1This book is best seen as an impassioned plea for a better way to do economics, for which Keynes is the inspiration. Despite its title, it is not a biography of Keynes: it is more like a biography of Keynesianism, interpreted in a radical way. Carter writes:

Keynesianism in this purest, simplest form is not so much a school of thought as a spirit of radical optimism… [S]uch optimism is a vital and necessary element of everyday life. It is the spirit that propels us to go on living in the face of unavoidable suffering, that compels us to call in love when our hearts have been broken, and that gives us the courage to bring children into the world, believing that even in times such as these we are surrounded by enough beauty to fill lifetime after lifetime. (532)

2Carter presents Keynes as a “mystic” rather than as a technician (221). He offers a Keynes for our modern age—the age of populism, the emergence of strongmen and threats to democracy.

Keynes’ slim masterpiece [Economic Consequences of the Peace] remains essential today not because of its statistical prowess or its analytical detail but because the mass psychology he presented would prove so integral to the great tragedies of the twentieth century. And the explanatory power of his narrative can be applied with only modest revisions to the great problems of the twenty-first century. Substitute the financial crisis of 2008 for the Great War, swap European austerity budgets and the American foreclosure crisis for war debts and reparations, and the result is a modern recipe for militant far-right nationalism. (99)

3The Price of Peace is brilliantly written, in an exciting style, telling the personal stories behind those involved, and eschewing technical details. There are clear heroes and villains and the book conveys a message that many critics of contemporary economics will want to hear. It is easy to understand why it is a best seller. However, the story rests on serious errors and on claims for which evidence is lacking. This review begins by outlining Carter’s argument.

4Starting with the story with the most universal appeal, Carter opens the book with an account of Keynes’s sex life, and his entrancement with the ballerina, Lydia Lopokova whom he later married. This was just before his visit, as a journalist, to the financial conference at Genoa which, like his relationship with Lydia, marked a turning point in his life. From there, Carter takes the story back to Keynes’s earlier work, interweaving accounts of his early philosophical work, his private life at Cambridge and as a member of the Bloomsbury group, and an account of his rise in the wartime Treasury. This sets the stage for a chapter on the Versailles conference and Economic Consequences of the Peace, the book that made him a celebrity. There are then chapters on Keynes’s transition from philosopher to monetary economist, and a detailed coverage of his thinking on politics, socialism, and the role of the state in the mid-1920s.

5The stage then moves to the United States, with the Great Depression, covering Keynes’s involvement in the Committee on Finance and Industry and the emergence of the New Deal under Franklin Roosevelt. There then follows one of the most important chapters for Carter’s main argument, titled “The end of scarcity.” One reason for its importance is that is where Joan Robinson comes on stage. The young, left-wing author of The Economics of Imperfect Competition became drawn into Keynes’s workshopping of the ideas that would become the General Theory (249). Robinson was the one who persuaded Keynes he was instigating a revolution, and she and her colleagues helped Keynes write what was to become his magnum opus, namely The General Theory of Employment, Interest and Money (1936).

6The fate of Keynes’s Bloomsbury friends is then used, through the death of Vanessa Bell’s son Julian, to lead into discussion of the Spanish Civil War and reiteration of Keynes’s thoughts about the importance of peace, his ambivalence about Jews and anti-semitism, even as he attempted to assist his Jewish friends. From here the story jumps back to the United States and the New Deal, and the introduction of the economist who dominates the later chapters, John Kenneth Galbraith who, like Keynes, moved from being “a brilliant, underappreciated government functionary” to “one of the most important English-speaking public intellectuals of his generation” (286). A key point here is that Roosevelt, in challenging the authority of men like the banker, J. P. Morgan, created space for the academic economist as “the dominant intellectual figure in American politics” (295). This included many who were or became Keynesians. This also provoked the beginning of the conservative backlash against Keynes and what he stood for.

7The subsequent story of Keynesianism is that a doctrine “developed explicitly to combat ‘militarism,’ [domestic prosperity was linked to international peace] became essential to the maintenance of a permanently militarized world.” (309) By the 1960s, “nobody thought about Keynesian economics as an international idea. … Keynes the philosopher of war and peace had given way to Keynes the fiscal therapist” (441-442). The key steps took place during the Second World War, during which the Keynesian revolution was established along with “the elements of a potent aristocratic counterrevolution” (336). After noting Keynes’s death, the book turns to Hayek and the contrast between Keynes’s and Hayek’s political philosophies. This is the prelude to a chapter on the conservative reaction against Keynesianism, in which “McCarthyist crusaders sought to discredit New Deal intellectuals” a purge which “profoundly shaped the development of Keynesian economics, as Keynesians were either forced out of work or pressured to disguise their ideas in conservative clothing” (374).

