John Maynard Keynes as a Global Economic Policymaker: First Do the Macro and then Do the Rest

This paper discusses Keynes’s approach to global economic reform after World War II, and considers how such an approach might be applied in current economic conditions. The key problem then facing Britain was one of trade. The United States was likely to impose on Britain an end to Imperial Preference, as a price for its economic support in the war. Yet Keynes argued that, rather than concentrating on trade, it was necessary to begin with macroeconomic reform: he helped to create an International Monetary Fund before any work was done to establish an International Trade Organization. The paper assesses the present-day implications of Keynes’s approach, at a time when unreformed macroeconomic policies, in the form of fiscal austerity, are endangering support for an open international trading system.