Keynes’s General Theory was the most influential economic text of the twentieth century, and is one of the least understood. Keynes wrote brilliantly for the popular press but tied himself in knots when trying to present his own theoretical ideas. He was seen at the time as a heretic and a paradox-monger. His ideas were eventually accepted by much of the economics establishment, and then rejected by adversaries who had absorbed more of them than they cared to admit. Nowadays it is hard to tell what comes from Keynes and what doesn’t.

The relevance of his ideas is not just to theoreticians. Political discussion often hinges on ideas associated with Keynes. Every voter is called on to express a quinquennial preference between balanced budgets and fiscal stimulation; yet nowhere can he or she find adequate guidance on the meaning of Keynes’s words, or on whether they are indeed paradoxes or instead a banal application of the laws of supply and demand to the economy as a whole.

This Critical Study presents Keynes’s ideas in a clear and systematic way. 26 colour diagrams illustrate the theoretical relationships, and an initial chapter provides a primer on the basic concepts needed to understand Keynes’s work.

Above all, as its title suggests, the book is critical. It looks at those aspects of Keynes’s doctrine which were seen as paradoxical when they appeared, and tries to examine the rationale for his rejection of ‘Classical’ theory.

All this is presented in the context of the society of the 30s and of the personalities – with their sympathies and antagonisms – who participated in the debates. The book offers a relatively sympathetic account of the contributions of A. C. Pigou and Dennis Robertson to the topics raised by the General Theory.


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Economic Basics5
Unemployment and Economics in the Great Depression16
Origins of the Multiplier24
The Writing of the General Theory34
Keynes’s Aims in the General Theory (Chapter 1)36
The Postulates of Classical Economics (Chapter 2)38
The Choice of Units (Chapter 4)45
Saving, Investment and Consumption (Chapters 6–10)50
Absence of Hoarding in the General Theory56
The Marginal Efficiency of Capital (Chapter 11)61
Liquidity Preference (Chapters 13 and 15)74
Keynes’s Economic Model (Chapters 14 and 18)80
Miscellaneous Topics in Chapters 14 and 1889
The Principle of Effective Demand (Chapter 3)99
Mr Keynes and the Classics102
The Keynesian Multiplier (Chapters 10 and 18)122
Dynamic Aspects of Keynes’s Theory
        (Chapters 5, 11, 12, 21, 22)
Effective Demand Revisited (Chapter 16)145
Essential Properties of Interest and Money (Chapter 17)159
Keynes’s Theory of Wages and Prices (Chapters 19–21)168
Social Commentary (Chapters 16, 21, 23, 24)177
Concluding Remarks180
Preappendix: Elasticity and the Marginal Cost Curve187
Appendix: Keynes’s Theory of Prices (Chapters 20 and 21)190
List of Symbols207
List of Figures209
Principal Works Consulted211

(Some of the end matter is provided as pdf downloads. Note that the list of principal works consulted is not a complete list of works referenced, being limited to those cited repeatedly or needing a fuller bibliographic reference than is suitable for footnotes.)


The following web pages are cited as references in the Critical Study:


The author can be contacted at the email address at the foot of the page.


On another page I turn over some additions and corrections to passages in my book.

Document Processing

See the linked page for information on the word and image processing used for the Critical Study.