§ Quotes [ edit ]

The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.

• It is generally agreed that casinos should, in the public interest, be inaccessible and expensive. And perhaps the same is true of Stock Exchanges.

• Book 4, Chapter 12, Section 6, p. 159

• Americans are apt to be unduly interested in discovering what average opinion believes average opinion to be; and this national weakness finds its nemesis in the stock market.

• Book 4, Chapter 12, Section 6, p. 159

• The introduction of a substantial Government transfer tax on all transactions might prove the most serviceable reform available, with a view to mitigating the predominance of speculation in the United States.

• Book 4, Chapter 12, Section 6, p. 160 (Tobin Tax ?)

• The social object of skilled investment should be to defeat the dark forces of time and ignorance which envelope our future.

• Book 4, Chapter 12, Section 5, p. 155

• I expect to see the State, which is in a position to calculate the marginal efficiency of capital goods on long views and on the basis of the general social advantage, taking an ever greater responsibility for directly organising investment ;

• Book 4, Chapter 12, Section 8, p. 164

• To dig holes in the ground , paid for out of savings, will increase, not only employment, but the real national dividend of useful goods and services. It is not reasonable, however, that a sensible community should be content to remain dependent on such fortuitous and often wasteful mitigations when once we understand the influences upon which effective demand depends.

• Book 4, Chapter 16, Section 3, p. 220

• If I am right in supposing it to be comparatively easy to make capital-goods so abundant that the marginal efficiency of capital is zero, this may be the most sensible way of gradually getting rid of many of the objectionable features of capitalism.

• Book 4, Chapter 16, Section 4, p. 221

• Thus those reformers, who look for a remedy by creating artificial carrying-costs for the money through the device of requiring legal-tender currency to be periodically stamped at a prescribed cost in order to retain its quality as money, or in analogous ways, have been on the right track; and the practical value of their proposals deserves consideration.

• Book 4, Chapter 17, Section 3, p. 234

• We are, as I have said, one equation short.

• Book 5, Appendix to Chapter 19, p. 276

• For the importance of money essentially flows from its being a link between the present and the future.

• Book 5, Chapter 21, Section 1, p. 293

• Too large a proportion of recent mathematical economics are mere concoctions, as imprecise as the initial assumptions they rest on, which allow the author to lose sight of the complexities and interdependencies of the real world in a maze of pretentious and unhelpful symbols.

• Book 5, Chapter 21,Section 3, p. 298

• Once doubt begins it spreads rapidly.

• Book 6, Chapter 22, Section 2, p. 317

• We reach a condition where there is a shortage of houses, but where nevertheless no one can afford to live in the houses that there are.

• Book 6, Chapter 22, Section 3, p. 322

• The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semi-slump; but in abolishing slumps and thus keeping us permanently in a quasi-boom.

• Book 6, Chapter 22, Section 3, p. 322

• I am myself impressed by the great social advantages of increasing the stock of capital until it ceases to be scarce.

• Book 6, Chapter 22, Section 4, p. 325

• Thus, the weight of my criticism is directed against the inadequacy of the theoretical foundations of the laissez-faire doctrine upon which I was brought up and for many years I taught;

• Book 6, Chapter 23, Section 2, p. 339

• Never in history was there a method devised of such efficacy for setting each country’s advantage at variance with its neighbours’ as the international gold (or, formerly, silver) standard.

• Book 6, Chapter 23, Section 3, p. 349

• The destruction of the inducement to invest by an excessive liquidity-preference was the outstanding evil, the prime impediment to the growth of wealth, in the ancient and medieval worlds.

• Book 6, Chapter 23, Section 5, p. 351

• I believe that the future will learn more from the spirit of Gesell than from that of Marx.

• Book 6, Chapter 23, Section 6, p. 355

• The idea behind stamped money is sound.

• Book 6, Chapter 23, Section 5, p. 357

• The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes.

• Book 6, Chapter 24, Section 1, p. 372

• It is better that a man should tyrannise over his bank balance than over his fellow-citizens and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative.

• Ch. 24 Concluding Notes p. 374

• But whilst there may be intrinsic reasons for the scarcity of land, there are no intrinsic reasons for the scarcity of capital.

• Book 6, Chapter 24, Section 2, p. 376

• The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggerated compared with the gradual encroachment of ideas. Not, indeed, immediately, but after a certain interval; for in the field of economic and political philosophy there are not many who are influenced by new theories after they are twenty-five or thirty years of age, so that the ideas which civil servants and politicians and even agitators apply to current events are not likely to be the newest. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil.

• Ch. 24 Concluding Notes p. 383-384

§ Quotes about General Theory [ edit ]

• His book, The General Theory of Employment, Interest and Money. published in 1936, has already become one of the classics of economic thought. Unfortunately for the undergraduate and for the general reader, the General Theory is addressed to professional economists and is not very intelligible to others. However, the fundamental ideas underlying Keynes’ work are relatively simple and can be understood by anyone who is acquainted with broad problems of economic policy such as unemployment and inflation.

