Arthur Ross Book Award: “The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes”

Tuesday, December 7, 2021
Tim Gidal / Getty Images

Writer in Residence, Reimagining Capitalism Initiative, Omidyar Network; Author, The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes; 2021 Arthur Ross Book Award Gold Medalist

Chief White House Correspondent, New York Times; Coauthor, The Man Who Ran Washington: The Life and Times of James A. Baker III; 2021 Arthur Ross Book Award Silver Medalist

Staff Writer, New Yorker; Coauthor, The Man Who Ran Washington: The Life and Times of James A. Baker III; 2021 Arthur Ross Book Award Silver Medalist

Peter and Isabel Malkin Professor of Public Policy, Harvard Kennedy School; Coauthor, The Upswing: How America Came Together a Century Ago and How We Can Do It Again; 2021 Arthur Ross Book Award Bronze Medalist

Cofounder, Think Unlimited; Coauthor, The Upswing: How America Came Together a Century Ago and How We Can Do It Again; 2021 Arthur Ross Book Award Bronze Medalist


Mary and David Boies Distinguished Fellow in U.S. Foreign Policy, Council on Foreign Relations; Former Peter G. Peterson Chair and Editor, Foreign Affairs; Chair, Arthur Ross Book Award Jury

Gideon Rose celebrates the winners of this year’s Arthur Ross Book Award: Zachary D. Carter, Peter Baker and Susan B. Glasser, and Robert D. Putnam and Shaylyn Romney Garrett.

ROSE: Good evening, and welcome, everybody. My name is Gideon Rose. I’m the Mary and David Boies Distinguished Fellow in U.S. Foreign Policy in the Studies Department here at the Council, and it is my distinct pleasure this evening to be the moderator for our event on the awarding of this year’s 2021 Arthur Ross Book Awards.

The Arthur Ross Book Award ceremony is a special event because it’s a throwback to the before times when ideas mattered, when words mattered, and people wrote long, serious pieces of work that had an actual thesis, and we engaged in intellectual discussion. That no longer is the dominant mode of the culture these days, but we keep the old flame alive in these sort of tiny little, you know—I feel like the Fremen in Dune; we meet underground in masks and we have our little sacred rituals while the rest of the society is run by Beast Rabban and all that.

The award was endowed by Arthur Ross in 2001 to honor nonfiction works in English or in translation that bring forth new information that changes our understanding of events or problems, develops analytical approaches that offer insight into critical issues, or introduces ideas that help resolve foreign policy problems. This is obviously a very general remit and we have a whole number of possible works that can meet it every year, and this year we had over a hundred nominations and we had a spectacular jury—Lisa Anderson, Kwame Anthony Appiah, Sumit Ganguly, Michelle Gavin, Paul Golob, Calvin Sims, Andrew Ross Sorkin, Sue Mi Terry—and we met to consider all these wonderful things and we basically selected from a spectacular group of finalists.

This year’s finalists were Jia Lynn Yang for One Mighty and Irresistible Tide: The Epic Struggle Over American Immigration: 1924-1965; Margaret MacMillan for War—for Margaret MacMillan, War: How Conflict Shaped Us; John Ikenberry, A World Safe For Democracy: Liberal Internationalism and the Crises of Global Order; Robert Gates, Exercise of Power: American Failures, Successes, and a New Path Forward in the Post-Cold War World; and our three medalists. The Bronze prize—the Bronze Medal will go to Robert Putnam and Shaylyn Romney Garrett for The Upswing: How America Came Together a Century Ago and How We Can Do It Again; the Silver Medal will go to Peter Baker and Susan Glasser for The Man Who Ran Washington: The Life and Times of James A. Baker III; and this year’s Gold Medal will go to Zach Carter for The Price of Peace: Money, Democracy, and The Life of John Maynard Keynes.

Let me just say a second before I turn to Bob and Shaylyn to discuss their book, to reinforce the vital importance of the kind of work that this award recognizes. We were talking in the Green Room about the significant chunk of one’s life that one invests in these projects. I should say that our Gold Medal winner happens to be married to one of our other finalists, and so Jia and Zachary are an incredible power couple over here who have two out of the half dozen books that are the finalists. And it’s rare for them to get the kind of recognition—any author to get the kind of recognition that they deserve for the kind of work put in and it’s a real delight for us to be able to single out works of consequence that merit it in a society that doesn’t always recognize it.

So with that, let’s turn for a second to Bob Putnam and Shaylyn Romney Garrett, so if you can turn on the video for that, and I will chat with you guys virtually.

We are connecting now.

Oh, there you are. OK, so that’s fair.


ROSE: Got it.

Hello, Bob.

Hello, Shaylyn.

By the way, these are spectacular people who I had at a wonderful Council session just the other day to talk about their work and it is spectacular.

And let me start by saying what I said at the beginning of that session last week, which was that if I were a peer of yours, if I were writing on the subjects, which is basically American political culture and its dramatic decline over the last half century, and what came before and what might come after, I’d be very annoyed—not just jealous but annoyed—because what you guys managed to do is to blow away every other theory that exists, and essentially this book charts America’s civic culture from the Gilded Age nadir all the way up to the ’60s and the sort of gradual swing of communitarian thinking and social engagement and civic activity and rising equality and political comity, and then a long slide down over half a century of increasing political partisanship, increasing economic inequality, increasing social dysfunction, and various things. And the broad pattern of this curve up and then down is not only fascinating, backed up by a wealth of statistics, more than any of us will ever read in our lives—they got the facts right—and the question of what accounts for this grand pendulum in American history. And that’s why I say it’s so annoying because all of our pet theories for what is going on—it’s technology, it’s economic inequality, it’s this and it’s that—seem to be blown away by the empirical data that they bring in.

And so, Bob and Shaylyn, let me ask you that question to start with, which is, is the problem with our times that essentially we are living in the Murder on the Orient Express in which everybody did it, everything matters, and everything—the victim was killed by lots of different causes and it’s not one thing, it’s all the things?

PUTNAM: Well, we can—both of us have to answer that. Both of us, I’m sure, want to answer that and we want to say yes and no to that question.

Shaylyn, shall I say the yes and then you say the no, or the other way around? I’ll say the no. It’s not the Murder on the Orient Express. There is a single theme and we do single out, actually, one leading variable, the one that surprised me, actually—I think it surprises most people. The leading variable in this story that we’re telling about politics and culture and society and economics, the leading variable turns out not to be economics but culture. And what we infer from that is that if we want to get out of the fix that we’re in now, which is, as you say, astonishingly similar to the fix that our predecessors 125 years ago were in at the first—at the end of the first Gilded Age—we probably need to start with morals. We probably need to have a moral reawakening in which we recognize our obligations to one another, because that’s what came first the last time. And I recognize that that’s a kind of countercultural thing to do; it’s not very wonky to say what we need is a moral reawakening.

Shaylyn, why don’t you pick up the story from there?

