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THE MAN WHO MADE US ALL KEYNESIANS

Date: May 11, 1986, Sunday, Late City Final Edition Section 7; Page 1, Column 2; Book Review Desk
Byline: By Robert L. Heilbroner; Robert L. Heilbroner is the Norman Thomas Professor of Economics at the New School for Social Research. His latest book is ''The Nature and Logic of Capitalism.''
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JOHN MAYNARD KEYNES Volume One: Hopes Betrayed 1883-1920. By Robert Skidelsky. Illustrated. 447 pp. New York: Elisabeth Sifton/Viking. $24.95.

BIOGRAPHERS, Robert Skidelsky tells us, find themselves in a curiously defensive position: are they trying to tell a story or to explain something? It is a question that is bound to confront anyone who undertakes a life of John Maynard Keynes. Keynes was arguably the most influential economist since Adam Smith. He was also a public person with an extraordinary range of interests and influence - the chief economic representative of Great Britain during its negotiations with the United States at the end of World War II, a major architect of the postwar international monetary system, a director of the Bank of England, an entrepreneur in the theater and ballet, and a trustee of the National Gallery. As Mr. Skidelsky says, ''He was not just a man of establishments; but part of the elite of each establishment of which he was a member.''
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But there was also another Keynes, with whose life we have only recently become fully acquainted. We have always known that Keynes was a central figure in the Bloomsbury circle of sophisticates and innocents that lorded over British culture for a time before and after World War I. We did not know until the publication of Michael Holroyd's biography of Lytton Strachey in 1965 that Keynes had also been deeply involved in Bloomsbury's sexual - and homosexual - merry-go-round, the ardent lover of Strachey and Duncan Grant. These indelicacies had been discreetly omitted from the protective biography of Keynes written by the British economist Sir Roy Harrod. Mr. Skidelsky, who is a professor of international relations at the University of Warwick, understands very well the motives for this omission - the presence of Keynes's family, the fear (this was in 1951) that the sexual proclivities of their author would undermine the validity of Keynes's ideas. But he takes the view that no serious biography of Keynes can overlook so central an aspect of its subject's life, and that Keynesian economics is today sufficiently well accepted on its own merits to withstand such a revelation. REVELATION of what?

Here enters the difficult problem of explanation.

What connections can be legitimately drawn between Keynes's private and public life? What linkages tie the attitudinizing of the Bloomsbury circle to Keynes's own moral stance? What are we to make of the last phrase of a letter (also tactfully omitted by Harrod) written to Strachey at age 22: ''I find Economics increasingly satisfactory, and I think I am rather good at it. I want to manage a railway or organise a Trust, or at least swindle the investing public.'' It is a measure of Mr. Skidelsky's brilliant achievement that it enables one to raise such questions without being polemical, vulgar, or simply prying.

In this first volume we watch the maturation of the formidable personage that Keynes became. From the outset it was clear that he was to be a phenomenon. Maynard (only his mother called him John) was born into a doting household of solid upper-middle-class academics who quickly recognized his precocity and trained him like a race horse for academic success. Typically, when it was decided in 1896 that he should try for a scholarship to Eton, special tutors were engaged, and his father, John Neville Keynes - an economist of considerable repute although not of great achievement - worked together with his son, starting before breakfast, to prepare for the ordeal. When the fated day arrived, Neville was in a state of nervous collapse. He was about to leave his hotel to meet Maynard at the exam when his son walked in. He had finished early. After the exams were over, the parents despaired over Maynard's chances and consoled themselves that the boy had done the best he could. Of course he had won a scholarship. Keynes won nearly every competition he ever entered, a performance not likely to encourage humility in a developing personality.

Eton revealed and cultivated Keynes's natural intellectual talents. It trained his logical faculties - he rapidly developed a marked talent for mathematics - awakened a love of medieval poetry and literature, exposed him to conventional patriotic history, and imbued him with social attitudes that would later be softened but never altogether discarded. The aristocracy he regarded as absurd, in contrast to his father, who was thrilled to discover that he was sharing a railway train with Austrian royalty; the proletariat as ''boorish.'' Perhaps more important, Eton confirmed in him the habit of success. He amassed 63 prizes, was elected to its most exclusive social club, enjoyed, and perhaps learned to expect, the admiration of his peers. When he went on to Cambridge University - he won a scholarship to King's College, his father biting his nails as usual - he was already marked as a person of great promise.

