The General Theory of Employment, Interest, and Money

Distinguished British economist John Maynard Keynes (1883-1946) set off a series of movements that drastically altered the ways in which economists view the world. In his most important work, The General Theory of Employment, Interest, and Money (1936), Keynes critiqued the laissez-faire policies of his day, particularly the proposition that a normally functioning market economy would bring full employment. Keynes's forward-looking work transformed economics from merely a descriptive and analytic discipline into one that is policy oriented. For Keynes, enlightened government intervention in a nation's economic life was essential to curbing what he saw as the inherent inequalities and instabilities of unregulated capitalism.

ISBN-13: 9781573921398

Media Type: Paperback

Publisher: Prometheus Books

Publication Date: 05-01-1997

Pages: 423

Product Dimensions: 5.50(w) x 8.50(h) x (d)

Series: Great Minds

John Maynard Keynes was born in Cambridge, England, on July 5, 1883. His father, John Neville Keynes, was a professor and administrator at Cambridge University and himself the author of The Scope and Methods of Political Economy. After attending Eton (1897-1902), Keynes entered King's College, where he studied economics. Following graduation, he worked in the India Office (1906-1908); lectured on economics at Cambridge (1908); was made a fellow of King's College (1909), editor of the Economic Journal, and secretary of the Royal Economic Society (1911); and accepted a position in the British treasury. In 1919 Keynes was principal representative of the treasury at the Paris Peace Conference. Disturbed by developments at the conference, however, he soon resigned. His Economic Consequences of the Peace (1919) gave voice to his strong objection to the punitive measures being enacted against Germany. In this eloquently argued and strangely prescient work, Keynes detailed the problems that would result from the war reparations to be made by conquered Germany beyond her ability to pay, as well as the devastating economic, social, and political consequences of continuing European ultranationalism. Keynes returned to England to resume teaching at Cambridge (1920-37), during which time he gave the Sidney Ball Lecture that was published as the pamphlet The End of Laissez-Faire (1926) and wrote his main work, The General Theory of Employment, Interest, and Money (1935-36). Critiquing the neoclassical theory of Alfred Marshall, namely, that a normally functioning market economy leads to full employment, Keynes showed that a market economy can operate at less than full employment and that it may even work against reducing unemployment. Keynes advocated enlightened governmental intervention over unregulated laissez-faire policies. The Keynesian analysis of how monetary and financial arrangements affect the economy has formed the basis of subsequent activist governmental fiscal and monetary policy. Heart trouble ended Keynes's academic career in 1937. However, he remained active as an adviser to the chancellor of the exchequer (1940) and as principal British delegate and negotiator at the Bretton Woods Conference (1944), Stage II of Lend Lease (1944), arrangements for a United States loan to Britain (1945), and the inauguration of the International Monetary Fund and the International Bank (1946). In 1942, he was raised to the peerage, being named 1st Baron Keynes of Tilton. John Maynard Keynes died in Firle, Sussex, on April 21, 1946. Keynes's other published works include A Revision of the Treaty (1922), A Tract on Monetary Reform (1923), A Treatise on Money (1930), and How to Pay for the War (1940).

Table of Contents

Preface by John Maynard Keynes

Preface to the German Edition

Preface to the Japanese Edition

Preface to the French Edition

Introduction by Paul Krugman

Book I Introduction

1 The General Theory

2 The Postulates of the Classical Eco

3 The Principle of Effective Demand

Book II Definitions and Ideas

4 The Choice of Units

5 Expectation as Determining Output and Employment.

6 The Definition of Income, Saving and Investment.

7 The Meaning of Saving and Investment Further Considered

Book III The Propensity to Consume

8 The Propensity to Consume: I. The Objective Factors

9 The Propensity to Consume: II. The Subjective Factors

10 The Marginal Propensity to Consume and the Multiplier

Book IV The Inducement to Invest

11 The Marginal Efficiency of Capital

12 The State of Long-Term Expectation

13 The General Theory of the Rate of Interest

14 The Classical Theory of the Rate of Interest

15 The Psychological and Business Incentives to Liquidity

16 Sundry Observations on the Nature of Capital

17 The Essential Properties of Interest and Money

18 The General Theory of Employment Re-Stated

Book V Money-wages and Prices

19 Changes in Money-wages

20 The Employment Function

21 The Theory of Prices.- Book VI Short Notes Suggested by the General Theory

22 Notes on the Trade Cycle

23 Notes on Mercantilism, The Usury Laws, Stamped Money and Theories Of Under-Consumption

24 Concluding Notes on the Social Philosophy Towards which the General Theory Might Lead

Afterword by Robert Skidelsky

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