ROMNEY GARRETT: Yeah, I think one of the main arguments that we make in the book is that looking to the moment when this upswing culminated turns out not to be very instructive. Looking to the moment of its inception is far more powerful because the context of that moment is so strikingly similar to the one that we’re living in today. So if the leading variable in this complex statistical story turns out to be a moral awakening, well, we look, then, back to that historical moment when the Progressives, the capital P Progressives of the Progressive Era, led us through a moral awakening, the likes of which we feel we need today. And that was a fascinating sort of research question to look at how that unfolded. And interestingly, that moral awakening started within Evangelical Christianity and it was about Evangelical Christians looking inward and asking themselves whether they were living their own values. And that sort of moral indignation directed inward, in the words of the historian Richard Hofstadter, as he described this era, is what characterized this awakening that led the upswing last time. And so we don’t need a moral awakening that’s about identifying the bad apples and expelling them from society and saying they’re the problem and we’re the solution; on the contrary, those of us who might consider ourselves in leadership positions in this country or as members of an elite, an intellectual elite or any other form of elite in this country, need to look inward and ask ourselves how we’ve been complicit in this multifaceted downturn that has landed us in the multifaceted crisis we’re in today, a crisis that we have been in once before and got out of.

And so that’s just a few words about what we’re looking for as we look for another upswing today.

PUTNAM: Can I just add quickly, Gideon, that that was not where we started this project. We were both shocked to discover that that was the single-most important lesson. I honestly was shocked when we—it came out of our research. It was not a premise for our research. And neither of us is an Evangelical Christian.


ROSE: No, on that kind of point, there are chapters in this book, summarizing and the research, on all the various things that you think are important or think are driving things or the unmoved mover—particular example, you know, technology—we all know all the problems of information technology and social media and this and that, and of course, there are legitimate ones, but the trends that it’s supposedly driving have been going on much longer than the technology exists, which makes it hard to—you know, a variable—it can’t explain a constant, just like a constant can’t explain a variable.

When I read this I had an interesting feeling of being in the grip of some larger pendulum-type pattern beyond human agency, and when I said this to you, Bob, the other day, you got very excited and upset, and so I want you to explain why this is not in fact a council of despair, why this pattern that you identify of a half-century trend in one direction and a half-century trend in the other direction isn’t in fact meaning that politics is driven by something beyond all of us.

PUTNAM: Actually, I’m sure we both want to answer—Shaylyn, why don’t you start off with that and then I’ll end up talking about Rabbi Sacks?

ROMNEY GARRETT: Sure. I mean, our contention in this book is quite clearly that this is actually not a pendulum swing in the sense that this is not some historical cycle that has some inevitability built into it. So if we swung upward and then we’re swinging downward, then, you know, after a while, once we sort of hit rock bottom, we’re inevitably going to swing upward again. That definitely was not the story when you look back at the last upswing. There was a very clear narrative amongst the Progressives that they were rejecting what they called drift, in the words of Walter Lippman, and they were embracing—again, in his words—what he called mastery—mastering the moment of history in order to push the pendulum in a certain direction. There were young people in that previous era that looked so much like ours today that were, you know—would have been right to despair, just as young people today are right to feel despair. They have only lived during a time of downturn in this country. However, what the Progressives did—many of them extraordinarily young, largely under the age of thirty—what they did was they embraced their agency as actors within a democratic society. And enough of them doing that is what we believe actually turned the tide. And so even though it—from the statistical standpoint it really looks like this is just a cycle that will inevitably turn again, we believe that, on the contrary, this is about human agency and about what each of us chooses to do to create the future that we want to see.

PUTNAM: You asked—

ROSE: We’re seeing a pause and pendulum.

Bob, take us out on Jonathan Sacks.

PUTNAM: Well, many of the people here will know Jonathan Sacks, a brilliant philosopher, the chief rabbi of England, and, sadly, prematurely died earlier this year. And Jonathan makes a—made a very important distinction between hope and optimism. You asked whether we were optimistic, and Jonathan says, there’s a difference between hope and optimism. Optimism is a passive virtue; you’re observing and you’re saying, you know, thumbs up, thumbs down. Hope, he said, is an active virtue. Hope means, here’s what I am going to work to do and cheer for, not just observe. And Jonathan himself was an advocate of hope, not optimism. And that’s the way Shaylyn and I feel. We’re not trying to predict the future, but we’re—and we’re not, in that sense, either optimistic or pessimistic, but we are hopeful because we can see how this could happen again. I don’t say will happen again, but if enough Americans, and especially young Americans, get about the business of reweaving the fabric of this society—politically, economically, socially, and culturally—we can get out of this fix that all of us recognize we’re in.

ROSE: On that note, you should all read The Upswing. It is a major work that will set the stage for future discussion on all of our troubles.

And with that, Bob and Shaylyn, thank you, and please accept virtually the Bronze Medal of the 2021 Arthur Ross Book Awards. (Applause.)

PUTNAM: Thanks very much.


ROSE: Thank you for that. OK.

This is actually kind of interesting; you can bring people in. Marshall McLuhan’s going to come in next.

We are now going to turn to Peter Baker and Susan Glasser.

Do we have them? We will have them coming up soon.

Peter Baker and Susan Glasser—welcome, Peter and Susan, and congratulations on being the Silver Medalists for this year’s Arthur Ross Book Award for a spectacular book, The Man Who Ran Washington: The Life and Times of James Baker III. You know, we have in our three finalists a study of Keynes, we have a study of the Gilded Age and later, and we have a study of recent history. I have to say, of all three books, the one that seems to talk about a time past—

BAKER: (Laughs.)

ROSE: —most passed is the Baker one, because all the problems of the Gilded Age seem back, all the problems of Keynes seem back, personal as well as political and economic. And Jim Baker’s era seems as dead as a doorknob in some ways. And so talk a little bit about this—you guys invested a lot of time and effort to create a spectacular life and times of one of the major figures in American recent diplomatic, political history, you know, political and diplomatic history, and yet the era in which you were writing about was one that was fading as he was himself sort of going out the door, and now seems to be past. Did that give you a weird sense of déjà vu as you were writing this book or a weird sense of the times being out of joint?

BAKER: Yeah, that’s great. Well, Gideon, first of all, thank you so much for hosting us. Thank you to CFR for this great honor. We’re very pleased to be with you. We’re honored to be here with Bob, Shaylyn, and Zach, whose work is all fantastic and to be in that category is really quite flattering. And so thank you very much.

You know, what was striking about this book was it didn’t start off as a book about today. We started it in the dim recesses of the Obama era, in 2013, when Washington was already broken, long before Donald Trump came along. And there was sort of, I think, a desire on our part not to just tell the Jim Baker story, which is fascinating enough, but tell the story of Washington, the Washington of a different generation—not to romanticize, not to in any way mythologize what used to be. Obviously it was a bitterly partisan, at times dysfunctional, mean era in the ’80s and the ’90s, certainly, but it was a different era, a different kind of player in Jim Baker, and we wanted, I think, to talk about that. And I think with the advent of the Trump era it became only more relevant, more timely, more, I think, important to study what happened before and how it compares to Washington today.

