Abstract
Robertson continued to defend his belief in the forced saving doctrine throughout the Keynesian Revolution and into his Cambridge Lectures in the late 1940s and 1950s. In Lectures he dropped the terminology of lacking and reverted to the Marshallian term ‘waiting’ but still employed the argument of imposed lacking.1 It is now possible therefore to visualise the Robertsonian approach to saving in the cycle which he held from the time of Banking (i.e. 1926) onwards. It will be instructive, in addition, to compare his approach with that of Pigou and Hayek; these were the two eminent Robertsonian contemporaries, pre-General Theory writers, who utilised the forced saving doctrine in their theories of fluctuation.2 Again it cannot be emphasised too greatly that Robertson always examined saving in a dynamic setting as part of cycle theory and this goes some way towards explaining why he was later critical of Keynes’ attempt to ‘deal with the savings-investment complex in terms of a theory of static and stable equilibrium’.3
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Saving in the Cycle
DHR ‘Industrial Fluctuation and the Natural Rate of Interest’, EJ, (December 1934) pp. 650–656, see especially p. 653.
G. Cassel, Theory of Social Economy, Vol. 2, (London: Fisher Unwin Ltd., 1923) p. 594.
A. C. Pigou, Industrial Fluctuation, (London: Macmillan, 1927) and
F. von Hayek, Monetary Theory of the Trade Cycle, and Prices and Production, (London: Routledge & Sons, 1935). It would be unfair to omit the name of Lionel Robbins who recognised the Forced Saving Thesis, possibly under the influence of the work of Hayek.
Also A. MacFie, Theories of the Trade Cycle, (London: Macmillan, 1934) followed Robertson’s views on forced and voluntary saving, see especially chapter VI.
F. von Hayek, ‘A Note on the Development of the Doctrine of “Forced Saving”’, QJE, Vol. 47, (1932–3) pp. 123–133.
F. von Hayek, Monetary Theory of the Trade Cycle, (1932 ed.) pp. 218–20. One possible explanation of this is that he is assuming that productivity is increasing. If prices are stable, those members of the workforce on fixed money incomes are unable to share in the increased production by increasing their consumption; they are thus forced to save.
J. R. Hicks, Critical Essays in Monetary Theory, (Oxford: Clarendon Press, 1967) Ch. 5, Ch. 12.
F. von Hayek, Profit, Interest and Investment, Collection of Essays (London: Routledge & Sons, 1939) see especially pp. 3–71.
See especially G. N. Halm, Monetary Theory, (Toronto: Blakiston Co., 1942) Ch. 20 and G. Haberler, op cit., Ch. 13. It is not within the scope of this thesis to examine the validity of the ‘Ricardo effect’, but in general economists have been unimpressed by its application to cycle theory.
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© 1978 John R. Presley
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Presley, J.R. (1978). Saving in the Cycle. In: Robertsonian Economics. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-03239-6_12
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DOI: https://doi.org/10.1007/978-1-349-03239-6_12
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