8Carter’s view of Keynes is developed further in a chapter on the Affluent Society, the term coined by Galbraith to describe the United States in the 1950s. Keynes is interpreted as a radical critic of quantification and mathematization, and hence of the approach underlying the “Keynesian” orthodoxy of the 1950s and 1960s: the models of “Hicks, Hanson [sic], and Samuelson” (400). The reaction against this was led by Galbraith who clearly stated what Carter takes to be one of the General Theory’s most important ideas: that economics is not about scarcity (412).

Only a handful of economic works have captured the public imagination like The Affluent Society. It stands alongside The Economic Consequences of the Peace and The Communist Manifesto as the rare work that proves both wildly popular and enormously influential on public affairs. … [Galbraith’s book] would eventually become an intellectual pillar of Lyndon B. Johnson’s Great Society agenda (415).

9Galbraith’s book was “both a coming-out party for Galbraith’s leftism and a call to arms for all of the Keynesian economists who had scaled back their rhetoric and political ambition under the threat of McCarthyism” (420).

10The 1960s marked the beginning of the end for Keynesianism. The Vietnam war, Carter claims, showed how little Keynes had achieved at Bretton Woods, the international monetary system having failed to stop the United States from becoming a violent power, hostile to “postcolonial nations that did not align with its Cold War interests” (440). The story is then taken forward through the seventies to what Carter calls “The return of the nineteenth century” and the displacement of Keynesianism by Milton Friedman’s monetarism. “The second gilded age,” focused on the Clinton administration then takes the story up to the financial crisis, the subject of the concluding chapter.

11Carter’s interpretation of Keynes has attractive features. For example, it is intriguing to read an account that relates Keynes's professional activities so closely to his private life and which makes Keynes deeply held philosophical and political convictions central to the interpretation of his work. Unfortunately, however, crucial parts of the argument are not consistent with the evidence. For example, Carter’s claim that Keynes deliberately made the General Theory difficult and obscure (256) is surely contradicted by the evidence in his correspondence (Keynes 1971-89, vols. 13-14). To describe Lionel Robbins as one of Keynes’s Cambridge colleagues (204) is a serious mistake because not only was Robbins never at Cambridge but it was the London School of Economics under Robbins that shaped the study of British economics after the Second World War. The claim that Keynes joined the “economics department” at Cambridge in 1908, when the Faculty of Economics and Politics (the nearest equivalent to an economics department) was not established until 1926 is a trivial mistake, but it reveals a lack of knowledge about an institution that was central to Keynes’s career.

12Carter is entitled to take the view that Keynes rivalled Wittgenstein as a philosopher, though I find it hard to believe that many philosophers would agree. Moreover, Carter provides no evidence that it was due to Wittgenstein that the Treatise on Probability became “a transitional work” (114). We simply do not know what Keynes and Wittgenstein discussed, and the relationship between the Treatise on Probability and Keynes’s later work is problematic. It would surely have been better to discuss the role of Frank Ramsey, who undoubtedly did influence Keynes’s thinking on probability (see Misak, 2020). Carter’s remark that having Sraffa publish a “vicious attack” on Hayek’s Prices and Production as a way for Keynes to “get in his punches while presenting himself to the academic community as a man above the fray, too absorbed in important theoretical matters to concern himself with the buzzing of a comparatively small man like Hayek” is not supported by any evidence (250). As the remark belittles both Sraffa and Keynes, such a claim needs to be documented.

13Carter is correct in saying that between the Treatise on Money and the General Theory, Keynes changed the way he defined saving and investment, but to say that he now agreed with Hayek is highly misleading: the difference was still there, expressed in different terminology. Carter claims that the General Theory was not a publishing success, using the argument that no American paperback edition was produced until the 1960s. However, perhaps the absence of a paperback is explained by the fact that Keynes priced the hardback so cheaply that a paperback was redundant (one reviewer claimed that it should have cost 15 shillings rather than the 5 shillings at which it was sold), and is it not a tribute to the book’s success that it was still in demand in the 1960s? Also, neither Carter, nor anyone else has produced evidence that Keynes’s achieving such prominence in Cambridge significantly held back Joan Robinson’s career (248). As Aslanbegui and Oakes (2009) have shown, Keynes was a supporter of Robinson.