GLASSER: Well, yeah. I think that’s right, that there was an element of time travel for us in doing this, you know, a sort of escapism from the day job, largely due to the disruptions of the Trump era. It took us a long time to do this book in a way that sort of made it feel oddly sort of both more distant in time—to your point, your excellent point, Gideon—and also more relevant. And, you know, we started out maybe with a question: What did the sort of politics of Washington in the late Cold War era, how did that speak to Washington’s dysfunction? I think we kind of answered that question for ourselves in a way, in the course of doing this, to understand that you could not divorce Jim Baker from a moment in time that was pretty definitively over. Right? You know, that—like a lot of people, there’s a sort of, especially here in Washington—you know, the cult of Jim Baker is kind of alive and well, like, the greatest White House chief of staff, you know, kind of legendary dealmaker, and there was not a single appearance that we did for this book where people didn’t—(off mic)—couldn’t a Jim Baker just come right now and fix things up and, you know, like, you know, make all right between Congress and the White House? And I think the answer is no. Right? And that speaks to the fact that this is a book about an era and a moment in time in our politics where the structural incentive to fundamentally change in a way that even an exceptionally gifted dealmaker would have a very hard time doing this.

And to Bob’s point, I’m very grateful that there’s somebody, you know, in this conversation who is both hopeful and optimistic, but Peter and I are streaming into this from Washington where there is not a lot of either hope or optimism—(laughs)—so.

ROSE: So let me follow up with a cool thing. When we live our lives, we work on a particular area, a particular set of subjects, and we pay attention to the other stuff via the papers, and then if we go back and write about some other subject than the one we’re working on, it’s almost as if we were working on a different period of history that we weren't living through because we didn’t know the details. You guys lived through the period of this book before you wrote about it. What did you learn in writing the book about the times you had lived in that you hadn’t realized when you were living in them?

BAKER: Yeah, that’s a great question, actually. You’re right. I mean, you know, Susan I think was just getting out of college when Baker became secretary of State; I got out of college a couple years earlier than that, so we were beginning our professional careers as reporters, you know, at the end of Reagan, beginning of Bush, end of Bush. And so we were junior folks at that point. We didn’t, you know, cover the big issues of our time, although obviously, as you say, we read about them in the papers, we followed—I think one of the things we learned was to understand that things in the moment don’t necessarily look how they will look twenty or thirty years from now. Right? Susan likes to say, did we ever realize that November 9th, 1989 would be one of the best days of our lifetime, the day the Berlin Wall fell? Right? We all knew at the time it was an extraordinary achievement. Did we know how it would look thirty years later when, you know, Europe once again is not, in fact, as united as it was at that point—right?—that the hope that we talked about in the previous, you know, section, you know, feels diminished at this moment compared to what it was then.

So I think what I learned is, is we didn’t know—at the time I thought, you know, Washington was kind of broken back then. I didn’t know how well it worked by comparison—(laughs)—to how things would get.

GLASSER: Yeah, definitely. If you told me, you know, in the middle of the 1980s that I would be writing a book about Jim Baker—(laughs)—you know, I probably would be shocked, would have been shocked. You know—

ROSE: Why? Why? Why would he have been such an unlikely subject back then?

GLASSER: You know, I was a child of the very partisan 1980s. I mean, I did not think that, you know, our vantage point on Ronald Reagan was fundamentally, you know, I’d say more of a domestic political one. Certainly in the household I grew up in Ronald Reagan was not a big icon. And I think Peter and I had this experience actually first in Russia. We were correspondents in Moscow ten years after the events described in this book, basically a decade after the end of the Cold War and the fall of the Berlin Wall. And I think that was an invaluable experience, and then this book kind of filled that out, understanding, you know, that there was a very different perspective, especially a foreign policy perspective, on, you know, what came out of the late Cold War policy makers like Jim Baker and George H.W. Bush that was not necessarily apparent in the American political context of the moment. But Peter’s point I think is the main one I would make, which is we were products probably of an exceptional era in American history but thought it was a universal era in American history, and you know, that was—it wasn’t that history ended, as Frank Fukuyama wrote, you know, while working, by the way, for Jim Baker at the State Department; it was more that we just did not understand, you know, what the real lesson at the end of the Cold War was.

ROSE: I could not agree more, as a victim of that same (temp ?) bubble. Our lives have coincided with a very nice late stage of American hegemony and late capitalism, and then it sort of like—yeah. It didn’t—the twenty-first century hasn’t gone the way we sort of expected to back in the later part of the twentieth century.

So on that point, let me actually ask you guys a question on this. You guys are fiercely knowledgeable, legendary writers and editors; you’ve written book after book, edited magazine after magazine after newspaper, and I’m curious: Did you see all this crap coming? Did you see the world going into a—did you see the rise of populism, the hollowing out of American hegemony, the democratic deterioration across the board in not just our country but several others? Did experienced observers and hakhamim like you understand what was going on? And if not, what does that tell us about our sort of understanding of, you know, what might come next if we didn’t predict the mess we’re in right now?

BAKER: Well, did you see it and not tell me? What was the—(laughs)—

GLASSER: Short answer, Gideon: No! No. We didn’t know. We plead ignorance as much as anybody. (Laughs.)

BAKER: You know, we lived in Russia for four years at the beginning of Putin.

GLASSER: We did, and that was very useful in understanding Trump-era Washington, I have to say.

BAKER: Yeah. Some of the same sort of retrenchment and some of the same sort of forces that were at work, I think, in the 2000-2004 range when we were in Moscow we can now see to some extent here in this country—different but similar.

GLASSER: Yeah, I would just—like the final note I would close on would be to say, we totally did not get that Donald Trump was going to sort of steamroll over the entire Republican Party and take it over. I do think that Russia experience was very valuable once he did win and we understood what was going to happen, you know, and both of us had watched the dismantling of, you know, very fledgling and flawed democratic institutions in Russia in that period in the early 2000s when Putin was sort of consolidating his hold. And, you know, you would be shocked at how relevant that experience was to watching Trump-era Republicanism, basically, unfold.

ROSE: You guys have a passion for lost causes. You write books; you work for newspapers and magazines. I mean, this is so retro. (Laughs.) Talk a little bit, as legendary media figures of your day, about the changing media landscape and how basically—what is—you started your careers in one media environment and are going to end it in a completely different one. How does that feel and does that have any effect on the substance of what is discussed and talked about?

BAKER: I think it does. It’s extraordinarily accelerated. I mean, from the time that we started out, you know, as newspaper reporters—I did, anyway—would write one story a day, you know, at 6:00 in the afternoon. You’d have time to sit there and think about it. I’d digest it and talk about it before you actually put pen to paper. Today, you know, you’re filing—as a newspaper reporter, anyway—instantaneously, and even Susan for the New Yorker is moving at what the New Yorker, once a week, would consider to be light speed—right?—compared to where its historical models have been. So there’s not as much time as there used to be to kind of sit there and digest and think about it. Think about the Trump era. You know, we’re reconstructing now for a new book we’re working on about the Trump presidency. As we go back, it’s like, oh, I forgot about that and I forgot about that, because some big thing happened, some outrage, some whatever, and it was quickly overtaken by events at such an accelerated pace. So the media obviously has tried to keep up with that, and we’re adjusting and we’re adapting. I would say that, you know, I’m both hopeful and optimistic about the media today and I think The New York Times, just to say, you know, we may be failing in somebody’s mind, but we have more readers, more subscribers, more reporters, more editors, and more news than ever before, and I think that, you know, there are problems in the media, particularly in the local and state areas, but at the national level, anyway, we’re alive and doing well.

GLASSER: Peter has the designated hope and optimism in the family. (Laughs.) I’ll leave it to that, except to say that—

ROSE: Here’s the rebuttal. (Laughs.)

