Tuesday, March 22, 2022

Keynes's General Theory in one sentence

From chapter 3:

The effective demand associated with full employment is a special case, only realised when the propensity to consume and the inducement to invest stand in a particular relationship to one another. 

1 comment:

The Arthurian said...

From my Keynes and Civilization:

Late in the General Theory, in chapter 24, section iii, Keynes summarizes his recommendations as "the task of adjusting to one another the propensity to consume and the inducement to invest". In other words, the task is to correct the imbalance between the two factors we noted previously, when we found similarities between Keynes and Carroll Quigley, author of The Evolution of Civilizations.

Keynes described the task as "the only practicable means of avoiding the destruction of existing economic forms in their entirety". There are not very many things that can destroy an economic system "in its entirety". One that can is a Dark Age.