Gillian Tett’s diary: How Keynes saw the crisis coming

The psychological journey that the great economist travelled feels uncannily familiar

January 24, 2024
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A few weeks ago, I was perusing the archives of King’s College, Cambridge, where I recently became the 45th provost, when I spotted a missive that gave me chills. It was written by John Maynard Keynes, the economist and former King’s fellow. 

The letter, dated 5th June 1919, was addressed to the prime minister and announced that Keynes had resigned from negotiations to create an Allied plan for Europe after the First World War. Keynes feared that efforts to impose retribution on Germany would create more hatred on the continent and future war.

“I am slipping away from this scene of nightmare,” he penned in spidery writing on notepaper stamped by the “British Delegation, Paris”. “I can do no more good.” Or as he told his mother, in another letter: “I’ve been utterly worn out… by depression at the evil around me.” 

Today, just over a century later, the psychological journey that Keynes travelled, prompting his “depression”, feels uncannily familiar.

Before 1914, as Keynes noted in The Economic Consequences of the Peace, most of the western elite assumed that globalisation, free-market capitalism and innovation were good—and unstoppable. They were used to a world where “the inhabitant of London could order by telephone, sipping his morning tea in bed, the various products of the whole earth, in such quantity as he might see fit, and reasonably expect their early delivery upon his doorstep”—and all before 1914. Of course, Keynes added, the benefits of this “economic Eldorado” were uneven: it was the elites who enjoyed most of the fruits of globalisation. However, those elites were also so blind to the building tensions that they believed globalisation would continue indefinitely—until the First World War suddenly erupted, unleashing protectionism, populism, nationalism and worse.

So, too, today. Until 2008, most western elites (including me) assumed that globalisation, free-market capitalism, democracy and innovation were good—and unstoppable. Yes, we might have sneered when Francis Fukuyama said we were living through “the end of history”; but we thought that history was going in a straight line—towards progress.

Now, however, history is going into reverse, as I found at January’s World Economic Forum in Davos, the ultimate expression of elite sentiment and globalisation. The WEF’s annual survey of risks was its most depressed and alarmed on record. As in 1919, Davosians fear they now live in a world of war, social upheaval, protectionism and populism. 

These woes are of the elite’s own making, as yet again the fruits of globalisation have been unequally distributed. Hence the power of populist (quasi-fascist) politicians such as Donald Trump, the putative Republican presidential candidate.

However, the key question for me, as I ponder those Keynes letters, is what happens next: another world war? Economic depression? A new cycle of hatred as the victors of current wars demand retribution? Or might we learn from history and fight for a more humane and inclusive globalised world? Let us hope so—and tell politicians to reread Keynes’s missives.


Meanwhile, I have been pondering another feature of King’s, a few steps from our archives: a brand new 3.7 metre tall futuristic tower of blocks of Corten steel created by the British sculptor Antony Gormley to honour Alan Turing, also a former King’s fellow.

In some senses, it seems odd that King’s has not honoured Turing with a sculpture before: this was a man, after all, who changed the course of the Second World War with his codebreaking—and pioneered artificial intelligence.

But the timing of this installation is perfect—now more than ever governments, businesses and economists need to ponder the implications of AI as it spreads unfettered across the world. 

In Davos there was oodles of enthusiasm about this. And while regulators are alarmed about the misuse of AI, governments are finally attempting to exert more oversight. The United Nations has now persuaded both Washington and Beijing to back incipient collaborative oversight mechanisms, to at least talk about how to prevent the tech spinning out of control. Hooray. 

However, if you step outside Davos—or Silicon Valley—the mood is less upbeat: a survey from the Edelman Public Relations group suggests only 30 per cent of people want to embrace AI, while 35 per cent reject it, partly because too few trust the government or media to tell the truth about new technologies. Ouch. 

The good news is that public trust in scientists remains high. But the bad news is that it is no longer academic scientists who dominate development. In Turing’s day, publicly funded bodies such as universities or the military shaped research; now the cutting-edge debates are happening inside secretive Big Tech groups.

This needs to change, if tech is going to win more public trust—and calm the fears expressed in that WEF risks survey (which echo what Keynes wrote 100 years ago). In the meantime, I will be quietly saluting that Turing statue when I see it each morning—as a sign of both how the world can go right, and badly wrong.