GLASSER: No. You know, the truth of the matter is we’re so old now we’re getting even more retro and writing more books. (Laughs.) You know, we’ll let someone else, like maybe our teenage son, you know, answer the question about what comes next.

ROSE: I’ve come to think that we’re a bit like classical music. Our field is a bit like classical music in the sense that you could say that it’s the best of times and the worst of times. On the one hand, there’s never been more good classical music being produced or available; if you are a classical music lover you can listen to more stuff, more times. And yet, it does not dominate the culture the way it did a century ago or even, you know, a few generations ago, and maybe that’s the same for the kind of intellectual work we do.

OK. I’m going to send you guys out with a bang. The Man Who Ran Washington, like, what one thing of this tome—we all lived through this era. We all if not knew Jim Baker then saw him and, you know, said we knew him or at least had an acquaintance. What will people learn—give me one fact that people will learn from this that they absolutely did not know.

BAKER: Oh. Well, there’s a whole story about his family tragedy, which I’m not going to spoil for the reader, but it is incredibly gripping, and it tells you more about the relationship between Jim Baker and George Bush than anybody, I think, has known.

You know, I think to understand that relationship you have to know what’s in this book about the family tragedy that Jim Baker goes through and how George Bush is there as his friend. That has great consequences because we’ve never had a president and secretary of state as personally close as those two people were at the moment when you most needed that to happen.

ROSE: Excellent. Thank you very much.

Susan Glasser, Peter Baker. Great book. Buy it. Read it. And we’ll see you in the future. Take care. (Applause.)

BAKER: Thank you, guys.

GLASSER: Thanks, Gideon. Thank you so much.

ROSE: OK. And we will now turn to Zachary Carter. Zach, come up here, please.

Well, now, you see the softballs I lobbed at them. I got the tough ones for you because you’re here.

So our Gold Medal winner this year is The Price of Peace: Money, Democracy, and the Life of John Maynard Keynes. This is a fabulous book, and the thing you have to know about it is there are a zillion biographies of Keynes out there. How many at this point? There are a zillion volumes of a zillion biographies of Keynes out there.

Why did we need another book on Keynes and what did you mine—how did you mine this subject for another book on the same subject of all those other books and still make it good enough to win an award?

CARTER: A question that, I think, concerned a lot of publishers in 2016 and 2017—(laughter)—when I was trying to shop the book around. We didn’t get a whole lot of takers. There weren’t a ton of bids, and a really frequent rebuttal was, like, who cares? I mean, aren’t there nine of these? And the frustration for me is that I—you know, I had not read every single Keynes biography when I was putting together this proposal but I had lived through the great financial crisis of 2008 and I’ve been a banking reporter, and it just struck me that absolutely everything I had learned from sources and from economists and experts about how financials worked or at least were supposed to work had just, obviously, not been reality for the time that I had been a banking reporter, and everybody very quickly adjusted.

I mean, the consequences were terrible for the country and the world. But within the banking system, you know, there was—people were—became very comfortable with the idea of government intervention for bankers very quickly, and I don’t think that was entirely just, like, you know, self-interest run amok. I think people really did change their minds about how they thought the relationship between markets and governments should be constructed.

But I didn’t think there was any way these people could be super well-versed in theories about that if they just changed their minds on the fly. So no matter how many biographies there were about John Maynard Keynes, I figured just nobody had read them. (Laughs.) And when I went and tried to read some of Keynes in the original material—you know, the primary source material—I was shocked by what I was finding.

And I didn’t come to it as a Keynes scholar or as an academic who had been working on it for years—this is 2008, 2009. I was a banking reporter who just thought, oh, this will really help me get an edge on all the other banking reporters who don’t know anything about Keynesian economics, and that turned out to be completely wrong.

It was utterly useless for my career as a reporter. But I was so fascinated by the way Keynes would talk about what economics was for, what the economy was for. He was, clearly, a philosopher who was working with economics within this broader system of ideas about democracy and power, and the good life and art—(laughs)—and all this stuff that just seemed not very, you know, traders on the stock market.

And I thought, well, there’s something really interesting here about our current moment. The stuff that he’s afraid of, the stuff that he’s concerned with, seems exactly of 2009, 2010, when I was reading him, and I just thought it was crazy that people don’t see that this is the central thing that we all have to be—(laughs)—we all have to learn about for this moment.

ROSE: By the way, what you can see in this is the charm and the energy and the innocence of the author, which expresses itself in the book and makes it an absolute delight to read because, actually, I would have said one of the first things about this is it’s just extraordinarily well written, and it makes a story that is—you know, can be, essentially, a somewhat dead story, although not the personal stuff but the economic stuff, and it makes it just incredibly unputdownable in the best way, which is, as a fellow writer, a really annoying thing to have to admit to see somebody else do that kind of stuff. (Laughter.)

You open with the shock of Keynes’ friends at finding him in middle age or, you know, no longer young, finally falling in love and, horror of horrors, even more shocking, with a woman. Why did you begin with this and how does Keynes’ personal life, which is very much a part of this, play into the larger economic story?

CARTER: Why I started with it is a long question, and the answer to that, to be truthful, I had thought I was going to skip over the first thirty years of his life and for the most part I kind of do. I’d wanted to start the book with the financial crisis of 1914 because, for me, the defining moment of my professional political existence was the financial crisis of 2008 and I thought that would be a clear parallel for readers.

But I finished the book and I was, like, I need an introduction so something else has got to go here—(laughs). And I was trying to think about, you know, what made him—what made this guy who was, you know, a very conventional upper middle class, you know, British elite—I don’t use elite in a pejorative sense here. But, you know, fancy guy—

ROSE: Council on Foreign Relations. There is no such thing as a pejorative in this group. (Laughter.)

CARTER: Sure. Like, yeah, I want to make clear I’m not insulting anyone here. But it is the very conventional elite and how he went from someone who was a creature of the establishment and the existing order to someone who was challenging the foundations of that order intellectually and saying, you know, we really have to reject a lot of this if we’re going to keep the parts of it that we really cherish.

And it seemed to me like the real moment for that was after the war. Even through The Economic Consequences of the Peace, the book that makes Keynes famous, he’s still really talking about how to get the society from 1913 back.

But by the early 1920s, by 1922, 1923, there’s a turn in his writing and he’s starting to talk about how we might need to create a different kind of society, and he’s uncomfortable with that turn. He’s not quite—he hasn’t worked it all out yet, of course. That’s why The General Theory is the great work that comes fifteen years later. But there’s an awful lot that just happens to be going on in his life at this time. He’s famous for the first time. You know, he was a son of an academic for most of his life. But after The Economic Consequences of the Peace he’s probably the most famous intellectual in the world and famous in a way that intellectuals are just not famous anymore today.

I think it’s hard, at least for me as a thirty-eight-year-old now, to think of intellectual life of being something that could make somebody—I mean, when he was—when he got married, he was on the cover of Vogue magazine. I mean, he was an economist, for Christ’s sakes. (Laughter.) You know, they had photographers sending stuff in all over the world. Multiple continents were covering his wedding, and this was twelve years before The General Theory was written.

So there’s just an enormous number of things happening.

