Keynes the Man.pdf - The Ludwig von Mises Institute

34 Keynes, the ManDespite his rise to high levels of the Civil Service, Keynes soongrew tired of his quasi sinecure and tried to return to Cambridgeby way of a teaching post. Finally, in the spring of 1908, Marshallwrote to Keynes, offering him a lectureship in economics.Although Marshall was on the point of retirement, he easily persuadedhis friend, favorite student, and handpicked successor,Arthur C. Pigou, to follow Marshall’s practice of paying for the lectureshipout of his own salary; Neville Keynes promptly offered tomatch the stipend.In 1908, Keynes happily took up the insular role of lecturingin Marshallian economics at his old school, King’s College, Cambridge.But most of his time and energy were spent as a busy manof affairs in London (Corry 1978, p. 5). One of his functions was tobe an informal but valued adviser to the India Office; indeed, hisassociation with the office actually expanded after 1908 (Keynes1971, p. 17). As a result, he played an important role in Indianmonetary affairs, writing his first major journal article on India forthe Economic Journal in 1909; writing influential memoranda outof which grew his first book, the brief monograph on Indian Currencyand Finance in 1913; and playing an influential role on theRoyal Commission on Indian Finance and Currency, to which distinguishedpost he was appointed before the age of 30.Keynes’s role in Indian finance was not only important butalso ultimately pernicious, presaging his later role in internationalfinance. Upon converting India from a silver to a gold standard in1892, the British government had stumbled into a gold-exchangestandard, instead of the full gold-coin standard that had markedBritain and the other major Western nations. Gold was not mintedas coin or otherwise available in India, and Indian gold reservesfor rupees were kept as sterling balances in London rather than ingold per se.To most government officials, this arrangement was only ahalfway measure toward an eventual full gold standard; but Keyneshailed the new gold-exchange standard as progressive, scientific,