Defeating the dark forces of ignorance: boosting economics in Cambridge
When John Maynard Keynes wrote that ‘the social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future,’ he could have been talking about philanthropy, and in particular the philanthropy of Bill and Weslie Janeway.
The Janeways have a long history of philanthropic support for Cambridge, as well as giving their time and expertise. They both worked on Wall Street, although Weslie retrained as a geneticist, and therefore know a lot about skilled investment. Equally, they have both devoted much of their lives to defeating the dark forces of ignorance in their respective fields and through their philanthropy. Together they founded the Cambridge Endowment for Research in Finance and the Keynes Fellowships in Finance. Bill is an Affiliated Faculty member of the Economics Faculty and a Manager of the Cambridge-INET Institute, partially funded by the Institute for New Economic Thinking of which he is a co-founder. Weslie and Bill are Companions of the University of Cambridge Guild of Benefactors, and Weslie is a sabbatical visitor in the Laboratory for Regenerative Medicine.
Economic and financial decisions: inextricably linked
The Keynes quote has particular resonance for Bill (Pembroke 1965), who first arrived in Cambridge 50 years ago to study for his PhD under the supervision of Richard Kahn, Keynes’ leading student. He only half-jokingly describes himself as a ‘paleo-Keynsian’ and outlines how his career as both a venture capitalist and an academic have been informed by the three key lessons he learned at Cambridge:
First, economic and financial decisions are made in conditions of extreme uncertainty, even ignorance of what the consequences of those decisions will be. Second, even when they’re trying to do the best they can people often make things worse, producing what economists call coordination failure. Third, economics and finance are inextricably linked. What goes on in the financial markets, in stocks and shares, and in the credit system affects what goes on the in the ‘real economy’ of production and employment, savings and investment: these are not separate domains.
Bill’s PhD subject was the formulation of economic policy in the British Labour Government of 1929–1931. This was the period in which Ramsay Macdonald’s government failed to make any coherent response to the Great Crash of 1929 that deepened the extended 'slump' in British employment between the World Wars.
Shortly after Bill left Cambridge, Keynesian economics fell out of fashion, and finance and economics became regarded as separate disciplines. Few people saw the crash of 2008 coming, but Bill, who played a key role in the development of the internet economy, was one of the few. When the global financial crisis generated the Great Recession, the critical interdependence of economics and finance was dramatised for all to see. It is no coincidence that, simultaneously, policy makers like Gordon Brown and Barack Obama discovered the relevance of Keynes’ economics. This in part explains the Janeways’ latest gift to Cambridge: the Janeway Professorship of Financial Economics, with a linked Fellowship to Pembroke College, and the Janeway Fund for Economics.
Bringing economics and finance back together
The Professorship will reunite the teaching and research of finance and economics, with the Fellowship contributing to the vital Cambridge practice of College teaching and the fund supporting fundamental research in economics. Thus, the donation will contribute to understanding how an increasingly complicated and inter-connected financial economy works in order to influence the formulation of economic and financial policy for the better. The gift is explicitly made to support the continued revitalisation of the Faculty of Economics, which is emerging as a world-leader in post-2008 economic thinking, research and teaching.
Recent economic crises have heralded a new era of change, raising questions about received economic wisdom and approaches to teaching and research. This represents a tremendous opportunity for the Faculty of Economics and the extraordinary philanthropic gift of Bill and Weslie Janeway is especially timely and positions us ideally to lead a response.
Bill explains that he and Weslie invest in Cambridge for a number of reasons: it is a combination of Cambridge’s genuine and demonstrable impact on the world, the opportunity to support brilliant young students and scholars plus, in his case, the motivation of ‘giving something back’ to a place that changed his life. Whatever their motivation, the net return of their investment in Cambridge is a decisive blow against Keynes’ ‘dark forces of time and ignorance.’
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