ROSE: Why? Explain to those who might not have read all this stuff for the background why was Keynes such a celebrity figure even that young?

CARTER: I think that’s a complex question. But the shortest answer is that he was a great writer. He was a really great writer and he could take economic ideas that were complex and abstract and difficult for ordinary people and make it accessible to them, and there weren’t a lot of economists who could do that at the time. There still aren’t today, and to some extent, the profession as it’s developed has really excluded people who are good at that from officialdom.

And so one of the characters who comes in later in the book is an economist named John Kenneth Galbraith, who was very, you know, fancy and popular in places like this. But at—among academic economists, there was a lot of sneering that the guy could write books that people actually bought and read and enjoyed, and Keynes did that, and he was engaged in public affairs on a daily, weekly basis so there were outlets for his work that weren’t just, you know, textbooks or academic journals.

But most of the time he was engaged with this community of very snobby but enormously creative artists. He’s just constantly surrounded by people who care about art and ideas, and the way they care about art is the way that economists care about economics, and you learn, when you go through the correspondence that Keynes has with these people, that that—those ideas about art and beauty and the truth, which sound very hippy dippy at a place like the Council on Foreign Relations, are absolutely central to what he thinks economics is for.

And so when he meets the love of his life and falls in love with her and realizes that this is what he has been seeking his entire life, this relationship here, this expression of himself, is something that maybe could be achievable by everyone, that could be a possibility for democracies everywhere.

That changes how he thinks we ought to manage society and what we think markets are good for, because if all markets can do is bring back 1913, by 1922, Keynes is saying that’s not good enough. I’m not in love with the most glorious ballerina—(laughs)—in Europe at this point—maybe not in Europe but, certainly, in Britain. And this was also a time, you know, when ballet was, you know, some combination of, like, you know, rock and roll and Monday night football. It’s just the most important, you know, popular artistic expression happening anywhere.

And so, to me, it just seemed very clear that this vision of the good life that he was realizing right there in this moment was something that he wanted to put into political practice and is what makes his work so seductive, in some ways, dangerous, but also full of promise.

ROSE: Individual and context. There’s a lot of ideas swirling around. There’s a lot of some of the elements that he builds on economics. If Keynes hadn’t existed, if he had gotten hit by a bus in ’22, how much of what we come to think—what we have come to think of as Keynesianism would have happened anyway?

CARTER: I think an awful lot. I think the version of Keynesianism that I was sort of introduced to in Econ 101 classes in college would have been materialized. I think, to a really important extent, the economists who were central in the Kennedy and Johnson administrations really play a bigger role in synthesizing the public idea of what Keynesianism is than Keynes himself. They pick and choose things from The General Theory, they apply it to a particular American context, and they strip away a lot of the stuff that, I think, is theoretically interesting, unfortunately.

But by doing that, they create a model that’s relatively simple with just a variable or two that they need to focus on that is really useful in Washington today. OK. Well, if you want to get full employment you want to want to, you know, hit this mark where aggregate demand is, you know, not causing inflation but getting everybody a job.

That’s the one thing you have to do, and if you do that you’ve succeeded your economic management job. And it turns out that’s a very tricky task, but it’s a fairly simple straightforward story and it’s really useful. And I think that would have come into play after the World War II experience one way or another.

People could see—no matter how they felt about Franklin Delano Roosevelt and the New Deal, they could see that the government spending an absolutely enormous amount of money in World War II did, in fact, put people to work and that the idea that this couldn’t be effective as an economic management strategy was just wrong.

But how to manage it, how to manage it, particularly, in a free society that was immediately engaged in Cold War rivalry with its former ally, the Soviet Union, you know, that was—I think that was going to be worked out by the needs of the Cold War.

What makes Keynes’ ideas so much more interesting, I think, is that there’s more to it than that mechanistic story and that set of tools that were very popular until the mid-1970s.

ROSE: What is the more?

CARTER: (Laughs.) Keynes is thinking about democracy. He’s always thinking about democracy, and he is particularly concerned with democracy’s ability to foster the artistic culture that he loved in the Bloomsbury community. He wants to live in a world that is full of theater and dance and novels and poetry and having your hair cut at two o’clock while Virginia Woolf’s sister opens a bottle of champagne.

He thinks that that is—that world where art can flourish is what not only economics but what civilization is for. He uses this word civilization in a kind of—there’s a sort of ritualistic quality to it when he talks about civilization—and he means this high art kind of elite culture. And he’s very concerned about authoritarians coming in and stamping it all out, that there will be no freedom of expression. There will be no joy in life, and he’s mostly concerned about the march of authoritarianism from the right early on.

He’s very concerned with a dictator arising in Europe after World War I. But he visits Soviet Russia in 1926 or so and his main takeaway is that they might actually be able to pull off this whole economic project but what a joyless society. Who wants to live here? It’s all paranoid and cruel and, you know, it just felt very—made his skin crawl in this way that—it wasn’t about money and numbers.

And I think economics is always in this bind where it needs to provide tools that are simple enough for policymakers to actually use and to put into practice, but to have any real meaning with people’s lives, to connect with what societies do and what they’re for, you can’t just give people a set of equations and tell them, OK, everything’s going to add up if you’d just get these numbers right.

That’s not how societies have ever been organized, and if you care about those things then you have to have stories to tell people, reasons for doing things to motivate people other than, you know, we’re going to have really excellent GDP when this is over. (Laughs.)

ROSE: This book goes on beyond Keynes to discuss the later efforts and some of his—you know, the later discussion about some of these things. What’s the fate of Keynes’ project after Keynes?

CARTER: It’s simultaneously glorious and dismal. I think—if you think of Keynes as someone who’s centrally concerned with the march of authoritarianism and maybe, secondarily, concerned with war, I mean, his project just completely fails. Not only does he not prevent a Second World War, he doesn’t prevent a Cold War that then rages for decades.

And, you know, the Cold War is cold in the United States but it’s hot in a lot of other places. A lot of people die, and part of his dream is that you can come up with this set of economic ideas, economic principles, that will make war and authoritarianism obsolete and unattractive. People won’t want it. They’ll like having a life of leisure and letters. That fails.

But the idea that governments can, in fact, manage outcomes for the society as a whole, that this is not a completely hopeless project and, in fact, it’s kind of necessary to the very idea of the state, I think that has survived. People are not always persuaded by it. But I think that has survived and it wasn’t obvious to—I don’t think it was obvious to people in 1919 that it would.

I mean, if you look at the kinds of states that are around at that period of time, the modern state as we know it did not really exist. It’s really a product of World War II and the type of management systems that are put into place by New Dealers who were obsessed with John Maynard Keynes.

ROSE: OK. That’s great. And let’s actually tie that back into the other two books we’ve been talking about. So the obverse of the question that I asked Peter and Susan, which is, OK, if James Baker, so recent a figure, seems so past it now, Keynes, so distantly past a figure, seems as contemporary as anything.

Did you feel, like, amazingly—did you feel weird writing about a century earlier and having it feel like you’re writing about today?

CARTER: Yes. But before I answer that in full I just want to state what a tremendous book Peter and Susan’s book is. I mean, it’s one of these things where the main character, really, is Washington even though it’s James Baker and it’s a biography of power and how it has changed and I just think it’s a really extraordinary achievement and congratulations to them and it’s really an honor to be, like, in the same room, even virtually, with them—(laughs)—for this work. I’ve been reading both of them for so long it’s, really, actually, like, genuinely, like, a serious personal, like, thing for me.

