Keynes's General Theory: Seventy-Five Years Later

360 Pages·3.017 MB·English

by  Thomas Cate

Keynes’s General Theory
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Keynes’s General
Theory
Seventy-Five Years Later
Edited by
Thomas Cate
Northern Kentucky University, USA
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
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© Thomas Cate 2012
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic,
mechanical or photocopying, recording, or otherwise without the prior
permission of the publisher.
Published by
Edward Elgar Publishing Limited
The Lypiatts
15 Lansdown Road
Cheltenham
Glos GL50 2JA
UK
Edward Elgar Publishing, Inc.
William Pratt House
9 Dewey Court
Northampton
Massachusetts 01060
USA
A catalogue record for this book
is available from the British Library
Library of Congress Control Number: 2011932877
ISBN 978 1 84542 411 4
Typeset by Servis Filmsetting Ltd, Stockport, Cheshire
Printed and bound by MPG Books Group, UK
3
0
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Contents
List of contributors vii
In memory of Gilles Dostaler Robert W. Dimand ix
Editor’s introduction Thomas Cate 1
PART I T HE GENERAL THEORY AND FUNDAMENTAL
UNCERTAINTY
1. On Keynes’s seminal innovation and related essential features:
revisiting the notion of equilibrium in The General Theory 19
Angel Asensio
2. Keynes, the Neglected Theorist 35
M.G. Hayes
3. Keynes’s economic theory – judgement under uncertainty 58
Elke Muchlinski
PART II T HE GENERAL THEORY AND THE HISTORY
OF MACROECONOMICS
4. Dead or alive? The ebbs and fl ows of Keynesianism over the
history of macroeconomics 77
Michel DeVroey
5. The roots of the present are in the past: the relation of postwar
developments in macroeconomics to interwar business cycle and
monetary theory 103
Robert W. Dimand
6. Keynes’s General Theory, the quantity theory of money and
monetary policy 127
Peter Docherty
7. The General Theory of Employment, Interest, and Money after
75 years: the importance of being in the right place at the right
time 158
Matthew N. Luzzetti and Lee E. Ohanian
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vi Keynes’s General Theory
8. The impact of The General Theory on economic theory and
the development of public policies: a nested vision of Keynes’s
ideas with the classical vision through a panoramic view of his
works 181
Lall Ramrattan and Michael Szenberg
PART III T HE GENERAL THEORY AND FRIEDMAN,
KALDOR, MARX AND SRAFFA
9. The right kind of an economist’: Friedman’s view of Keynes 207
Roger E. Backhouse and Bradley W. Bateman
10. Keynes after Sraff a and Kaldor: eff ective demand,
accumulation and productivity growth 222
Alcino F. Camara- Neto and Matías Vernengo
11. The General Theory, Marx, Marxism and the Soviet Union 238
Gilles Dostaler
PART IV T HE GENERAL THEORY AND NEW
INTERPRETATIONS
12. The General Theory: seventy- fi ve years later 267
Omar F. Hamouda
13. Money’s endogeneity, Keynes’s General Theory and beyond 293
Louis- Phillippe Rochon
14. Interest and profi t 306
John Smithin
15. Keynes after 75 years: rethinking money as a public monopoly 325
L. Randall Wray
Name index 341
Subject index 347
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Contributors
Angel Asensio Associate Professor of Economics, Centre d’Economie de
Paris Nord, University of Paris 13, France
Roger E. Backhouse Professor of the History and Philosophy of Economics,
Department of Economics, University of Birmingham, UK and Erasmus
Institute of Philosophy and Economics, Erasmus University Rotterdam,
the Netherlands
Bradley W. Bateman Provost and Professor of Economics, Denison
University, USA
Alcino F. Camara- Neto Dean, Law and Economic Sciences Center,
Federal University of Rio de Janeiro, Brazil
Thomas Cate Professor of Economics, Northern Kentucky University, USA
Michel DeVroey Professor of Economics, Department of Economics,
Université Catholique de Louvain, Belgium
Robert W. Dimand Professor of Economics, Department of Economics,
Brock University, St Catharines, Ontario, Canada
Peter Docherty Associate Professor, Economics Group, UTS Business
School, University of Technology, Sydney, Australia
Gilles Dostaler Professor of Economics, Department of Economics,
Université du Québec à Montréal, Canada
Omar F. Hamouda Department of Economics, Glendon College, York
University, Canada
M.G. Hayes Fellow and Director of Studies in Economics, Robinson
College, University of Cambridge, UK
Matthew N. Luzzetti Graduate student, Department of Economics,
University of California, Los Angeles, USA
Elke Muchlinski Economist, Visiting Professor, and Philosopher, has
held teaching positions at the Free University of Berlin, the University
of Halle (2010–11), the University of Trier (2009), and the University of
Hamburg (summer 2008) and at the time of publication held a temporary
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viii Keynes’s General Theory
appointment at the University of Saarland, Saarbrücken, in International
Economics and Philosophy
Lee E. Ohanian Professor of Economics, Department of Economics,