14Turning from Keynes to economics more widely, Carter alleges that economics before the General Theory was concerned “almost exclusively” with scarcity and efficiency (256). This is a baffling claim, wholly inconsistent with there being a voluminous literature on the problem of money, the business cycle and unemployment (see Laidler, 1999). Keynes is described as being a “monetarist” in the 1920s. This is incorrect because monetarism (a term that came into common use only after 1968, to describe the ideas of which Milton Friedman was the main representative) involved much more than the quantity theory of money. The offending sentence could easily be corrected by substituting the phrase “quantity theorist,” but it suggests a lack of understanding. And Carter’s critique of mainstream Keynesianism relies on a view of the Phillips curve that has been shown, by James Forder (2014), to be a myth.

15Because Samuelson plays such a central role in Carter’s story, the most serious factual error is arguably in claiming that Galbraith and Samuelson were passed over for tenure at Harvard in 1948 (407). There was an attempt to block Galbraith’s appointment to a professorship, but Samuelson had moved to the Massachusetts Institute of Technology (MIT) in 1940 and, having been on the faculty for only a month, he was never up for tenure at Harvard; he left because he received a better offer. Carter cites my book at one point (Backhouse, 2017) but this error makes it difficult to believe he has read it. It contains an entire chapter on Samuelson’s move to MIT. Even more significantly, approximately half the book is on the years 1940-1948, the period during which Samuelson and Hansen developed the Keynesianism of which Carter is so critical. It was in these years, at MIT, that Samuelson wrote the textbook that presented what became mainstream Keynesianism and supervised Lawrence Klein’s doctoral thesis. Describing Klein as an “economic historian” raises questions about Carter’s understanding of both Klein and the economics profession more generally.

16The book’s claim that McCarthyism shaped mainstream Keynesianism rests primarily on the conventional view that the textbook by Lorie Tarshis was killed by its conservative critics. There is no evidence for this claim. Tarshis’s book was viciously attacked—there is no doubt about that—but, at the same time, Samuelson’s textbook, written in a much more student-friendly style, was published, and many instructors switched. In the absence of further evidence, what right have we to impugn the integrity of teachers by asserting that they switched because of external pressure rather than because they preferred Samuelson’s textbook? If anything, the evidence goes against the conventional view. A survey undertaken in 1951, when colleges were being attacked for using Samuelson’s textbook, looked for evidence that universities had given in to outside pressure but failed to find any (Apel, 1955). It was a time when even conservative university presidents attached importance to the principle of academic freedom even if, personally, they sympathized with the views of those criticizing Keynesian textbooks (for example, President Conant at Harvard, stood up for Galbraith, Parker, 2005, 231; and successive MIT presidents stood up for Samuelson). Keynesians were attacked but we have no evidence that they did not hold their ground (this point is substantially the same as the evidence-based argument made in Weintraub, 2017).

17Carter’s image of Samuelson is a caricature. Samuelson certainly defended the use of mathematics and is famous for denouncing “the laborious literary working over of essentially simple mathematical concepts” (Samuelson, 1947, 6). However, it is ridiculous to jump from that to the conclusion that he “regarded even his own English-language output as substantively superfluous” (430). If Carter is right, why was Samuelson’s English-language output so voluminous?

18Samuelson may have viewed markets more favorably than did Galbraith but if he “adored markets” (430) why did he produce theories of how markets failed, and why did he criticize Milton Friedman (who arguably did adore markets) for going too far in that direction? Like Galbraith, Samuelson, at least in the 1940s and 1950s, believed that markets were generally imperfectly competitive, describing pure competition as an “unusual and rare case” (Samuelson, 1948, 509). Carter cites Robert Solow’s very critical review of Galbraith’s New Industrial State but, given his focus on Samuelson, it is misleading not to mention that Samuelson was less critical: Samuelson questioned some of the details in Galbraith’s work but concluded “the objective scholar must assert that economics will never be the same as in the days before the Galbraith trilogy” (Samuelson, 1970, 488). Samuelson’s account of Galbraith’s work does not strike me as unsympathetic.