So, that said, what was the question? (Laughter.)

ROSE: Did it feel weird to—by the way, I—(inaudible)—on that kind of thing, about the different prize winners talking about each other. Steve Kotkin got a Stalin biography—one of the volumes got a second prize the same year that Piketty got the first prize—(laughter)—and he—Kotkin was—said when he got his Silver Medal he was—that Stalin would have been very upset that Marx got first and Stalin got second. (Laughter.) It was very, very good.

So the question is, writing about a century—

CARTER: Is that Stalin in that one or Marx? (Laughter.)

ROSE: Well, no. Again, they’re different—they’re different plays. The books—(inaudible). Writing about a century ago, Keynes seems remarkably contemporary. What would he think if he—would he just flop down like a fish in water now and feel this is all, like, very Keynesian and very familiar and—

CARTER: I think so. I mean, but he seemed—he had this unbelievable self-confidence that he could just plop that anywhere and be, like, oh, I’ve come up with seven new rules that will fix all of your problems, wherever he was. And often he knew what he was talking about but, like, often he didn’t.

There’s a great anecdote about his—one of his friends being out in the fields just enjoying the English countryside and they hear thunder in the distance. He says, Maynard, we’ve got to go inside. The thunder is coming. It’s way off in the distance but it’s getting closer. And he said, what are you talking about? Sound travels through the ether. It is instantaneous. We hear exactly—we only hear the storm when it’s here, and, of course, he’s completely wrong.

I mean, he has no idea what he’s talking about, and his poor friend is just this novelist who, like, is—nobody cares—like, no one thinks that this guy is a scientific genius about anything. So Keynes gets the whole house to be like, oh, yeah, sound travels through the ether. They all agree with him.

He had this magnetic force of personality that allowed him to fit in and sort of commandeer, to some extent, situations in ways that, you know, are not particularly—he was not a man who had a low opinion of himself or his abilities.

But, for me, I mean, I read—the reason I wrote the book is because I read The Economic Consequences of the Peace right after the financial crisis. I started trying to read The General Theory, and it’s—reading that book is kind of, like—it’s like eating a, you know, a thicket of, like, holly leaves or something. It’s just terrible.

But The Economic Consequences of the Peace is really a beautiful book and it all seemed very contemporary. As soon as you break into especially the parts of it where the narrative is really ripping, he’s talking about the prospect of authoritarian government coming and taking over because we’ve economically set everyone up to fail and, you know, in 2008 this feels like over here, guys, like—(laughs)—that all still feels frighteningly contemporary to me.

And when I started the book, I didn’t think that—we started—my wife and I started working on our book projects before the 2016 election was over and the election had really scared the hell out of me, at least. I think it scared the hell out of her, too. 2016 was a really unpleasant thing to cover as a journalist. It was just a relentless miserable grind, and it was mean. You could just—people were—people are always mean to journalists but it was—it got really, really nasty really quickly and it stayed that way. And I don’t think it stopped during the Trump presidency. I don’t know if it’s stopped now. I mean, I think about all the great editors who have had heart attacks in the last couple of years. I don’t think they’re just getting older. I think the job’s getting worse.

It seemed to me like that nastiness, that sense of dread, which is really palpable in a lot of Keynes’, unfortunately, his best work was in the air and that his ideas were going to be relevant so long as that sense of dread was hanging in the air, and I, unfortunately, don’t think we’ve gotten rid of it.

ROSE: I think that’s a great moment at which to turn to our Council members here in the room and virtually. So, Megan—oh, wait, let’s start with our first question from the floor here. Please, when you’re called on stand and state your name and affiliation and ask your question.

Who would like to kick us off? We can turn to our—who has their hand up online?

OPERATOR: We’ll take the first question from Carol O’Cleireacain.

Ms. O’Cleireacain, if you can accept the unmute now button, please.

At this time, there are no additional questions in the queue.

ROSE: Over here. Wait. Wait. You got a mic coming. OK.

Q: Alan Silberstein. Very distressing your comment about how sure he was of himself about the speed of sound. Makes me wonder why we should trust anything else he said.

CARTER: (Laughs.) Yeah, I think it’s an important question. You know, everybody has an area of expertise at which they are comfortable, respectable, reliable, and a lot of people who are really good at one thing think they’re great at a bunch of others, right. I mean, the number of times you see, you know, billionaires and other businessmen give advice on politics—what do they know? I mean, what does this have to do with running a car company?

You know, I think in Keynes’ case, you have to evaluate the ideas as they come. You know, he changes his mind a lot. The economic system that he’s talking about in The Economic Consequences of the Peace in 1919 is nothing at all like the economic system or the theoretical system that he has by 1923 and it’s nothing at all like the economic system he has by 1930 and it’s nothing like what we eventually call Keynesian economics coming out of his book in 1937.

So I think the short answer is you can’t trust everything that he has to say. Keynes himself doesn’t trust everything that he has to say about economics over the course of his life. He changes his ideas in response to political changes, I mean, and I think that’s a really important part of the story. You know, it’s not like he’s just some guy in a lab coat trying to figure out how the—you know, the proteins synthesize. He has a political goal that he’s trying to meet with his economic work. He’s trying to create a certain kind of society or to preserve a certain kind of society, and he has policy goals that he’s eventually trying to justify with his economic theory.

By, like, 1929 or so he becomes convinced that public works and large amounts of public spending are going to be necessary to end the Depression and so he kind of just puts together the general theory as, like, OK, how do I reverse engineer, you know, the theoretical justification for this policy that seems to be necessary? And if it weren’t a really great theoretical reverse engineering, I think we’d all, you know, laugh at the guy. But it’s a pretty compelling theory.

ROSE: There’s so much I could go into that but I’ve got too many people here. (Laughter.) We’re going to go online next, and then back here.

OPERATOR: We’ll take the next question from Rita Hauser.

Q: Thank you. I can’t tell you how much I enjoyed your book. Apart from the politics, the economics, which I knew well, I was astounded at what I learned about the Bloomsbury set and I would like to know how did you do the research on that aspect? Because some of the things that I learned about all of them and Keynes’ relationship to them was astounding to me.

CARTER: Well, I’m glad you picked up on the Bloomsbury set because I spent a lot of time reading about them and their writing can be—you know, so many of them are writers and so many of them are very, very good writers and they’re, certainly, not shy writers. I mean, this is a group of people who, like Keynes, you know, do not suffer from a lack of self-confidence and they all think that they have at least one memoir in them about what really happened with Bloomsbury.

And so the good news is, is there’s an enormous amount of firsthand material from people who were there that’s written very well and is actually very pleasant to read, often very funny. The drawback is that it often contradicts itself. You know, you have all these different people saying—giving different accounts of different things that happened. Sorting out who is reliable and who isn’t, you know, which stories are just too good to be true and which are too good not to be true, it’s—you know, it’s a tricky task.

But there just is a lot of primary source material, particularly from Virginia Woolf. I mean, there are very good collections of her letters, of her diaries, that are available that give you, you know, day-to-day detail on how she’s thinking about her friends and the world.