King's College was the decisive staging ground for Keynes's future development. Mr. Skidelsky makes vivid the excitement of the early 1900's, when brilliancy and eccentricity were the order of the day, rescued from mere self-indulgence by the intensity of the intellectual and moral climate. Here we begin to distinguish the public and private themes that become the double helix of Keynes's personality - the public Keynes, building on the traditions of his family and of Eton, and on the influence of Alfred Marshall, the great Victorian economist who took Keynes under his wing; and the private Keynes, emerging in the passionate homosexual involvements that would rule his emotional life until his marriage to the famous Russian ballerina Lydia Lopokova in 1925. Reviewing Mr. Skidelsky's book in The Times of London in 1983, Sir William Rees-Mogg asserted that Keynes's rejection of the norms that governed private life led to his eventual rejection of the norms that governed public life, in particular the gold standard. MR. SKIDELSKY refrains from such reasonings. His interest in Keynes's private life is not in drawing strained connections between sexual habits and intellectual achievements but in discovering a stereoscopic framework that allows us to merge into a single coherent image the sociosexual deviant and the sociopolitical devout, the person able to write, even in jest, about swindling the public and the person who was to become the voice of outraged public conscience at the punishment imposed on Germany after the war. The task Mr. Skidelsky sets himself is to merge narrative and explication, each enlarging, but never obscuring, the other.

Mr. Skidelsky seeks this biographical objective in two ways. His book interweaves chapters of exposition of ideas, such as those found in Keynes's first book on Indian finance or his remarkable ''Treatise on Probability,'' with chapters that carry forward the story proper - Cambridge life with its focus on the select society, known as the Apostles, that formed the nucleus of his social life, his ambivalent relationship with the Bloomsbury group, a series of stormy love affairs that end with the first hint of a sexual reorientation as the war dries up the supply of available male lovers. The private person who arises from the pages is by turns charming and insupportable, cutting and kind, snobbish and unpresuming; the public person is profoundly serious, extraordinarily hard-working, crushingly intelligent. It is the contradictoriness of reality. The interweaving of social and intellectual themes is only the mechanical means by which a unity of personal and social history is achieved. Mr. Skidelsky is also interested in showing us that the two sides of Keynes - the one deeply imbued with the values of bourgeois civilization, the other scornful of conventional values - reflect a philosophy that had been carefully devised to embrace the claims of both private and public life. Here Mr. Skidelsky draws from a number of papers, some written by Keynes as an undergraduate, one - ''My Early Beliefs'' - read to a small circle of intimates in 1938. As Mr. Skidelsky writes, ''Philosophy provided the foundation of Keynes's life. It came before economics; and the philosophy of ends came before the philosophy of means.''

The philosophy was initially influenced by G. E. Moore's ''Principia Ethica,'' a book that exerted a near-hypnotic influence on its readers, especially its Bloomsbury readers, in the early 1900's. In Keynes's words, Moore's philosophy urged the cultivation of ''timeless, passionate states of contemplation and communion, largely unattached to 'before' and 'after.' . . . The appropriate subjects . . . were a beloved person, beauty and truth, and one's prime objects in life were love, the creation and enjoyment of aesthetic experience and the pursuit of knowledge. Of these, love came a long way first.''

Keynes goes on to say in his 1938 paper that these first passionate convictions brought both gain and loss. The gain was an escape from the Benthamite calculus of economic self-congratulation. The loss was a ''disastrously mistaken'' view of human nature, and a blithe indifference to the frailty and vulnerability of civilization, that ''thin and precarious crust erected by the personality and will of the few, and only maintained by rules and conventions skilfully put across and guilefully preserved.'' These last words prepare us for a second source of Keynes's personal philosophy, the pragmatic conservatism of Edmund Burke. ''Burke ever held, and held rightly,'' Keynes wrote in a prize-winning essay in 1904, ''that it can seldom be right to sacrifice the well-being of a nation for a generation, to plunge whole communities in distress, or to destroy a beneficent institution for the sake of a supposed millennium in the comparatively remote future.''

Keynes's life was balanced, says Mr. Skidelsky, between the moral claims of Moore and Burke. ''His duty as an individual was to achieve good states of mind for himself and for those he was directly concerned with; his duty as a citizen was to help achieve a happy state of affairs for society. . . . He attached greater priority to the first than to the second, except when he thought the state was in danger. He was as timid about his expectations of realizing good states of mind on a large scale as he was bold in his expectations about the amount of happiness or utility a government could deliver.'' THE balancing act takes on additional meaning when we reflect on the Indian summer of the prewar era. Keynes was now a respected academic figure, editor of the prestigious Economic Journal, called on by Government departments for advice, already successful as a private speculator. For him and for his friends and lovers in the Bloomsbury group the world seemed full of promise. A new era of artistic innovation was beginning; the old world of moral and personal constraint and hypocrisy was ending. The world was amusing, inviting, even progressive. To separate the sphere in which private pleasures could be pursued and savored from that in which public goals were promoted seemed an entirely reasonable solution for life's conflicting demands.

