According to a blistering report in Financial Advisor magazine, Harvard History Professor Niall Ferguson dismissed the economic philosophy of John Maynard Keynes because Keynes was gay and had no children. As reported by Financial Advisor, Ferguson criticized Keynes for discounting long-term economic concerns in his economic theories because he did not have children of his own (and, implicitly, no regard for future generations). Keynes is the most famous advocate for increasing government borrowing and spending to limit the damage done by downturns in the economy. Ferguson spoke before a crowd of over 500 at the Altegris Conference in Carlsbad, California; two online reports from attendees at the conference confirm the thrust of Ferguson's criticism. Ferguson's remarks appear to be based on several misunderstandings of Keynes' biography and stated views.
Ferguson to McCulley: Keynes didn't care about the long-run 'cause he was a homosexual, had no children. #AltegrisSIC2013— Dan Jamieson (@dvjamieson) May 2, 2013
An excerpt from Lance Roberts' post at StreetTalkLive.com reporting a question from former PIMCO banker Paul McCulley (in bold) and Robertson's notes on Ferguson's response (its not clear whether these notes are verbatim or paraphrased):
Question By Paul McCulley
"The long run is a misleading guide to current affairs…in the long run we are all dead."
Are we in a liquidity trap, are we at a zero bound of interest rates and stuck at 8% unemployment?
[Ferguson:] Keynes was a homosexual and had no intention of having children. We are NOT dead in the long run…our children are our progeny. It is the economic ideals of Keynes that have gotten us into the problems of today. Short term fixes, with a neglect of the long run, leads to the continuous cycles of booms and busts. Economies that pursue such short term solutions have always suffered not only decline, but destruction, in the long run.
Several details of Ferguson's remarks that were included in the Financial Advisor story have not been confirmed by other sources. For example, Financial Advisor reported that Ferguson asked his audience how many children Keynes had and "explained that Keynes had none because he was a homosexual and was married to a ballerina, with whom he likely talked of "poetry" rather than procreated." Other sources have not reported that rhetorical question or the additional disparaging remarks in Ferguson's answer to it. No full transcript or video of Ferguson's remarks has yet emerged.
Keynes' personal life and sexuality are complicated subjects. During his 20s and early 30s, Keynes kept a diary of his sexual affairs with a number of men at Eton and Cambridge. In 1925, at age 42, Keynes married a Russian ballerina named Lydia Lopokova; she became pregnant in 1927, but miscarried. Keynes and Lopokova remained married until his death in 1946. (Virginia Woolf, a friend of Keynes and his wife, based the character Lucrezia Warren Smith in Mrs. Dalloway on Lopokova. Woolf's character--an foreign-born outcast in the London society she inhabits--deeply loves her husband Septimus but struggles alone with his mental illness.)
Ultimately, Ferguson's bigoted criticism may have been prompted by a misunderstanding of Keynes' views. The Keynes quotation in McCulley's question that Ferguson reacted to is a foreshortening of a longer statement:
"But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if, in tempestuous seasons, they can only tell us that when the storm is long past the ocean is flat again."
As Henry Blodget of Business Insider writes, "Keynes was in no way suggesting that the future doesn't matter. Rather, when this remark is read in context, it is clear that Keynes was chiding economists for ducking responsibility for their own lousy short-term predictions."
UPDATE (1:30 p.m.): This afternoon, Niall Ferguson apologized for his statements on his blog:
"I had been asked to comment on Keynes's famous observation "In the long run we are all dead." The point I had made in my presentation was that in the long run our children, grandchildren and great-grandchildren are alive, and will have to deal with the consequences of our economic actions.
But I should not have suggested – in an off-the-cuff response that was not part of my presentation – that Keynes was indifferent to the long run because he had no children, nor that he had no children because he was gay. This was doubly stupid. First, it is obvious that people who do not have children also care about future generations. Second, I had forgotten that Keynes's wife Lydia miscarried.
My disagreements with Keynes's economic philosophy have never had anything to do with his sexual orientation. It is simply false to suggest, as I did, that his approach to economic policy was inspired by any aspect of his personal life. As those who know me and my work are well aware, I detest all prejudice, sexual or otherwise.
My colleagues, students, and friends – straight and gay – have every right to be disappointed in me, as I am in myself. To them, and to everyone who heard my remarks at the conference or has read them since, I deeply and unreservedly apologize.
(h/t Matt Zeitlin)