Interpreting the General Theory
One of the great problems in discussing the content of the General Theory is
that, being a highly complex, controversial and influential book, it has enabled
economists of widely different persuasions to find statements within it which
support their own vision of Keynes’s essential message. The Keynesiology
literature, already vast, continues to grow exponentially! The diverse range of
views is a source of confusion and enlightenment. E. Roy Weintraub (1979),
for example, has a chapter entitled ‘The 4,827th re-examination of Keynes’s
system’! To get some idea of the contrasting theoretical interpretations of the
General Theory the reader should consult Hicks (1937), Modigliani (1944,
2003), Klein (1947), Patinkin (1956, 1976, 1990b), Leijonhufvud (1968),
Davidson (1978, 1994), Chick (1983), Coddington (1983), Kahn (1984) and
Meltzer (1988). The papers collected in the edited volumes by Cunningham
Wood (1983) give some idea of the critiques and developments which emerged
after 1936. To understand the development of Keynes’s contributions in the
wider context of his life and philosophy, the reader should consult the excellent
biographies of Keynes by Harrod (1951), Moggridge (1992) and Skidelsky
(1983, 1992 and 2000). The Collected Writings of John Maynard Keynes,
edited by Donald Moggridge, runs to 30 volumes!
There is no definitive interpretation of Keynes which commands universal
support; nor could there ever be, given the non-mathematical style of the
book. The turbulence Keynes has caused in economics continues and the
General Theory remains a text which is ‘not yet fully mined’ (Phelps, 1990;
see also Akerlof’s Nobel Memorial Lecture, 2002). One of the reasons for
this is that the very issue with which Keynes was concerned, namely the
effectiveness of market forces in generating a stable full employment equilibrium
without active government intervention, is still at the centre of economic
debate (the same issue relating to government v. market failure lies at the
heart of controversy elsewhere in economics – see Snowdon, 2001b).
Bill Gerrard (1991) attempts to analyse the reasons why different interpretations
occur. These include confusions generated by Keynes himself due to
‘technical incompetence’, ‘stylistic difficulties’, ‘inconsistencies’ and ‘mistakes’.
Other possible sources of confusion are ‘reader-generated’ and result
from ‘selective reading’, ‘inappropriate framing’ and ‘reliance on secondary
sources’. A further problem arises in the sheer quantity of material which
Keynes produced in addition to the General Theory; for example, some
contributors have shifted emphasis towards Keynes’s earlier and neglected
philosophical papers (O’Donnell, 1989). Gerrard concludes that the achievement
of Keynes’s General Theory is mainly in ‘its ability to generate a
diversity of research programmes’ reflecting a number of possible ways of
looking at the macroeconomy. In short, Gerrard suggests that we should stop
worrying about multiple interpretations, since this confirms the fertility of
Keynes’s work and its ‘reference power’.
Since we cannot hope to do justice to the wide variety of interpretations of
Keynes, here we will present a conventional account of some of the main
arguments associated with the General Theory.
One of the great problems in discussing the content of the General Theory is
that, being a highly complex, controversial and influential book, it has enabled
economists of widely different persuasions to find statements within it which
support their own vision of Keynes’s essential message. The Keynesiology
literature, already vast, continues to grow exponentially! The diverse range of
views is a source of confusion and enlightenment. E. Roy Weintraub (1979),
for example, has a chapter entitled ‘The 4,827th re-examination of Keynes’s
system’! To get some idea of the contrasting theoretical interpretations of the
General Theory the reader should consult Hicks (1937), Modigliani (1944,
2003), Klein (1947), Patinkin (1956, 1976, 1990b), Leijonhufvud (1968),
Davidson (1978, 1994), Chick (1983), Coddington (1983), Kahn (1984) and
Meltzer (1988). The papers collected in the edited volumes by Cunningham
Wood (1983) give some idea of the critiques and developments which emerged
after 1936. To understand the development of Keynes’s contributions in the
wider context of his life and philosophy, the reader should consult the excellent
biographies of Keynes by Harrod (1951), Moggridge (1992) and Skidelsky
(1983, 1992 and 2000). The Collected Writings of John Maynard Keynes,
edited by Donald Moggridge, runs to 30 volumes!
There is no definitive interpretation of Keynes which commands universal
support; nor could there ever be, given the non-mathematical style of the
book. The turbulence Keynes has caused in economics continues and the
General Theory remains a text which is ‘not yet fully mined’ (Phelps, 1990;
see also Akerlof’s Nobel Memorial Lecture, 2002). One of the reasons for
this is that the very issue with which Keynes was concerned, namely the
effectiveness of market forces in generating a stable full employment equilibrium
without active government intervention, is still at the centre of economic
debate (the same issue relating to government v. market failure lies at the
heart of controversy elsewhere in economics – see Snowdon, 2001b).
Bill Gerrard (1991) attempts to analyse the reasons why different interpretations
occur. These include confusions generated by Keynes himself due to
‘technical incompetence’, ‘stylistic difficulties’, ‘inconsistencies’ and ‘mistakes’.
Other possible sources of confusion are ‘reader-generated’ and result
from ‘selective reading’, ‘inappropriate framing’ and ‘reliance on secondary
sources’. A further problem arises in the sheer quantity of material which
Keynes produced in addition to the General Theory; for example, some
contributors have shifted emphasis towards Keynes’s earlier and neglected
philosophical papers (O’Donnell, 1989). Gerrard concludes that the achievement
of Keynes’s General Theory is mainly in ‘its ability to generate a
diversity of research programmes’ reflecting a number of possible ways of
looking at the macroeconomy. In short, Gerrard suggests that we should stop
worrying about multiple interpretations, since this confirms the fertility of
Keynes’s work and its ‘reference power’.
Since we cannot hope to do justice to the wide variety of interpretations of
Keynes, here we will present a conventional account of some of the main
arguments associated with the General Theory.
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