Keynes Famous Quotes

The difficulty lies, not in the new ideas,” John Maynard Keynes famously observed, “but in escaping from the old ones.

There’s a famous and often-told story about the great economist John Maynard Keynes: once, when accused of having flip-flopped on some policy issue, Keynes acerbically replied, “When the facts change, sir, I change my mind. What do you do?

When the facts change, I change my mind,” the economist John Maynard Keynes famously said. “What do you do, sir?

Economists have always been haunted by the spectre of ‘diminishing returns’. Ricardo had famously seen ‘diminishing returns’ in agriculture leading to a progressive fall in the rate of profit, a progressive shift of the terms of trade between manufacturing and agriculture in favour of the latter and the eventual denouement of a stationary state where further growth became impossible. Even Keynes in the aforementioned work saw ‘diminishing returns’ in food production as undermining the Eldorado even if the war had not done so. And yet none of these fears have come true. The terms of trade between manufacturing and agriculture have shown a secular tendency to shift against, rather than in favour of, the latter; and while the growth rate under capitalism has come down of late, this has nothing to do with any fall in the profit rate caused by ‘diminishing returns’. Likewise, the advanced capitalist world has no difficulty to this day in meeting its food requirements, belying the fears of Keynes. How then do we explain this contrast between fears and reality?

But in 1936 a huge archive of Newton’s private manuscripts was put up for auction at Sotheby’s, in London. The papers had been kept from the public for over two centuries. One hundred lots of the manuscripts were bought by the famous British economist, John Maynard Keynes, who found that many of Newton’s papers were written in a secret cypher. And for six years, Keynes struggled to decipher them. He hoped they would reveal the private thoughts of the founder of modern science. But what the code really revealed was another, far darker, side to Newton’s work. For, in the manuscripts, Keynes found a Newton unknown to the rest of the world—a Newton obsessed with religion, and a purveyor of practices of heresy and the occult.

As Maynard Keynes famously observed: “If I owe you a pound, I have a problem, but if I owe you a million, the problem is yours.

In 1930, in a speech titled “Economic Possibilities for Our Grandchildren,” the economist John Maynard Keynes made a famous prediction: Within a century, thanks to the growth of wealth and the advance of technology, no one would have to work more than about fifteen hours a week. The challenge would be how to fill all our newfound leisure time without going crazy. “For the first time since his creation,” Keynes told his audience, “man will be faced with his real, his permanent problem—how to use his freedom from pressing economic cares.” But Keynes was wrong. It turns out that when people make enough money to meet their needs, they just find new things to need and new lifestyles to aspire to; they never quite manage to keep up with the Joneses, because whenever they’re in danger of getting close, they nominate new and better Joneses with whom to try to keep up. As a result, they work harder and harder, and soon busyness becomes an emblem of prestige. Which is clearly completely absurd: for almost the whole of history, the entire point of being rich was not having to work so much. Moreover,

The cancellation of inter-Ally war debts was designed to de-couple American finance from Europe. Keynes supported American loans to get European industry restarted, pay for essential food imports, and stabilize currencies. But he was adamantly opposed to Europeans borrowing from the United States to service deadweight debt. His book became an international best-seller, had a profound effect on post-war thinking, and made Keynes world-famous.

His favoured objects of contemplation were economic facts, usually in statistical form. He used to say that his best ideas came to him from ‘messing about with figures and seeing what they must mean’. Yet he was famously sceptical about econometrics – the use of statistical methods for forecasting purposes. He championed the cause of better statistics, not to provide material for the regression coefficient, but for the intuition of the economist to play on.

Keynes’s third act of statesmanship was to negotiate the American loan in September-December 1945. He estimated that Britain’s deficit on current account would total nearly $7bn over the first three post-war years. Keynes went to Washington in September 1945 to seek a grant of $5bn ‘without strings’. He returned, three months and several famous rows later, with a loan of $3.75bn conditional on a commitment to make sterling convertible into other currencies a year after the loan agreement was ratified. It was probably the most humiliating experience of his life.

As time goes on, I get more and more convinced that the right method in investment is to put fairly large sums into enterprises which one thinks one knows something about and in the management of which one thoroughly believes.” Forget what the economy is doing; just find well-managed companies, buy some shares, and don’t try to be too clever. And if that approach sounds familiar, it’s most famously associated with Warren Buffett, the world’s richest investor—and a man who loves to quote John Maynard Keynes.

John Maynard Keynes’s famous view about long-term forecasts: ‘About these matters there is no scientific basis on which to form any calculable probability whatever. We simply do not know.

The Greek poet Archilochus once observed that the fox knows many things, but the hedgehog knows one important thing—a phrase later made famous by the philosopher Isaiah Berlin. Bogle was the quintessential hedgehog. He always believed in one big thing with a fiery passion. He had the integrity and intellectual suppleness to shift positions, though. When he was later confronted with his change of heart on the merits of active investing, he quoted the economist John Maynard Keynes: “When the facts change, I change my mind. What do you do, sir?