And that material is really useful for understanding Keynes’ frame of mind because for a very long time Virginia Woolf and Leonard Woolf are Keynes’ and his wife, Lydia’s, best friends, and so they see each other all the time and you can see when Virginia is starting to get snippy about something Keynes served at dinner. Maybe he should have had a bigger chicken or something that was roasted. You can see their relationship straining, and sometimes there’s an intellectual component to that. Their ideas are not totally in harmony and sometimes, you know, the chicken wasn’t any good. (Laughs.)

ROSE: Does that actually get into the economics or relate to the economics at all? Someone once talked about—I remember some homophobic critic talked about Keynes’ peculiarly childless vision. There were earlier theories that there was sort of, like, different—is the Bloomsbury experience related to Keynesian economics at all or is Keynes’ economics related to Bloomsbury, or is this just, gee, the guy was a big economist and he had a really interesting personal life that I want to talk about, too?

CARTER: You know, I don’t think he’s getting ideas about economic theory from Virginia Woolf. But I do think that the kind of life that they lived gets in there. Keynes just sort of takes for granted this kind of—I’ll say liberal but I mean, like, capital L liberal internationalism that his friends are doing.

I mean, when his artist friends get bored, they—you know, they go to Montparnasse and hang out with Picasso or Gertrude Stein. I mean, the idea that they feel like they’re part of this world that is bigger than just Britain, that they’re—you know, they’re fancy cosmopolitan elites, the people everybody loves now and—(laughs)—and he just takes for granted that that’s, like, something you would want and—for most of his life. And then after World War I, he’s, like, oh, we’re actually going to have to defend this as a good thing, and in order to defend it we’re going to have to democratize it because people aren’t going to stand for being excluded from these clubs. So, economically, we have got to make it possible that this stuff is available for everyone.

And at times, he’s surprised, you know, by how possible it is. I don’t think he really appreciates, like, what radio is going to do to appreciate—to people’s appreciation of, like, music and classical music. There’s a really great line from near the end of World War II where he’s saying, look at this, all these people who we said would never understand our brilliant music. It turns out if we just put it on the BBC they love this stuff. Isn’t that great? I mean, isn’t the world so much better than we thought it could possibly be? To me that’s clearly the influence of Bloomsbury. I don’t know if that gets directly into aggregate demand, but I think it’s shaping what he wants aggregate demand to do.

ROSE: In the room. Over here. Right here. We’ll go back there later.

Q: Hi. Nobu Ishizuka, Columbia Law School. Thank you for the very fascinating discussion. I’m wondering, based on that, whether the title should have been Money, Love, and the Life of John Maynard Keynes.

So against that backdrop, where you described so many fascinating details of sort of what drove his worldview, did you learn anything similar about Hayek? And did you see, in the rivalry, sort of some fundamental differences from that worldview, that appreciation of life in different ways, that may be a source of their differences?

CARTER: It’s really tricky. It’s a really tricky question because I think Hayek and Keynes are more similar. Over the course of the research, I came to think that they were much more similar than I had believed going in. Their economics are, like, totally different, so that is a significant caveat. But the sense that they’re both—they both see themselves sincerely, genuinely, as inheritors of this capital-L Liberal tradition, and they both believe that that tradition is something that absolutely has to be upheld no matter what, and that rather extreme things need to happen in order to save it.

You know, Keynes basically says we have to throw out all the economics that we’ve been teaching people for somewhere between fifty or one hundred years, depending on, you know, where he is in his own understanding of economic history. You know, Hayek at times—Hayek lives longer than Keynes does, so he’s—he ends up making political compromises I don’t think Keynes would have made; becoming more enthusiastic about dictators in Chile, for instance.

But I think the—there’s still a similarity there where they’re trying to—they believe that an economic system can be built that will insulate us from the worst extremes of our politics. It can take away the things that—unliberty, unfreedom, cruelty, and in Keynes’s case a real obsession with beauty and art, which I think Hayek does share that, though, to some extent. I mean, he’s a little bit more, like, unencumbered with his love of the Viennese—prewar Viennese aristocracy. But Keynes is really in love with sort of quasi-aristocratic prewar London too.

So they both are coming from—they’re recalling a certain golden age of empire, what’s golden age to them, and trying to erect economic systems that will preserve parts of that. And I think that’s kind of—to me that’s kind of central to the idea of liberalism itself. And the idea of the economy as a tool to preserve important parts of culture, I think, is largely lost from our economic discourse right now. And I’m much more critical of Hayek in the book than I am of Keynes. I think a lot of Hayek’s ideas went to places that—ultimately ended up being destructive for the things that he wanted to preserve.

But I do think you have to wrestle with the way that he saw these things, because it’s not—he’s a more conservative man than Keynes was, but they are—there are similarities that are very important. There’s a set of shared assumptions and goals about what the world can achieve that I don’t think the economics profession has really tried to pursue for the last thirty or so years in its expression in mainstream, you know, D.C. culture, public power. I mean, there’s always some economist who’s up to something really glorious and brilliant who will write me afterwards to say you’ve missed how great the economics profession is all along and congratulations to those people.

But I do think—I do think that struggle over the meaning of the liberal tradition is important today too. And I think it’s really important for the American left in particular. I spent a lot of time working at HuffPost. You know, not to think the liberal tradition exists purely in the mind of devotees of Friedrich Hayek or that, you know, liberalism is against art and beauty and truth and the things that—you know, I think Keynes’s artistic vision really is something that would animate a lot of young people today, and Keynes would have been appalled to hear all these young people saying they don’t like liberalism anymore. It would have made no sense to him.

ROSE: Meghan, we’ll go to the phones.

OPERATOR: We’ll take the next question from Malcolm Wiener.

Q: Thank you.

If at Bretton Woods Keynes’ ideas had triumphed rather than those of Harry Dexter White, what difference would it have made?

CARTER: That’s a very difficult question. In some sense, you know, I think the existence of capital controls, the flexibilities that are in the final accord, are very Keynesian, and Keynes would have been very happy with the world that was created within the Bretton Woods system. I think he would have seen the failure of Bretton Woods to stop the Cold War as a problem. I mean, if you really take Keynes at his most utopian, he thinks the right international economic system can prevent war. And so it doesn’t do that.

But within the Bretton Woods countries, there isn’t a lot of conflict. So there’s a sense in which the system does work for the people who are included, and maybe the problem is just the Soviet Union doesn’t sign on to the pact. You know, that’s one interpretation.

If Keynes gets everything that he wants and we have a new international regulator that’s not the United States, and countries that accrue, you know, large trade surpluses or large budget surpluses are forced to pay those out on a regular basis to countries that are accruing large deficits, I think it’s easy to see some of the problems of the last—you know, of the WTO era being mitigated. I don’t know if they would have been mitigated during the era of Bretton Woods. I don’t think the trade deficits really got totally crazy during that period.

But, you know, the era of long sustained trade deficits that we’ve seen right now, I mean, I think a lot of those ideas that Keynes was talking about, they make a lot of sense if—and are things that people should revisit if we ever get to a place where internationally we can talk about, you know, rebuilding a global international order out of whatever has happened to globalization over the last decade.

ROSE: Right here.

Q: Albert Knapp, NYU School of Medicine.

