Chapter 12: The General Theory: Seventy-Five Years Later
Omar F. Hamouda Resurgence of the name of Keynes has never caught more attention among journalists and politicians nor provoked such debate worldwide than since the start of the 2007 financial crisis. While the principles of reigning macroeconomics have been put under attack, the profession is slow to provide leadership, based on knowledge of economics, as to how to comprehend this latest caprice of the economy. The discussion has been left, in the eyes of the larger public, to opinions and speculation, largely in blogs, editorial columns and political action committees, in which the proponents either appeal to or are appalled by the name of Keynes, as if his policies are the source of inspiration or the cause of the current economic situation. There is much nonsense in what is attributed to Keynes, whether to his economic theory or his policies. Perhaps given the present circumstances, the time is ripe to assess or reassess The General Theory of Employment, Interest, and Money and its legacy. Why is it that the profession cannot converge to some general comprehension of what Keynes’s general theory is? Despite 75 years of discussing, debating, accepting, and rejecting the would-be paradigm of Keynes, The General Theory has simply not been read for its fundamentals on its own terms. It has instead been analysed piecemeal and through the lenses, often opinionated or partisan, of the secondary literature, with an unwarranted focus on so-called errors of Keynes. This has, over the years, created distortions and unfounded myths and...
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