I think a lot of people who are familiar with Keynes know that he harbored some anti-semitic views, although some people are still surprised when they hear this (here, here - HT Bob Murphy). Recently, this statement of his has gotten some coverage:
"[Jews] have in them deep-rooted instincts that are antagonistic and therefore repulsive to the European, and their presence among us is a living example of the insurmountable difficulties that exist in merging race characteristics, in making cats love dogs …
It is not agreeable to see civilization so under the ugly thumbs of its impure Jews who have all the money and the power and brains."
The fuller context of that passage is even stranger, because it starts by complimenting the intellect and contributions of several Jewish friends and acquaintances of Keynes (including Einstein) in Germany. Complimenting the intellect and contributions after, of course, first insulting Einstein. It's an extremely odd read.
Keynes's anti-semitism is always tied to the idea of the love of money. Early in his life, he talked about that as a Jewish legacy in Europe, and an obstacle to living the good life. Later in his life, most prominently in the General Theory, but also in Economic Possibilities for Our Grandchildren, it's clearly not presented as a Jewish problem, but a much broader human problem.
Keynes was also in support of eugenics. I don't know as much about his specific views on eugenics (except that he ascribed to Malthusianism and was worried about overpopulation), but as far as I know he did not make any connections at all between anti-semitism and eugenics. This is an important point. He held some terrible prejudices against Jews, but then he also held terrible prejudices against Russians, Americans, and probably many other groups. But as far as I know it was prejudice and never a view that there was any kind of inhuman quality to any of the groups he didn't like. Very, very early on in the Nazi regime he called their crimes against the Jews barbaric and emphatically opposed them. In Economic Consequences of the Peace, Keynes mocked Poland's backwardness citing specifically its abuse of its Jews. And at the time of the peace conference, Keynes was closely involved with a committee promoting Zionism and the establishment of a Jewish state.
Keynes was clearly an anti-semite. There's no question of this at all. Maybe he lost some of it later in life? That would be nice, but I just don't know. He doesn't seem to reference Jews at all in the General Theory on precisely the issues that he prominently associated with them earlier (the desire to acquire money), so maybe he did grow out of it. I think a lot of people grew out of anti-semitism over the course of the 1930s. Over the last year I've been reading through H.P. Lovecraft's letters from 1929 to 1937, and he makes a fascinating transition out of anti-semitism during this period for two reasons: seeing how ugly anti-semitism was in continental Europe, and recognizing that the broad economic troubles couldn't be placed at the feet of Jews. I would say - whether he grew out of it or not - as far as I can tell Keynes never had anything more than prejudices. He never thought Jews were criminal or inhuman in any way that necessitated action against them. He just didn't like them and had some nasty ideas about them.
Jonathan Catalan discusses all this here. He writes:
"Maybe now Brad Delong, et. al., can be a little bit more sympathetic to Ron Paul. Well, I am not asking for sympathy — rather, I ask Brad DeLong, et. al., attack the actually relevant aspects of Paul’s philosophy (the philosophy he is bound to act on as president of the United States)."
I'm still not quite sure this cuts it. First, there's a big difference between anti-semites before and after the 1930s, just like there's a big difference between racists before and after the 1860s and certainly before and after the 1960s. Jefferson associated with racists but I'm pretty sure he was genuine about liberty and democracy and all that. Ron Paul associated with racists, and I really have to wonder what's going on in his head. The 1990s are not the 1790s. That's not saying Jefferson was right, of course - he certainly wasn't. It's simply to speak to Jonathan's point about "relevant aspects" of philosophy and policy. Jefferson's racism is probably mostly irrelevant to his philosophy because it was the 1790s and it wasn't exactly a viewpoint that people could be differentiated on. Anyone associating with racists today is much different.
Anyway - I don't want to open up the Ron Paul thing again, but I don't think the historical context was completely irrelevant. If Ron Paul associated with these sorts of people in his college days you probably wouldn't even hear me talk about (and although I think most people now are of the same mind on the point of whether Ron Paul wrote them, and a lot of people agree with me that Ron Paul is not a racist, his willingness to associate with racism should be crystal clear from the 1996 interviews).