Keynesianism--Retrospect and Prospect: A Critical Restatement of Basic Economic Principles

Keynesianism--Retrospect and Prospect: A Critical Restatement of Basic Economic Principles

Keynesianism--Retrospect and Prospect: A Critical Restatement of Basic Economic Principles

Keynesianism--Retrospect and Prospect: A Critical Restatement of Basic Economic Principles

Excerpt

This work is put forward as a positive contribution to economics. It sets out to re-state some of the essentials of "orthodox" or "classical" economic teachings in a form which is intended to be more appropriate for contemporary controversies.

To do this effectively, it is necessary simultaneously to expose the erroneous foundations on which Keynesian economics has been based. Such a task cannot be lightly attempted. The economic theory which has been founded on Keynes' speculations may be said, not unfairly, to constitute the economics which is expounded in most modern textbooks.

I have been concerned professionally mainly with the application of economic theory and particularly as it is relevant to the functions of the business decision-maker. It is, perhaps, largely because I have seen the problems at issue from the standpoint of those whose predictions and actions make the economic system work that I have become dissatisfied with Keynesian and post-Keynesian economics. But I admit to writing with the disadvantage of one whom Keynes would have described (I use his words) as having been somewhat "perverted by having read too much of the orthodox stuff." I might be accused of never having thrown off my prejudices against the Keynesian teachings. And yet I regard myself as one who has not succumbed to the pressure to follow the current mode. In this contribution I shall be explaining why I find myself out of fashion.

In common with many others, I spent much time between 1936 and the outbreak of the war trying to understand Keynes' message. One of the first results of this was the writing of my Theory of Idle Resources, published in 1939. Side by side with this contribution, there was another typescript which never reached the stage of publication. Some parts of this were read by London friends during the winter of 1938-9. Had the war not intervened, the developing typescript (which soon . . .

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