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John Maynard Keynes was the sexiest economist who ever lived. This might seem like half-hearted praise since in our mind's eye the typical economist appears as a dowdy and almost always balding man, full of prudential advice about thrift and the miracle of compound interest. Keynes, with his caterpillar moustache and mesmerizing bedroom eyes, cut a more dashing figure.

He had many lovers of both genders, and was married to one of the great beauties of the age, the ballerina Lydia Lopokova. His genius at playing the stock market allowed him to enjoy the life of bon vivant, socializing with the writers and artists of the Bloomsbury group such as Virginia Woolf and E.M. Forster rather than dull number crunchers he knew at Cambridge and in the British Treasury. While other economists focused on maximizing economic growth, Keynes wanted to go further and maximize the pleasures of life.

Given all this, it's perhaps not surprising that a much-publicized recent attack on the Keynesian policy of using government deficits to overcome economic recession resorted to homophobia to discredit it. Last Friday, in a question and answer session following his lecture, Harvard historian Niall Ferguson startled his audience at the Altegris Strategic Investment Conference in California by calling Keynes a childless gay man who couldn't give his wife conjugal satisfaction and had no concern for the impact of deficits on posterity.

A storm of criticism followed, and in an effort to salvage his reputation, Ferguson-a vocal critic of both President Obama's mild stimulus policies and the more ambitious Keynesianism of economists like Paul Krugman-quickly and comprehensively apologized, saying his original remarks were "stupid as they were insensitive" and "disagreements with Keynes's economic philosophy have never had anything to do with his sexual orientation." Ferguson's gaffe came in the wake of the recent news that an influential 2010 study by his Harvard colleagues Carmen Reinhart and Kenneth Rogoff, which had seemed to show a hard threshold beyond which deficits hampered economic growth, turned out to depend heavily on an Excel spread sheet error as well as other elementary methodological flaws. While austerity's advocates have enjoyed an inexplicable ascendancy in the political world since the beginning of the current great recession, the scrutiny of Ferguson as well as Reinhart and Rogoff has put deficit hawks on the intellectual defensive.

Ferguson's repudiation of his original homophobic comments should be commended. But Ferguson has a history of making jibes about Keynes's sexuality. University of Michigan economist Justin Wolfers called attention to the fact that in Ferguson's 1999 book The Pity of War, Keynes is described as being depressed by World War I, in part, because "the boys he liked to pick up in London all joined up." Later in the same book, Ferguson toys with the idea that Keynes may have been influenced to become a harsh critic of the Treaty of Versailles by an attraction to the German negotiator Carl Melchior. (It's embarrassing to have to refute arrant nonsense with facts and logic, but Keynes was likely depressed by the war because he didn't like pointless mass slaughter, while his Treaty of Versailles critique was vindicated by the post-war political and economic chaos he predicted).

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But there is something deeper and weirder going on here. Homophobic slurs against Keynes, it turns out, have a long pedigree. As both Berkeley economist Brad DeLong and the Washington Monthly's Kathleen Geier have documented, the attempt to dismiss Keynes as someone heedless about the future because he was a childless gay man has been a staple of conservative thought for nearly seven decades.

The accusation was first made by the brilliant Harvard economist Joseph Schumpeter, who in a 1946 obituary complained that Keynes "was childless and his philosophy of life was essentially a short-run philosophy." The words of Schumpeter-still remembered for his contention that capitalism rests on "creative destruction," and a conservative who thought intellectuals such as Keynes were undermining the moral foundation of the free market-have been echoed by many other thinkers, including George Will, Gerturde Himmelfarb, Greg Mankiw, Mark Steyn, and V.S. Naipaul. (Himmelfarb argues that Keynes's famous statement "In the long run we are all dead" has "an obvious connection with his homosexuality," while Mark Steyn described the economist as a "childless homosexual" and "libertine." Harvard economist Greg Mankiw also used the word "childless" to describe Keynes, raising the question, what's wrong with Harvard?)

The Schumpeter claim has had a surprisingly robust life despite the fact that it is both biographically wrong and logically absurd. Keynes was not childless by choice. He and Lydia Lopokova wanted to have a larger family, but failed due to a heart-breaking miscarriage. Moreover, childless people of any sexual orientation are more than capable of caring about the future of the species. Would we want to dismiss such famous non-parents as Immanuel Kant, Jane Austen, Emily Dickinson, and Beethoven, not to mention Christ, of being exclusively focused on the present moment?

Still, the best response to Schumpeter and Ferguson may be to rethink-and re-argue-the link between sex and economics. We can reject the homophobia but take up the question they raise: What is the connection between Keynes the great lover and Keynes the great economist? To answer it, we have to acknowledge that economics is not a morally neutral science but rather is intimately connected with questions about what we want from life , including the type of sex we want to have.

