September 14, 2009


Keynes, John Maynard, The General Theory of Employment, Interest and Money (1936) (New York: Palgrave Macmillan, 1973, 2007 (From Paul Krugman's "Introduction to New Edition": "As an intellectual achievement, The General Theory ranks with only a handful of other works in economics--the tiny set of books that transformed our perception of the world, so that once people became aware of what those books had to say they saw everything differently. Adam Smith did that in The Wealth of Nation: suddenly the economy was not just a collection of people getting and spending, it was a self-regulating system in which each individual 'is led by an invisible hand to promote an end which was no part of his intention.' The General Theory is in the same league: suddenly the idea that mass unemployment is the result of inadequate demand, long a fringe heresy, became completely comprehensible, indeed obvious." "What makes The General Theory truly unique, however, is that it combined towering intellectual achievement with immediate practical relevance to a global economic crisis.... Until The General Theory, sensible people regarded mass unemployment as a problem with complex causes, and no easy solution other than the replacement of markets with government control. Keynes showed that the opposite was true: mass unemployment had a simple cause, inadequate demand, and an easy solution, expansionary fiscal policy." Id. at xxxvii.).

Meltzer, Allan H., Keynes’s Monetary Theory: A Different Interpretation (Cambridge: Cambridge U. Press, 1988) ("Keynes's basic beliefs have a large influence on the problems he considered and the way he addressed them. In the philosophy that he learned from G. E. Moore and shared with many of his closest associates, the highest good came from states of mind--contemplation, beauty, truth, and love. Pecuniary motives were at a much lower level and the pursuit of wealth or money unattractive. This broad view of the purposes of life was joined by two others. One was the values learned as a child--the so-called presuppositions of Harvey Road--under which persuasion by an intellectual elite was to be the means of improving mankind. The duty of the intellectual elite, in this view, was to lead public opinion and shape society's rules by discussion within the elite of civil servants, intellectuals, and molder of opinion and by changing public opinion. The other influence was once again Moore, who taught that there were no fixed definitions of food and evil. "Good" depended on the circumstance in which an issue was to be decided." Id. at 59.).