University of California, Los Angeles, USA
Lall Ramrattan Instructor, University of California, Berkeley, USA
Louis- Phillippe Rochon Director, International Economic Policy Institute
and Associate Professor, Department of Economics, Laurentian
University, Canada
John Smithin Professor of Economics, Department of Economics and the
Schulich School of Business, York University, Canada
Michael Szenberg Distinguished Professor of Economics, Department of
Finance and Economics, Lubin School of Business, Pace University, New
York City, USA
Matías Vernengo Associate Professor of Economics, Department of
Economics, University of Utah, USA
L. Randall Wray Professor of Economics, Department of Economics,
University of Missouri- Kansas City, USA
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In memory of Gilles Dostaler
Gilles Dostaler, Keynes scholar, bon vivant, professor of economic science
at the Université du Québec à Montréal (UQAM) and member of research
centres at the Universities of Paris- 1, Paris- 8, and Toulouse, passed away
on 26 February 2011. Sustained by his partner Marielle Cauchy, Gilles
remained active in research and in life to the very end of his battle with
cancer: in the last week before his death, we exchanged e- mails about a
CEA (Canadian Economics Association) session we were organizing to
mark the 75th anniversary of the publication of Keynes’s General Theory.
An internationally- renowned economist and historian of economic
thought, Gilles Dostaler published ten books, a dozen edited books, more
than 30 journal articles, more than 30 papers in edited volumes, and 16
published interviews (three of them in Japanese newspapers), and was on
the editorial boards of seven journals – and was as much at home waist-
deep in a salmon stream in Gaspé as in a library.
After teaching mathematics at Collège Jean- de- Brebeuf and graduat-
ing from McGill University (MA in economics, 1972) and the Université
de Paris- 8 (PhD in economics, 1975), Gilles joined the faculty of UQAM
in 1975, initially in sociology and then from 1979 in economics (associ-
ate professor 1982, full professor 1991). As a student at McGill, Gilles
had been one of the organizers of the ‘McGill français’ demonstrations
that led to the creation of UQAM. Writing a dissertation on Marxian
value theory, his fi rst books were Marx, la valeur, et l’économie poli-
tique (Paris: Anthropos, 1978) and Valeur et prix: histoire d’un débat
(Paris: Maspero, Grenoble: Presses Universitaires de Grenoble, Montréal:
Presses de l’Université du Québec, 1978; revised and expanded edition
Paris: L’Harmattan, 2010; Spanish translation, 1980). Subsequently the
focus of Gilles’s scholarship was the ideas of John Maynard Keynes.
He stressed the continuing relevance of Keynes’s insights and analysis
to the understanding of economic crisis and stabilization, notably in his
last books, Keynes par- delà l’économie (Paris: Thierry Magnier, 2009)
and Keynes y el desemple (Madrid: Abada, 2011). As an historian of
ideas, Gilles explored the role of the Bloomsbury Group in the origins
of Keynes’s social, political, and aesthetic ideas, the relation of Keynes’s
thought to that of Freud, and comparing and contrasting Keynes’s vision
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x Keynes’s General Theory
of how the economy works with those of Karl Marx, Friedrich Hayek,
Milton Friedman, and Gunnar Myrdal, a comparative focus evident of
the titles of many of his articles: ‘The debate between Hayek and Keynes’
(1991), ‘Hayek contra Keynes’ (1997), ‘Keynes and Friedman on money’
(1997), ‘Friedman and Keynes: divergences and convergences’ (1998),
‘Freud and Keynes on money and capitalism’ (2000), ‘Freud et Keynes:
un combat commun’ (2009), ‘Bloomsbury, Freud et Keynes’ (2010), ‘The
General Theory, Marx, Marxism, and the Soviet Union’ (2011).
Gilles Dostaler’s scholarship reached a world- wide audience, pub-
lished on fi ve continents and in nine languages. His invaluable reference
work with Michel Beaud, La pensée économique depuis Keynes (Paris:
Seuil, 1993), was not only published in English as Economic Thought
since Keynes (Edward Elgar, 1995, revised paperback Routledge, 1997)
but also appeared in Arabic, Portuguese, Romanian, and Vietnamese
translations. Gilles’s magnum opus was Keynes et ses combats (Paris:
Albin Michel, 2005, expanded edition 2009), translated as Keynes and his
Battles (Edward Elgar, 2007, paperback 2009) and also translated into
Japanese, Portuguese, and Spanish. His Le libéralisme de Hayek (Paris: La
Découverte, 2001) was translated into Italian and Vietnamese. His book
with Bernard Maris, Capitalisme et pulsion de mort (Paris: Albin Michel,
2009), drawing on Keynes’s concept of a morbid desire for liquidity and
on Freud’s ideas to understand the world fi nancial crisis, will appear in
Italian and Portuguese editions.
Robert W. Dimand
Robert Dimand is also a contributor to this volume. He wrote this obitu-
ary for publication in the Canadian Economics Association Newsletter, in
August 2011.
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