Comment on My 1936 Review of Keynes’ General Theory [1963]

Abstract

My 1936 review of keynes’ General Theory, here revived from the dead, no doubt had limitations of which I was then unaware and continue to be unaware. It also had, however, some deliberate limitations which were imposed on it by the circumstances of its publication. It was written as part of a symposium under the editorship of Professor Taussig. He encouraged me to include in my contribution a paragraph or two appraising the importance and quality of the book as a whole, but asked me aside from this to concentrate on a discussion of Keynes’ theory of the causes of changes in the volume of employment. I interpreted Keynes’ theory as in fact, whatever its intent, a theory only of the short-run determinants in changes in employment, and kept my comments within that limited framework. I consequently refrained from any attempt to assess the contribution of the General Theory to policy formulation, or to long-run analysis, or its serviceability as a foundation for long-run forecasting. I would not have denied that it contained, or probably contained, materials which could be profitably embodied, perhaps after appropriate adaptation, in long-run theorizing, but I would have conceded that I had only hazy notions of how that task could be performed and that its performance would require new insights and the invention of new analytical tools.