Volume 4, Number 5 · April 8, 1965
Revaluations II: Keynes's General Theory
By Robert Lekachman
The General Theory of Employment, Interest and Money
by John Maynard Keynes
Harcourt Brace & World, 607 pp., $2.95 (paper)
Like many economic classics, the General Theory of Employment, Interest and Money, published in early 1936, is an ill-organized, repetitious, and quarrelsome book. Save for occasional bravura passages on Egyptian pyramids, medieval masses for the dead, and the behavior of stock market speculators, the graceful English stylist of the Economic Consequences of the Peace and the Essays in Biography is little in evidence. On key issues Keynes was frequently either obscure or mistaken. Later theoretical discussion disproved the conception, in the General Theory, of the multiplier, the savings-investment identity, and the determination of the rate of interest. Even good Keynesians have completely discarded such novelties of the master as user cost and wage units. Shortly after it was published, gifted and orderly theorists like Oskar Lange and J. E. Meade constructed systematic mathematical models of Keynes's theory, far superior in analytic rigor to the original. Later, Roy Harrod in England and Evsey Domar in this country shifted the interest of the profession from Keynes's central problem, the determination of national income under static short-run conditions, to the new issue of economic growth. The econometric fraternity has enjoyed the game of creating formidable systems of economic equations, suitable for the moderately accurate forecasting of what happened a year or two earlier. The version of Keynesian doctrine to be found in Samuelson's Economics or Ackley's more advanced Macroeconomic Theory has about the same relation to the General Theory as the Department of Commerce's national income estimates bear to the Physiocrats' Tableau Economique. In short, noneconomists don't read the General Theory because they can't and economists don't read it because it is hopelessly behind the times, all but pre-Keynesian.
Review, 993 words
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