioner -- British high commissioner, and so she rushes out to the airplane before Keynes and hugs him -- they'd never met -- and says, "How wonderful to see you, my dear -- my dear Mr. Commissar."

She says, "commissar," which is, of course, the -- a Soviet official. Well she knows commissioner perfectly well, but she sort of deliberately used it. Another occasion -- I don't know whether I should tell this story, but it was -- it was Dean Acheson or Cordell Hull was giving an official dinner at the State Department.

SKIDELSKY: He was Secretary of State. And there was a sudden lull in the conversation, and Lydia was heard saying to her next door neighbor -- she said, "Well, I understand how two men do it, but two holes making love?" It's quite -- it's quite impossible, two women, in other words. So she was always very provocative in that sort of way.

Another famous Lydia malaprop was she was shown a collection of birds by a hostess who was very keen on her aviaries, and so she showed Lydia around all her collection of birds, and Lydia says, "Dear Lady So-and-So, what wonderful ovaries you have." She was always doing that. That's Russian -- it's a kind of Russian mischief -- not mischief-making, but just sort of humor, if you like.

The thing is that it was her way of getting on in English society because, you know, she was moving with her husband into -- in very high circles by the time he was a top person, and she had to somehow find a style for, you know, making her own way.

SKIDELSKY: He bought his peerage in 1932.

SKIDELSKY: Well, officially the king, but on the recommendation of Winston Churchill.

SKIDELSKY: Very good. They got on extremely well. They were members of a dining club, a very exclusive dining club, called The Other Club, and like -- you know, it was -- to which were elected people who were thought to be intelligent, amusing, and they dined once a month, and during the war, Churchill, who was one of the founding members, used to go as often as he could, and Keynes had been elected a member in the 1920s, and they often sat together and talked.

SKIDELSKY: In the First World War, he was a conscientious objector. Those were his sentiments. He didn't actually -- he wasn't actually declared a conscientious objector because he was anyway exempted from having to fight by being at the Treasury. But he wrote out a letter of conscientious objection to show solidarity for his friends. He wasn't a pacifist, Keynes, and that would be wrong. Some of the Bloomsbury people were pacifists. Keynes was not a pacifist. He didn't object to having to fight.

SKIDELSKY: No. He wasn't a socialist. He was a liberal. I think this is one of the common mistakes made about Keynes. I think people think he was a man -- he was a socialist. He was -- he wrote many times on many occasions, "My theories are designed to save the world from socialism, not to embrace socialism."

SKIDELSKY: He -- Freidrich von Hayek thought he was the cleverest man he'd ever met.

SKIDELSKY: No, no. He said -- he didn't like his policies. Bertram Russell also said -- one of the greatest philosophers of the 20th century -- "When I argued with Keynes, with Keynes, I felt I was taking my life into hands."

SKIDELSKY: Yes. Well, he died of what's called a heart attack, a coronary thrombosis, just suddenly one morning was -- he had walked up -- walked down the hill from his house. It was to his house, and he was well. He felt well. He felt better than he had for many years, he said, and the next morning, he woke up. There was a little coughing. His wife ran in. His mother was staying with him. They both came in, and after a few seconds, he just fell back dead.

SKIDELSKY: Just about to be 63.

SKIDELSKY: Yes.

SKIDELSKY: The toughest part was undoubtedly economics.

SKIDELSKY: Well, I think there are two things. There's the private stuff. Then there's the technical economics. And in between, there's his journalism where he is writing himself non-technically.

SKIDELSKY: The admiration of the new republic in this country. He wrote a lot for the -- a journal called "The Nation" in England. He also wrote a lot for "The Times."

SKIDELSKY: London, yes. And those were non-technical expositions of his economics.

SKIDELSKY: Well, how many books? He wrote four big books and lots of pamphlets. He wrote a -- in 1995 one of his best. One of his best things was a short view of Soviet Russia. He went to Soviet Russia just after he married Lydia and wrote saying that this was the most awful society and no one could possibly be a communist who hadn't suffered some horrible conversion that had overturned all the decent values that people have.

SKIDELSKY: No. It's not passed us. You know, when -- after the 11th of September, your president, George W. Bush, sent a stimulus bill to Congress. Stimulus bill. Straight Keynes. The economy -- they felt the economy was possibly already in recession, but the 11th of September might have worsened the recession. So they sent a spending tax-cutting measure to Congress. That was their reaction.

Now that shows also some of the problems of doing that kind of thing because by the time a much watered-down version of the stimulus bill was actually passed a couple of days ago, a week ago, the economy had already -- was already on the mend. So, you know, it may be too stimulating as it turns out. So I think this is -- these are some of the problems, but the reaction was a pure Keynesian reaction.

SKIDELSKY: Yes.

SKIDELSKY: Shocked because -- well, because, you know, Britain's the loyal ally. Britain -- there's a special relationship. You know, you can really rely on the Brits.

America was very anti-British in the 1930s, and that lasted through much of the war, though because Britain was still a great power, and it may have been the going power and America was the coming power, but the going power had quite a lot going for it still, and until that issue was resolved and Britain declined sufficiently really for it not to be a rival of the United States and after the Cold War started and Russia was identified -- the Soviet Union -- as the main enemy.

Then, of course, the special relationship started to flourish, especially on the military and intelligence side, but it was always more important to the British than to the Americans.

SKIDELSKY: Right. Oh, Keyneses. I thought you were going to see people like Keynes. Yes, there are lots of Keyneses. They didn't have any children, but his brother had four children.

SKIDELSKY: Yes, yes. I know most of them quite well.

SKIDELSKY: Well, they were willing to tell stories -- tell stories about their uncle, who they'd known as young people. Also, one got a flavor of the family, its dynamics, its psychology.

SKIDELSKY: Yes, there's -- I'm sure there's a -- there are busts of him in Cambridge, but there's no full-length statue. There are no statues of the economists. Statues of economists is very rare. Maybe there'll be more of them in the 21st century.

SKIDELSKY: Yes, yes.

SKIDELSKY: At his old college, there's a -- there are good paintings of him. There's a famous painting which I reproduced. A bit of it is on the front cover of my second volume by William Roberts, which actually -- that's it. And I'm --

That's a painting. It's only a section. His wife is on his left. That's a well-known painting. There are one or two busts. There are -- there's a famous painting of him as a young man by Duncan Grant, which is on the cover of the first volume, which is -- this is when they were having their affair, and they were staying in an -- on an island off the coast of Scotland, and Keynes was writing his book.

That's the way he used to write. He used to have a writing board, and he would write. He was writing a "Treatise on Probability," and Duncan Grant was painting.