Speaking of globalization, what would Keynes have thought of that?

CARTER: Well, he would have liked the sort of moral ideal of it. You know, you go back to the 1990s and read all of the newspaper coverage of NAFTA and the WTO and GATT, you know, the best stuff—there’s a lot of Thomas Friedman work from that period where they sound like they’re in love with peace and art and togetherness, and the European Union and the United States are going to lead us all into this glorious future. And I think Keynes would have celebrated that ideal.

I have a hard time believing that Keynes would have been on board with free trade. And the amount of power that ended up being transferred from state governments and democracies to financial markets, I think, would have been alarming to him. I think that would have been—at least it would have been alarming to the Keynes of 1944, and I think the Keynes of 1935 as well; maybe the Keynes of 1929 too.

It's hard to say with him because he develops and he changes and he moves with the times. So if he’d lived to be 150, would he have become a neoliberal just in time for the triumph of neoliberalism, and then rejected neoliberalism just in time for its denouement in the 2008 financial crisis? He might have done that too. But at least the sort of late, mature Keynes who actually lived, his ideas were about how governments really needed to master financial markets; otherwise, financial markets were going to take down democracies.

So I think he would have been very uncomfortable with a lot of the ways that globalization was implemented in the 1990s. But I think he would have really cherished the ideal. So I—you know, it’s a complicated question or answer. He would not have said, no, don’t do globalization. But he would have said don’t do it this way, I think.

ROSE: To the phones.

OPERATOR: We’ll take the next question from Stanley Black.

ROSE: Stanley, are you muted?

OPERATOR: It looks like we’re having some difficulty with that line. We’ll take the next question from Oivind Lorentzen.

Q: Yeah. I actually—(audio break)—intellectualization, say, of—(audio break)—and as you see it as a link between the present and the future and the ideal of growing, progressing beyond money. And I’m curious where you think Keynes would have come out on cryptocurrency in that context.

CARTER: Cryptocurrency. I think—well, at least the way that—I don’t know if crypto enthusiasts still talk about crypto seriously as a currency anymore, because so much of the attention in that space has shifted to whether and how it’s going to be regulated as a sort of speculative investment.

But as an actual—as money going beyond the state, I think it would have been really horrifying to him. I mean, Keynes becomes very attached to the state theory of money in the 1920s, doing a lot of research on ancient societies and what money was. And in his treatise on money in 1930, he spends a lot of time saying what money is in a very inarticulate manner. But he basically says money is a creature of the state, that it’s a tool of statecraft that arises with government.

So the idea of money divorced from the state is confused. And this is during a period where he’s very interested in, you know, what we now call monetarism. And he thinks, well, maybe if we just master the art of money management, then all the problems with the economy that I’ve been worried about after World War I will go away, because the money is the one neat trick that fixes it all.

He matures beyond that view, but I think the idea that he would take this thing and leave it uncontrolled and uncoordinated would leave democracies vulnerable to all sorts of shocks and external shocks and things that you just don’t see coming happening. He talks a lot about uncertainty in particular. I think it’s the really theoretical key to the general theory.

What makes that whole book work is the idea that you don’t know what’s going to happen in the future, and neither does anybody else. (Laughs.) And sometimes you need a coordinating force to say, hey, this is how we’re going to direct things to make sure that we can all actually get this train moving together. And there’s some things that only the state can do. And if you don’t have state power over money, then you’ll have a lot of economic trouble eventually.

But, you know, again, in some of these places, you know, it depends on which corners of the internet you’re poking around in—I mean, there is a lot of kind of utopian Kum Ba Yah stuff happening in crypto world too. And I think he probably would have spent a lot of time trying to talk to those people about why the utopian Kum Ba Yah stuff is possible in a different—with a different set of tools and moving a different direction. He would not have wanted to lose the dreamers. He felt like they were really important. And if you didn’t have people who were thinking about new things and new ways of doing society, that society would stagnate.

ROSE: Would he have bet on it himself? Would he have enjoyed speculating on bitcoin and that kind of stuff? Get some wine money?

CARTER: He loved to gamble. I mean, and he was mostly very good at it. He had a couple of—(laughs)—really catastrophic shocks where, you know, in the 1920s he almost goes completely broke, loses everything from his massive book sales, and has to get bailed out by, you know, a banker with a lot of money. And then he makes everybody rich again.

I don’t know if he would have speculated on it because he would have thought it was too random. He liked speculating on currencies because he was, like, all right, we’re going to see there’s a trade balance-of-payments mismatch, and I’m the smart guy who’s figured it out. So it’s not only going to make a lot of money. I’m going to be smart at the same time and it’s going to be great.

And the crypto stuff is sort of like, well, I guess today people are really into bitcoin and tomorrow they’re into ethereum or whatever. It’s harder. By definition there are no fundamentals. So I think he wouldn’t have enjoyed it as much, but he might have—I’m sure he would have done it at least a little. I mean, he would occasionally bet on, like, horseraces and stuff. He was—he had a line somewhere about gambling where he says, like, a little bit of gambling is good for everybody. It’s very good to wake up in the morning with the sense that, you know, almost anything is possible or the world is full of possibilities. And a little bit of gambling—the thought that he might get fabulously rich, he thought, was healthy.

ROSE: On that point, because we’re coming to the end of our time here—and one of the things the Council does religiously is close on time, and we have some cocktails later for people who want to continue the conversation, which I hope everybody will do. So you close the book on that exact point—I like the point about you’re saying gambling—in which down with those who—this is Keynes in 1903, at twenty-one—down with those who declare we are dumped and damned. Away with all schemes of redemption and retaliation. A better future was not beyond our control, Keynes felt, if the peoples—different peoples of the world worked together, leading one another to prosperity.

And so this question, you know, of being optimistic—and you closed the book by saying in the long run we’re all dead, but it’s in the short run—in the long run we’re all dead, but in the long run almost anything is possible. Is the takeaway from your book that Keynes, as a sort of demiurge intellectually of the intersection of money and society, shows us the possibilities that exist in the merger of capitalism and democracy that have not been fully exploited yet and that he would urge us to find those possibilities down the road?

CARTER: I really wish I had said that when I was pitching this to publishers in 2017. I think that’s a great—(laughs)—a great summation of why I wrote this book at the time that I did. I mean, I don’t know if that’s—I haven’t read every single Keynes biography, so I’m not going to—and the ones that I have have been extraordinary. So, like, I don’t have anything negative to say about the other scholars who’ve been in this space working very hard for years.

But I do feel like that sense of possibility is missing from a lot of—from economics and from most of the writing about economists. And, you know, not everything that he put out there is a good idea, as we discussed earlier. But he does show an enormous world of possibilities that we haven’t really explored. We’ve just scratched the surface.

ROSE: And we have just scratched the surface on this wonderful book in this discussion. With that, let me award this year’s Gold Medal for the Arthur Ross Book Award to Zachary Carter for The Price of Peace. (Applause.)

With that we conclude and go to the drinks.


Top Stories on CFR


The new defense treaty demonstrates a growing closeness between the two pariah states that is likely to make the rest of the world uneasy.


Election 2024

Each Friday, I look at what the presidential contenders are saying about foreign policy. This Week: The United States may come to rue its failure to get its fiscal house in order.