Historically, attempts to prohibit sodomy (defined broadly as non-procreative sex) have had an economic dimension as well as a moral one. Economics, for the ancient Greeks, was household management (oikonomia being the Greek counterpart to our word husbandry). While the pre-Christian Greeks didn't have any notion that homosexuality was sinful, they did develop the idea there was a tension between sodomy and the procreative goal that they saw governing proper household management.

By remembering how the Greeks saw economics, we can make sense of the curious argument made by Aristotle-that usury was similar to unnatural sex, a case of money being generated by interaction with an outside party rather than the growth of a household through the fruitful union of husband and wife. In the Politics, Aristotle argues,

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"There are two sorts of wealth-getting, as I have said; one is a part of household management, the other is retail trade: the former necessary and honorable, while that which consists in exchange is justly censured; for it is unnatural, and a mode by which men gain from one another. The most hated sort, and with the greatest reason, is usury, which makes a gain out of money itself, and not from the natural object of it. For money was intended to be used in exchange, but not to increase at interest. And this term interest, which means the birth of money from money, is applied to the breeding of money because the offspring resembles the parent. Wherefore of any modes of getting wealth this is the most unnatural."

Aristotle's linkage of non-procreative sex with usury profoundly influenced Christian thinkers. Thomas Aquinas, whose Summa Theologica codified the fusion of Aristotle with Christianity, argued that sodomy and usury were both "sins against nature, in which the very order of nature is violated, an injury done to God himself, who sets nature in order." Echoing Aquinas, Dante placed sodomites and usurers in the same circle of Hell in the Divine Comedy. In his 1935 tract "Social Credit," Ezra Pound, whose obsession with crackpot economics took him down many historical byways, argued that "usury and sodomy, the Church condemned as a pair, to one hell, the same for one reason, namely that they are both against natural increase."

There is a flipside to this tradition of seeing sodomy as the enemy of the natural economy of the household: The counter-tradition of liberal economics founded by Adam Smith challenged the household model by seeing economics as rooted in the free trade of goods between households and nations. Precisely because Smith was more receptive to previously condemned or taboo economic activities like trade and manufacturing, he was also more open to sexual liberalism.

Smith's friend Alexander Dalrymple is now thought to have written an anonymous tract, Thoughts of an Old Man (1800), recalling that the founder of modern economics believed that "sodomy was a thing in itself indifferent"-a radical thing to say even in private at a time when sodomy was a capital offence, condemned by church and state. Interestingly, Smith was more reluctant to challenge the traditional prejudice against usury, although his students would conclude that the normalization of usury was the rational outcome of Smithian economics.

Smith's new and somewhat inchoate ideas were pushed further by Bentham, who in an unpublished essay observed that sodomy "produces no pain in anyone" but "on the contrary it produces pleasure." Pain and pleasure were key categories for Bentham as he developed the philosophy of utilitarianism, which argued a new goal for society: "it is the greatest happiness of the greatest number that is the measure of right and wrong."

It's no accident that in 1787 Bentham wrote a "Defence of Usury," which tried to convince Adam Smith to take a more benevolent view of the hitherto morally sanctioned economic activity. On the subject of both usury and sodomy, Bentham's inclination was to take Smith's liberal impulses to their logical end. Bentham was in favour of consensual adult acts (be they sexual or economic) that led to greater happiness, whether they violated pre-existing taboos or not.

Although Keynes would revise the classical liberal tradition in many ways, he shared Bentham's aversion to unnecessary pain. In his essay "My Early Beliefs," Keynes put forward his core creed: "The appropriate subjects of passionate contemplation and communion were a beloved person, beauty and truth, and one's prime objects in life were love, the creation and enjoyment of aesthetic experience and the pursuit of knowledge. Of these, love came a long way first."

The primacy Keynes gave to love is the key to understanding his greatness as an economist and moral figure. Valuing love as he did, Keynes was willing to ignore or overturn traditional creeds that, to his mind, inflicted unnecessary suffering whether it be the prohibition against homosexuality or the use of austerity as a solution to economic crises.

If Keynes's economic vision is intertwined with his larger views on sex and love, meanwhile, the same is surely true of the many strands of pro-austerity thinking that oppose Keynesianism. Schumpeter was fundamentally a nostalgist who longed for a return to the heroic days of bourgeois family capitalism, a world he knew was irrevocably lost. No wonder Schumpeter was so unsettled by Keynes, a man at home with both modern economics and modern sexuality.

As Mark Blyth has shown in his new book Austerity: The History of a Dangerous Idea, the power of arguments for austerity come from the fact that they invoke the traditional moral system of the West, a way of thinking that is rarely questioned because it seems like common sense. Implicit in austerity are all sorts of moral adages: no pain, no gain; suffering builds character; thrift is virtue.

Keynes was able to see through the fallacy of austerity because he didn't think traditional moral strictures should be uncritically accepted. Rather, he wanted to test these strictures by their consequences. If we follow Keynes's example, we can use the same critical intelligence that has overturned the prejudice against homosexuality and start challenging the orthodoxy of austerity. No wonder Keynes remains a threatening figure for conservative economists and moralists alike.