The outbreak of war in 1914 came as an enormous blow to this delicate life plan. Keynes was almost immediately drawn into war service as an official of the Treasury, a job he claimed to detest but seemed in fact to relish. The war, at first remote and unreal, began to assume monstrous dimensions. Some of his friends were killed; others objected ''from conscience'' to their impressment in a conflict interpreted by them as wholly senseless. Keynes himself, although safeguarded by his official responsibilities, nonetheless applied for conscientious objector status, probably, Mr. Skidelsky believes, on the grounds that the war should be speedily terminated by treaty, not pursued as a fight to the finish. THE mounting tension between the Bloomsbury denunciation of the war as immoral and the prestige of Keynes's own position in the war effort helps explain the extraordinary passion with which Keynes concluded his war experience. The conflict finally over, he was asked to come to Paris as chief Treasury representative to the British delegation. There he witnessed with despair the forging of a peace treaty whose Draconian provisions filled him with forebodings. All counsels of moderation were ignored, as vengefulness, expediency and moral sanctimony combined to impose a vindictive peace. Resigning when it was apparent that nothing could save the day, Keynes set to work on one of the most effective polemics ever written. But as Mr. Skidelsky points out, ''the fury which went into The Economic Consequences of the Peace was not the product of the Peace Conference alone but had been building up throughout the war. . . . Keynes carried to the conference a burden not just of collective guilt but of personal guilt for his part in the war. He was looking for a way of making an act of personal reparation.''

The polemic was not without its serious flaws. Correct about the destructive effects of unworkable and vindictive reparations, it was a good deal less than right in its appraisal of the limits of available maneuver, or the motives of many of the central figures. Nonetheless, in two respects the book was a climactic moment in Keynes's career. The dazzling style and incisive argument made its author world-famous and thereby set the stage for the extraordinary influence that Keynes would exert in the decades to come. Equally important was an inflection in his general economic outlook. Robert Skidelsky writes: ''From the biographical point of view The Economic Consequences of the Peace is a key document. It marked a radical shift in Keynes's thought from the nineteenth-century assumption of 'automatic' economic progress sustained by liberal institutions to a view of the future in which prosperity would have to be strenuously won in the teeth of the adverse circumstances which the war had created.''

This change in point of view was, of course, to set the task of the remaining 26 years of Keynes's life. These would be the years that produced ''The General Theory of Employment, Interest and Money,'' the book that changed the way we think about capitalism. That extraordinary story must be the grand theme of the volume to come, whose appearance all admirers of the art of biography will eagerly await. A THOROUGHLY SUBVERSIVE VISION

As a historian specializing in the interwar period, Robert Skidelsky found himself frequently confronted and impressed by the problem of understanding the pre-eminent economist of that era, John Maynard Keynes.

''My work centered on the period of the Great Depression,'' he said in a recent telephone interview from the University of Warwick in England, where he teaches international studies, ''and Keynes was central to the debate about how to deal with the slump. He was unusual in that he combined theoretical interests with tremendous practical concerns.''

Mr. Skidelsky found, however, that the first major biography of Keynes, written by Sir Roy Harrod in the early 1950's, did not provide what he felt was an adequate rendering of a unique man. By downplaying or omitting many aspects of Keynes's personal life, including his homosexuality, Mr. Skidelsky said, ''the Harrod biography didn't give as vivid and true a portrait of the man as was justified. It made him out to be less creative, in a way, and less interesting that he truly was.

''If you paint Keynes as a conventional man, and picture his personal affairs in those terms, then you are not prepared to understand his break with convention in other areas. Keynes had a subversive attitude toward a whole range of Victorian morals and conventions, which enabled him to see economic problems in a very unusual way.'' In undertaking his own study of Keynes's life, Mr. Skidelsky benefited from his subject's interest in leaving a record of his experiences. ''One of the things to remember about the Keynes family and the Bloomsbury circle,'' Mr. Skidelsky observed, ''was that they were hoarders. They wanted certain aspects of their lives -including their sexual lives - to be kept for history.''

''A key problem was winning the confidence of the Keynes family,'' he said. ''Keynes's brother Geoffrey was still alive when I started work, and the family knew I was going to be much franker than past scholars had been. Reassuring them that I had a serious purpose, and that I was not going to produce something trivial and scandalous, took a lot of time, but in the end they were won over.''

Mr. Skidelsky will take time off from teaching next year to finish the second volume of the biography. But having devoted five years of research to his subject, he is cautious about making firm predictions. ''It's like economic forecasting,'' he said. ''You never get it right.'' -- Mark A. Uhlig