Editing John Maynard Keynes (section)

===Second World War===
[[Image:WhiteandKeynes.jpg|thumb|upright| Keynes (right) and the US representative [[Harry Dexter White]] at the inaugural meeting of the [[International Monetary Fund]]'s Board of Governors in [[Savannah, Georgia]] in 1946]]
During the [[Second World War]], Keynes argued in ''[[How to Pay for the War]]'', published in 1940, that the war effort should be largely financed by higher taxation and especially by compulsory saving (essentially workers lending money to the government), rather than [[deficit spending]], to avoid inflation. Compulsory saving would act to dampen domestic demand, assist in channelling additional output towards the war efforts, would be fairer than punitive taxation and would have the advantage of helping to avoid a post-war slump by boosting demand once workers were allowed to withdraw their savings. In September 1941 he was proposed to fill a vacancy in the Court of Directors of the [[Bank of England]], and subsequently carried out a full term from the following April.<ref>Gazettes: {{ubl|{{London Gazette|issue=35279|page=5489|date=19 September 1941}} | {{London Gazette|issue=35511|page=1540|date=3 April 1942}} }}</ref> In June 1942, Keynes was rewarded for his service with a [[hereditary peer]]age in the King's Birthday Honours.<ref name="TheLondon">{{London Gazette|issue=35586|page=2475|date=5 June 1942}}</ref> On 7 July his title was [[The London Gazette|gazetted]] as "'''Baron Keynes''', of Tilton, in the County of [[Sussex]]" and he took his seat in the [[House of Lords]] on the [[Liberal Party (UK)|Liberal Party]] benches.<ref>{{London Gazette|issue=35623|page=2987|date=7 July 1942}}</ref>

As the [[Allies of World War II|Allied]] victory began to look certain, Keynes was heavily involved, as leader of the British delegation and chairman of the [[World Bank]] commission, in the mid-1944 negotiations that established the [[Bretton Woods system]]. The Keynes plan, concerning an international clearing-union, argued for a radical system for the management of currencies. He proposed the creation of a common world unit of currency, the [[bancor]] and new global institutions{{snd}}a world [[central bank]] and the [[International Clearing Union]]. Keynes envisaged these institutions as managing an international trade and payments system with strong incentives for countries to avoid substantial trade deficits or surpluses.<ref>{{Cite journal|last=Duggan|first=M. C.|title=Taking Back Globalization: A China-United States Counterfactual Using Keynes's 1941 International Clearing Union|url=https://www.academia.edu/21885358|journal=Review of Radical Political Economics|language=en|volume=45|issue=4|pages=508–516 |doi=10.1177/0486613412475191|s2cid=154224790|issn=0486-6134|access-date=12 March 2018|archive-date=10 May 2021|archive-url=https://web.archive.org/web/20210510133835/https://www.academia.edu/21885358/Taking_Back_Globalization_A_China_United_States_Counterfactual_Using_Keyness_1941_International_Clearing_Union|url-status=live}}</ref> The USA's greater negotiating strength, however, meant that the outcomes accorded more closely to the more conservative plans of [[Harry Dexter White]]. According to US economist [[J. Bradford DeLong]], on almost every point where he was overruled by the Americans, Keynes was later proven correct by events.<ref>{{cite web|author=Brad Delong|date=December 2000
|url= http://econ161.berkeley.edu/Econ_Articles/reviews/skidelsky3.html
|title= Review of Robert Skidelsky, John Maynard Keynes: ''Fighting for Britain 1937–1946''
|publisher=Berkeley university
|access-date= 14 June 2009
|archive-date= 14 October 2009
|archive-url= https://web.archive.org/web/20091014073814/http://econ161.berkeley.edu/Econ_Articles/reviews/skidelsky3.html}}
* {{cite journal |last1=DeLong |first1=J. Bradford |title=Review of Skidelsky's John Maynard Keynes: ''Fighting for Britain'' |journal=Journal of Economic Literature |date=1 February 2002 |volume=40 |issue=1 |pages=155–162 |doi=10.1257/0022051027010}}</ref>

The two new institutions, later known as the World Bank and the [[International Monetary Fund]] (IMF), were founded as a compromise that primarily reflected the American vision. There would be no incentives for states to avoid a large [[Balance of trade|trade surplus]]; instead, the burden for correcting a trade imbalance would continue to fall only on the [[Deficit spending|deficit]] countries, which Keynes had argued were least able to address the problem without inflicting economic hardship on their populations. Yet, Keynes was still pleased when accepting the final agreement, saying that if the institutions stayed true to their founding principles, "the brotherhood of man will have become more than a phrase."<ref>
{{cite book
|last=Keynes
|first=John Maynard
|editor-first=Donald |editor-last=Moggridge
|title=Activities 1941–1946: Shaping the post war world
|series=The Collected Writings of John Maynard Keynes
|year=1980
|volume=26
|chapter=Speech by Lord Keynes in Moving to Accept the Final Act at the Closing Plenary Session, Bretton Woods, 22 July 1944
|page=103
|publisher=London: Macmillan
|isbn=0-333-10736-5
}}
</ref><ref>
{{cite book
|first = G. Edward
|last=Griffin
|title=The Creature from Jekyll Island: A Second Look at the Federal Reserve
|year=2004
|pages= 85–106
|publisher=American Media
|isbn = 0-912986-40-9
}}
</ref>