ABSTRACT OF PAPER
Title: The Eve of the General Theory
Author:
In this paper I will concentrate on Keynes’s theoretical development in 1934. Firstly, we will examine two manuscripts: (a) a typescript, “The General Theory of Employment, Interest and Money”, written probably in the spring of 1934; and (b) a revised version of Chapters 8 and 9 of this typescript, written in the summer of 1934. Then I will look at the Michaelmas lecture of 1934. The first manuscript has two features particularly relevant to our concern here: (i) the way in which the concept of “effective demand” and the theory of employment are discussed; (ii) the way consumption theory and investment theory are argued out. Point (i) is full of ambiguities, reflecting the struggle Keynes was going through in his search for a new theory of employment, while point (ii) is very similar to the argumentation in the General Theory. Although Keynes puts forward a new model in the above manuscripts to explain how the level of employment is determined, his argument still lacks precision. In this respect, Keynes’s endeavors to explain the workings coherently were to continue right up to the General Theory, even here falling somewhat short of the requisite precision.
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