19Carter also tries to drive two other wedges between Galbraith and Samuelson. Galbraith was certainly more willing to criticize American foreign policy than was Samuelson; but for Samuelson this is because he sought to focus on economics. Samuelson may have been willing to adjust his recommendations to suit the presidential and congressional mood, but this is precisely what Keynes did: when Keynes realised that the return to the gold standard was a fact of life, he turned to other remedies for the unemployment problem it had created. In order to be fair to Samuelson, Carter should have mentioned that he was critical of the military-industrial complex and that he repeatedly made the point that military spending was not necessary to maintain full employment. This was important for Samuelson, who believed the level of government spending should be determined by the level of publicly provided goods and services that voters wanted, and that taxation should then be adjusted to ensure the appropriate level of aggregate demand. In short, he believed that the democratic process should determine spending priorities. This places the contrast between Galbraith’s desire for higher government spending and Samuelson’s advocacy of tax cuts in the early 1960s in a significantly different perspective.

20Carter claims that Samuelson abandoned the Keynesian concern with distribution. It is true that Keynes believed that his theory removed the social justification for an unequal distribution of wealth (270). But it is disingenuous to jump to the conclusion that the General Theory reframed the central problem of modern economics as the alleviation of inequality (255). This was true of the underconsumptionist, J. A. Hobson, but surely not of Keynes. Carter quotes Keynes’s favourable attitude to William Beveridge’s proposals for a welfare state but fails to note his caution about the rate of unemployment that could be achieved. His interpretation of Keynes is impossible to reconcile with Robert Skidelsky’s claim that Keynes was never passionate about the ideas associated with the concept of social justice. In contrast, Samuelson was concerned with income distribution. A major wartime project in which he was involved was working out the implications of a more equal distribution of income for the level of consumption and hence employment. A few years later, his textbook was among the first to draw attention to inequality between white and black, and between men and women, and he repeatedly pointed to the problems of black unemployment. In short, there were differences between Galbraith and Samuelson, but they were less than Carter would have us believe.

21The claim that we should see Keynes not as contributing to technical economics but as working out a strategy for creating peace, which was subverted by attacks from the right, is consistent with Carter’s seeing Keynes’s main battle as being with Hayek and taking the view that his legacy was carried on primarily by Robinson and Galbraith. It is, of course, legitimate to focus on Keynes as a political philosopher and to explore the political philosophy of the Cold War and post-Cold War eras. Such an account will inevitably place less emphasis than is customary on mainstream economics. However, the argument is taken too far and gets both Keynes and mainstream Keynesianism, represented by Samuelson, seriously wrong. Keynes was always looking for practical solutions: he was technician as well as visionary, expressed in his famous remark about how economists should become more like dentists. We should take seriously Keynes’s assertion that his General Theory was a work in economic theory, to which he appended a note on social philosophy. And we should not dismiss lightly his encouragement of those who tried to develop his ideas in different ways. Samuelson and mainstream American Keynesians did adapt Keynesian ideas to fit new situations but, in doing this, they were much closer to Keynes than Carter would have us believe.

22There is a lot wrong with this book. This is frustrating because the book also contains much that is of interest. In focusing on the way Keynesianism became a key element in postwar social democratic political philosophy, Carter is on to something important. It is also extremely valuable to have attention drawn to what might be called a “left-Keynesian” perspective. Whether mainstream economists like it or not, Galbraith was a major figure in American intellectual life and in American politics in the 1950s and 1960s, and there is a good case for linking him to Robinson. That story needs to be told. However, perhaps Robinson’s remark that “we had some trouble in getting Maynard to see what the point of his revolution really was” (251) suggests that her perspective and his were different; Keynes was a complex figure, in some ways more radical but in others more conservative than the conventional picture implies. In presenting one side of Keynes in isolation from others, he is misrepresented. Similarly, some mainstream Keynesians were Cold-War and Vietnam-War hawks, but many were not. Exaggerating Keynes’s left-wing credentials and minimizing those of mainstream Keynesians may make for a book that is more palatable to a mass market, both because it makes it easier to avoid technical economics and because it creates clear heroes and villains, but it does not constitute reliable history.