What would Keynes think of Brexit?

John Maynard Keynes would have been conflicted by the referendum. Culture pulled him towards Europe; politics and especially the continent’s current austerity economics would have pushed him increasingly away.

Churchill talked about the “three majestic circles” of the Commonwealth, the United States and Europe. But over Keynes’s lifetime, the reality was that Britain was firmly locked into only two of them: the special relationship with the US, and its own imperial preference system. Keynes resented Britain’s dependence on America and he never saw imperial preference other than as a bargaining chip, but he did not see Europe as replacing either of them.

Like Churchill, Keynes supported the idea of some sort of European Union to avert another war. He looked forward to a European federation of independent states forming an economic and currency unit. But the point was he did not see Britain as part of it.

Would he have later endorsed Harold Macmillan’s original application for membership of the European Economic Community in 1962 and the terms eventually negotiated by Edward Heath in 1972? Possibly. But there is nothing in his own history to suggest that he would have accepted unconditionally the four freedoms of capital, goods, services and labour—which after the Maastricht Treaty in 1992 came to define the European project. Indeed, he envisaged capital controls as a necessary and permanent part of the international monetary system.

And he would certainly have wanted to keep Britain out of the eurozone. Because, above all, he would have wanted to retain the commitment to full employment. If this was not possible at the European level, and he would have doubted if there was enough theoretical and institutional support for this, then national policy must be free to secure it.

So Keynes would have been on the cusp: the problem, as in the early 1930s, was that the right kind of people had the wrong ideas, and the wrong kind of people at least some of the right ideas. And today Europe has yet to produce someone of the stature of Franklin D Roosevelt, capable of bridging the divide.

Robert Skidelsky is the author of “Keynes: The Return of the Master” (Penguin, 2010) and more recently, “Keynes: Economist, Philosopher, Statesman” (Penguin, 2013)