• Dudley Dillard, The Economics of John Maynard Keynes (1948), Preface

• When Keynes came to write his General Theory of Employment, Interest and Money (first published in 1936), he was concerned—obsessed might be a better word—with the problem of stability and disruption. In contrast to the classical economists and their neoclassical heirs (his own teachers) he was convinced that conditions of uncertainty—with the attendant social and political insecurity—should be treated as the norm rather than the exception in capitalist economies. In short, he was proposing a theory of the world he had just lived through: far from being the default condition of perfect markets, stability was an unpredictable and even scarce byproduct of unregulated economic activity. Intervention, in one form or another, was the necessary condition for economic well-being and, on occasion, for the very survival of markets themselves. In a distinctively English key, this conclusion amounted to a version of Zweig: we once thought everything was stable, now we know that all is in flux.

• Tony Judt. in Tony Judt and Timothy Snyder, Thinking the twentieth century (2012), Ch. 1. The Name Remains: Jewish Questioner

• I must confess that the labour I have spent on The General Theory of Employment, Interest, and Money leaves me with a feeling of keen disappointment.The chief value of the book has seemed to lie in the hard labour involved in reading it,which enforces intensive grappling with the problems.

• Frank H. Knight. Unemployment: And Mr. Keynes’s Revolution in Economic Theory

• Over the past 70 years The General Theory has shaped the views even of those who haven’t heard of it, or who believe they disagree with it. A businessman who warns that falling confidence poses risks for the economy is a Keynesian, whether he knows it or not. A politician who promises that his tax cuts will create jobs by putting spending money in peoples’ pockets is a Keynesian, even if he claims to abhor the doctrine. Even self-proclaimed supply-side economists, who claim to have refuted Keynes, fall back on unmistakably Keynesian stories to explain why the economy turned down in a given year.

• Paul Krugman. Introduction to The General Theory of Employment, Interest, and Money (2006)

• Stripped down, the conclusions of The General Theory might be expressed as four bullet points:

  • Economies can and often do suffer from an overall lack of demand, which leads to involuntary unemployment

  • The economy’s automatic tendency to correct shortfalls in demand, if it exists at all, operates slowly and painfully

  • Government policies to increase demand, by contrast, can reduce unemployment quickly

  • Sometimes increasing the money supply won’t be enough to persuade the private sector to spend more, and government spending must step into the breach.

  To a modern practitioner of economic policy, none of this – except, possibly, the last point – sounds startling or even especially controversial. But these ideas weren’t just radical when Keynes proposed them; they were very nearly unthinkable. And the great achievement of The General Theory was precisely to make them thinkable.

• Paul Krugman. Introduction to The General Theory of Employment, Interest, and Money (2006)

• What made the General Theory so hard to accept was not its intellectual content, which in a calm mood can easily be mastered, but its shocking implications. Worse than private vices being public benefits, it seemed that the new doctrine was the still more disconcerting proposition that private virtues (of thriftiness and careful husbandry) were pubic vices.

• Joan Robinson. in Economic Philosophy (1962), Ch. 4 The Keynesian Revolution

• The supply side of the model in Keynes’s General Theory (1936) has two key features. First, the nominal wage is completely unresponsive to current period developments (at least over some range) … Second, for reasons that Keynes didnot specify explicitly, the wage that prevails in the absence of nominal rigidity is above the level that equates supply and demand. Thus, implicitly, thelabor market has some non-Walrasian feature that causes the equilibriumreal wage to be above the market-clearing level. … Fluctuations in the demand for goods lead to movements of employmentand the real wage along the downward-sloping labor demand curve. Higher demand, for example, raises the price level. Thus it leads to a lower realwage and higher employment. … This view of the supply side of the economy therefore implies a countercyclicalreal wage in response to aggregate demand shocks. This prediction has been subject to extensive testing beginning shortly after the publication of the General Theory .It has consistently failed to find support. As described inthe next section, our current understanding suggests that real wages are moderately procyclical.

• David Romer. Advanced Macroeconomics

• The view of supply in the General Theory assumes that the goods market iscompetitive and goods prices are completely flexible, and that the source ofnominal stickiness is entirely in the labor market. This raises the question of what occurs in the reverse case where the labor market is competitive and wages are completely flexible, and where the source of incomplete nominal adjustment is entirely in the goods market.

• David Romer. Advanced Macroeconomics

• The General Theory caught most economists under the age of 35 with the unexpected virulence of a disease first attacking and decimating an isolated tribe of south sea islanders. Economists beyond 50 turned out to be quite immune to the ailment. With time, most economists in between began to run the fever, often without knowing or admitting their condition.

• Paul Samuelson. Lord Keynes and the General Theory, Econometrica (1946)

• Herein lies the secret of the General Theory. It is a badly written book, poorly organized; any layman who, beguiled by the author’s previous reputation. bought the book was cheated of his five shillings. It is not well suited for classroom use. It is arrogant, bad-tempered. polemical, and not overly generous in its acknowledgments. It abounds in mares’ nests or confusions. In it the Keynesian system stands out indistinctly, as if the author were hardly aware of its existence or cognizant of its properties; and certainly he is at his worst when expounding its relations to its predecessors. Flashes of insight and intuition intersperse tedious algebra. An awkward definition suddenly gives way to an unforgettable cadenza. When finally mastered, its analysis is found to be obvious and at the same time new. In short, it is a work of genius .

• Paul Samuelson. Lord Keynes and the General Theory, Econometrica (1946)

• The General Theory seems to reduce it once more to simplicity, and to enable the economist once more to give simple advice that everybody could understand. But exactly as in the case of Ricardian economics, there was enough to attract, to inspire even, the sophisticated.

• Joseph Schumpeter. John Maynard Keynes, American Economic Review (1946)

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