Chapter 3: Keynes’s Semantic Shifts: The Shock of A Treatise on Money
For all the general attributions of novelty to his ideas, many of which were misplaced (see Appendix), Keynes’s proposals in A Treatise on Money were ‘indeed revolutionary’, as Hayek described them in his 1931 Economica review (1931, p. 122). There was also the recognition by Robertson that Keynes was contributing ‘fertile and penetrating ideas’ to ‘a field of appalling intellectual difficulty’ (1931, p. 395), and further by Hayek that it was ‘undeniably in so many ways a magnificent performance’ (1931, p. 146). A Treatise on Money is definitely as important a work as The General Theory. Having said this, the two powerful thinkers, Robertson and Hayek, defined a less than favourable reception for the Treatise: one in Cambridge, in the shadow of Pigou the Marshallian, the other at the London School of Economics (LSE), by an icon with a magnetic influence on young scholars. Hayek, perhaps more than any other author of the time, scrutinized the Treatise, in two extremely lengthy review articles and yet, unable to identify the Austrian theory within, he was not open to appreciating it from Keynes’s perspective.1 The major difference between Robertson and Keynes lay in Robertson’s having been too engrained in the Marshall–Pigou–Fisher school of thought of which Keynes was critical, particularly its conception of money (Chapter 2). Hayek and Robertson, even as two of its most important reviewers, were unable to see the theoretical aspects of the Treatise on its own terms, reading them rather through the lens of traditional monetarist...
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