Keynes the Man.pdf - The Ludwig von Mises Institute

32 Keynes, the Manspeculations” (Harrod 1957). In a letter to Clive Bell, author ofthe book under review and an old Bloomsburyite and friend ofKeynes, Harrod pressed the point further: “The point is importantbecause of the beastly stories, which are very widespread … abouthis having made money dishonourably by taking advantage of hisTreasury position” (ibid.; cf. Skidelsky 1983, pp. 286–88).Despite Harrod’s insistence to the contrary, however, Keyneshad indeed set up his own “special fund” and had begun to makeinvestments by July 1905. By 1914, Keynes was speculating heavilyin the stock market and, by 1920, had accumulated £16,000,which would amount to about $200,000 at today’s prices. Half ofhis investment was made with borrowed money.It is not clear at this point whether his fund was used for investmentor for more speculative purposes, but we do know that hiscapital had increased by more than threefold. Whether Keynesused inside Treasury information to make such investment decisionsis still unproven, although suspicions certainly remain(Skidelsky 1983, pp. 286–88).Even if we cannot prove the charge of swindling againstKeynes, we must consider his behavior in the light of his own bittercondemnation of financial markets as “gambling casinos” inThe General Theory. It seems probable, therefore, that Keynesbelieved his successes at financial speculation to have swindled thepublic, although there is no reason to think he would have regrettedthat fact. He did realize, however, that his father would disapproveof his activity. 88In a letter to his mother on September 3, 1919. Keynes wrote of his speculation inforeign exchange, “which will shock father but out of which I hope to do very well”(Harrod 1951, pp. 288). For a penetrating critique of Keynes’s views on speculation asgambling, see Hazlitt ([1959] 1973, pp. 179–85).