John Maynard Keynes and the Importance of Changing Your Mind

John Maynard Keynes was eminently quotable. For an economist, he had an amazing flair with words, and most days you will find one of his bon mots appearing in some newspaper article or other. One of his most famous sayings, though, may not have been said by him at all:

“When the facts change, I change my mind.”

Numerous articles have been written on whether he did or did not say this, or what version he might have said. I prefer one of the versions that economist Paul Samuelson (who may be the original source) attributes to him: “When my information changes, I change my mind,” because after all, it is not the facts themselves that are generally changing, but what we know of them.

Whether or not Keynes originated the quote, it makes sense because it fits his approach to the world. Keynes was never afraid to change his mind — sometimes to the intense annoyance of contemporaries, who recall him changing stance even mid conversation. Samuelson relates a joke that if the British Parliament asked six economists for an opinion on any subject, they always got seven answers — two from John Maynard Keynes.

Most people, including and perhaps sometimes especially, the clever and educated, are afraid to change their minds — to admit they might have been wrong. Perhaps it was the widespread acknowledgment of his intellect (Bertrand Russell once said that when he debated with Keynes he “took my life in my hands”) coupled with a strong pinch of arrogance and self belief that meant Keynes was not afraid of being seen to be wrong. Having spent his entire career holding others to account, and rarely holding back in eviscerating their foolishness, he did not fear looking foolish himself.

This was not just intellectual playfulness. It went to the core of his work and being. Consider Free Trade, one of the foundation stones of liberalism — and Keynes was an active member of the Liberal Party. Free Trade not only had a long political history, it was also central to orthodox economic theory — going back to the ideas of Adam Smith and David Ricardo — and was absolutely sacrosanct for most of Keynes’ fellow economists. But Keynes was prepared to abandon even this. In the early 1930s, he horrified colleagues by advocating for a degree of protectionism, and suggested that a nation’s goods should be where possible “homespun”. He had betrayed his tribe — or so they thought — but when Oswald Mosley, the founder of the British Union of Fascists, wrote congratulating Keynes on his about-turn, Keynes gave him short shrift. He had changed tack “not to embrace you, but to save the country from you”. For Keynes, abandoning Free Trade was the logical response to the problems Britain faced: devastatingly high unemployment combined with an exchange rate which had fixed sterling at a punitive rate against the dollar. It was a creative solution to a problem, not the endorsing of an ideology.

This flexibility extended to other values and beliefs. Maynard was a member of the Bloomsbury Group, with their supposedly liberated ideas on personal morality. The values that marked his early life came under profound reconsideration in a Memoir he wrote for his Bloomsbury friends On My Early Beliefs. Keynes recognised that the values that Bloomsbury had embraced — throwing out Victorian morality and religion and advocating personal and artistic freedom — had to some extent been delusional, or at least, had contained serious flaws. He and they had failed to see that “civilisation was a thin and precarious crust erected by the personality and the will of a very few, and only maintained by rules and conventions”. Despite his agnosticism, he detected a new value in religion. He said in a conversation related by Virginia Woolf, “I begin to see that our generation … owed a great deal to our fathers’ religion … We had the best of both worlds.” This was in 1934, when amidst the disasters of the Great Depression, he detected in the young a willingness to turn to political extremism and authoritarian ideologies that disturbed him. His openness to “changing his mind” and embracing new possibilities was most marked by his relationship with Lydia Lopokova — a devoted, passionate, lasting relationship with a woman, after an early life of enthusiastic affairs with men. It astonished (and displeased) his friends, just as much as some of his other about-turns had astonished and displeased his colleagues.

Keynes was generous enough to accept change in others too. He famously attacked Lloyd George in his bestselling Economic Consequences of the Peace for his decisions at the Paris Peace Conference, but worked closely with him in the late 1920s, trying to find an answer to unemployment. He wrote a scathing pamphlet about Winston Churchill (The Economic Consequences of Mr Churchill) blaming Churchill for the disasters that followed on his decision to put Britain back on the gold standard, contrary to Keynes’ advice, but neither men held a grudge: Keynes accepted an invitation to join Churchill’s dining club, and Churchill later said that not following Keynes’ advice had been the biggest regret of his career. Perhaps more remarkably, Keynes was able to forgive those who proved him wrong. He had spent years of his early life slaving away at his Treatise on Probability, which he believed was a major breakthrough — the young philosopher and genius, Frank Ramsey, demolished its core assumptions in one article. Keynes’ response was to help find Ramsey a job, treat him as a treasured friend and colleague, and mourn sincerely his early passing (“the greatest genius … and the dearest creature”). Later, when the younger economist Hayek positioned himself as Keynes’ adversary, Keynes was also generous, writing to him with much warm praise for his book The Road to Serfdom. Even where he did not change his mind — and Keynes and Hayek were to leave very different intellectual legacies — he was alert that there might be value and common ground in the work of an opponent.

More than seventy years after Keynes’ death — and in a new age which is sometimes painfully reminiscent of the 1920s and 30s — I think we could also be more willing, when the facts change, to change our minds. Sometimes, faced with issues from Brexit to mask-wearing, Scottish independence to sexual politics, the evidence has begun to feel almost irrelevant, and the possibility of changing one’s mind to resemble abandoning one side for the other in a religious war. I know I hesitate before committing an opinion to the page — or even voicing it, for being afraid of being held to it, and condemned for it, forever. The rise of identity politics puts the very existence of “facts” or evidence into doubt, compared to the perspective of the group. In this tribal world, politics takes on a dangerously moral dimension — dangerous, in that it is very easy to denigrate the motives of the opponent, and to see that opponent as inevitably an enemy. Changing one’s mind becomes heresy, rather than a flexible, creative and fluid response to a changing situation and new challenges. We need to be able to change our minds.

In another of his famous quotes, John Maynard Keynes remarked that “In the long run we are all dead”. It was an observation that he intended to apply to economic theory. It is also worth remembering though that in the great scheme of things, the world will not end if we say the wrong thing, make a mistake or even admit that we have changed our mind.

E.J. Barnes is the author of Mr Keynes’ Revolution.

Find out more at www.EJBarnesAuthor.com