Keyne's General Theory: A Different Perspective
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A FLEDGLING ECONOMIST approaching Keynes's General Theory for the first time expects to find the policy recommendations derived from a theory that everyone knows to be "Keynesian." Although much of the thought and apparatus identified as Keynesian is there—underemployment equilibrium, liquidity trap, spending multiplier, downward wage "rigidity"— there is little about pump priming, tax cuts, and carefully timed changes in government spending to spur recovery. To find fiscal policies recommended in Keynes's work, one must look to Keynes's popular writings, many of them written before the General Theory. Keynes of the Treatise on Money (1930, II, pp. 337-38), who had not yet succeeded in the "long struggle of escape" from "traditional modes of thought and expression" gives at least as much attention to fiscal policy as Keynes of the General Theory, who mentions public works spending in a few passages of the chapter on the multiplier (1936, chap. 10), but neglects to mention public works in his "Notes on the Trade Cycle" (1936, chap. 22). In that chapter, as in other parts of the book, Keynes's main recommendation is for social control of investment.