Abstract
Keynes’s interpreters have never questioned his extraordinary ability to face up to the complex and at times dramatic problems of his time. On many occasions however the analysis proposed in the General Theory has been considered as having no relation to the vision of capitalism which emerges from his earlier, fundamental works. This has created considerable and, in some instances, insuperable difficulties, both in understanding Keynes’s message (the theory) and in the analysis of the functioning of the economic system (the method).
But style is not a careful composition of coherent substances. Often it is an impossible mixture, an absurd craving. … Talent is not a guarantee but a risk. It’s like a friend who takes you up to a cross-roads without a single road-sign and says: ‘all you have to do now is find your way home from here’.
(Vespignani)
A previous draft of this paper benefited from useful criticism from Professors M. Amendola, A. Asimakopulos, M. Draghi, C. Gnesutta, J. Kregel, G. Martinengo, G. Nardozzi, A. Roncaglia, S. Parrinello and P. Sylos Labini. Responsibility for any weaknesses or mistakes present in the text is mine alone.
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Notes
As far as the content of Keynes’s message is concerned see my own Keynes: the Instability of Capitalism (Macmillan, 1984).
‘An economy is in equilibrium when it generates messages which do not cause agents to change the theories which they hold or the policies they pursue’ (F. Hahn, On the Notion of Equilibrium in Economics. An Inaugural Lecture (Cambridge University Press, 1973) p. 25.
See in particular, J. R. Hicks, ‘IS-LM: an Explanation’, in J. R. Hicks, Money, Interest and Wages, Collected Essays in Economic Theory, vol. II (Oxford: Basil Blackwell, 1982).
J. Tobin, ‘A General Equilibrium Approach to Monetary Theory’ in Journal of Money, Credit and Banking, February 1969.
J. M. Keynes, Treatise on Probability, 1921, in Collected Writings of J. M. Keynes (CWK), vol. VIII, pp. 6–7.
On this line see E. R. Weintraub, ‘The 4,827th reexamination of Keynes’s system’, ch. 3. Microfoundations (Cambridge University Press, 1979).
J. R. Hicks, ‘Mr Keynes’s Theory of Employment’, Economic Journal, June 1936, in Collected Essays, op. cit.
See J. A. Kregel, ‘Microfoundations and Hicksian Monetary Theory,’ in de Economist, vol. 130, no. 4, 1982.
See in particular P. Garegnani, ‘On a Change in the Notion of Equilibrium in Recent Work on Value: a Comment on Samuelson’ in M. Brown, K. Sato and P. Zarembka (eds) Essays in Modern Capital Theory (Amsterdam: North Holland, 1976).
J. R. Hicks, ‘Mr Keynes and the ‘Classics’: a Suggested Interpretation’, in Econometrica, January 1937, and J. R. Hicks, ‘IS-LM. An Explanation’, op. cit.
See in particular, J. R. Hicks, The Crisis in Keynesian Economics (Oxford: Basil Blackwell, 1974)
and J. R. Hicks, Casuality in Economics (Oxford: Basil Blackwell, 1979).
See J. R. Hicks, Capital and Growth (Oxford University Press, 1965).
That Keynes’s method of expectations has nothing to do with the analysis of the Swedish school has been argued very lucidly by J. A. Kregel in ‘Economic Methodology in the Face of Uncertainty: the Modelling Methods of Keynes and the Post-Keynesians’, Economic Journal, June 1976.
See on this point S. Parrinello, ‘The price level implicit in Keynes’s effective demand’, Journal of Post-Keynesian Economics, Autumn 1980
and C. Casarosa, ‘The microfoundations of Keynes’s Aggregate Supply and Expected Demand Analysis’, Economic Journal, March 1981.
See F. Hahn ‘On Non-Walrasian Equilibria’, in Review of Economic Studies, February 1978.
There is an interesting discussion of this point in A. Vercelli, ‘Equilibrio e disequilibrio nella Teoria Generale di Keynes: il ruolo dei salari monetari e le difficoltà di un metodo di puro equilibrio’ in A. Graziani, C. Imbriani, B. Jossa (eds), Studi diEconomia Keynesiana, (Naples: Liguori 1981).
P. Sraffa, ‘Dr Hayek on Money and Capital’, Economic Journal, March 1932.
F. Modigliani, ‘Liquidity Preference and the Theory of Interest and Money’ Econometrica, 1944.
For a critique of this approach see C. Gnesutta, ‘Equilibrio del conto capitale e meccanismo di trasmissione degli impulsi monetari’ in F. Vicarelli (ed), La Controversia Keynesiana (Bologna: Il Mulino, 1974).
See M. Morishima, Walras’ Economics (Cambridge University Press, 1977).
Here it is sufficient to recall the pioneering works of Don Patinkin, Money, Interest and Prices, New York: Harper, 1965
R. W. Clower, ‘The Keynesian Counter-Revolution’ in F. H. Hahn and F. Brechling (eds) The Theory of Interest Rates (London: Macmillan, 1965)
R. J. Barro and H. I. Grossman, ‘A General Disequilibrium Model of Income and Employment’, American Economic Review, March 1971.
See J. Tobin ‘Asset Accumulation and Economic Activity’ (Basil Blackwell, Oxford: 1980).
G. L. S. Shackle, ‘New Tracks in Economic Thought, 1926–1939’ in S. Weintraub (ed.) Modern Economic Thought, (University of Pennsylvania Press, 1977).
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Vicarelli, F. (1985). From Equilibrium to Probability: a Reinterpretation of the Method of the General Theory. In: Vicarelli, F. (eds) Keynes’s Relevance Today. Keynesian Studies. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17834-6_8
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