Keynes himself suggests in his supposed main work

The General Theory of Employment, Interest, and Money


the essence of the General Theory of Employment

can actually be reduced on three points

Hence the volume of employment in equilibrium depends on (i) the aggregate supply function, (ii) the propensity to consume, and (iii) the volume of investment, D2.

And the entire theory can be reduced in other ways as the following quotes from the same work show:

Consumption—to repeat the obvious—is the sole end and object of all economic activity. Opportunities for employment are necessarily limited by the extent of aggregate demand. Aggregate demand can be derived only from present consumption or from present provision for future consumption. The consumption for which we can profitably provide in advance cannot be pushed indefinitely into the future.

And another contention:

When involuntary unemployment exists, the marginal disutility of labour is necessarily less than the utility of the marginal product. Indeed it may be much less. For a man who has been long unemployed some measure of labour, instead of involving disutility, may have a positive utility. If this is accepted, the above reasoning shows how ‘wasteful’ loan expenditure may nevertheless enrich the community on balance. Pyramid-building, earthquakes, even wars may serve to increase wealth, if the education of our statesmen on the principles of the classical economics stands in the way of anything better.


If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is.

If we reflect a little bit further on these few passages, and not withstanding the fact that Keynes is surely a great economist, at least in the sense of circumspection there remains a main obstacle that may suggest that there is not only a problem with

the education of our statesmen on the principles of the classical economics

but obviously also the assumption that the bottles, suggested to be filled with banknotes and hidden in disused coalmines had been full of high-percentage alcoholic drinks, consumed before suggesting such as mentioned above – in fact Keynes, in this ‘General Theory’ and especially, of course, in his outline of the

Economic Possibilities for our Grandchildren

seems to be aware of this. The reader of the quoted lines – and of the entire ‘General Theory’ – may take a few minutes and concentrate on the quoted passages, asking:

What society is suggested here and what role has economic activity in it?

It is a society that is distant from any meaningful social existence, founded in a circular understanding of consumption. Although production is not abandoned as relevant point of reference, in other words: although such economics does not necessarily reduce the process of generating value entirely in the sphere of consumption, it still does refer to the principle of marginality as ultimate motif de décision if not raison d’être.

In consequence it is a society and economy that is established by an inherent supposition that growth is the ultimate mechanism of reproduction, disjoined from any needs that are based in use value.

This also means that such economics fails to recognise that one cannot stop anybody striving to be a bubble in an economy that is conceptualised as bathtub. This refers to Keynes, stating

Speculators may do no harm as bubbles on a steady stream of enterprise. But the position is serious when enterprise becomes the bubble on a whirlpool of speculation. When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. The measure of success attained by Wall Street, regarded as an institution of which the proper social purpose is to direct new investment into the most profitable channels in terms of future yield, cannot be claimed as one of the outstanding triumphs of laissez- faire capitalism—which is not surprising, if I am right in thinking that the best brains of Wall Street have been in fact directed towards a different object.

As briefly said, Keynes himself was to some extent critical about this, stating in his work on the

Economic Possibilities for our Grandchildren

For many ages to come the old Adam will be so strong in us that everybody will need to do some work if he is to be contented. We shall do more things for ourselves than is usual with the rich to-day, only too glad to have small duties and tasks and routines. But beyond this, we shall endeavour to spread the bread thin on the butter – to make what work there is still to be done to be as widely shared as possible. Three-hour shifts or a fifteen-hour week may put off the problem for a great while. For three hours a day is quite enough to satisfy the old Adam in most of us!

Even long time before him, the surely conservative economist John Stuart Mill was pursuing in his

Principles of Political Economy with some of their Applications to Social Philosophy

the idea of stationary state.

Leaving aside that nothing of this is reality, we should not forget to ask for the real reasons standing behind such unfulfilled unmatched state, not least

  • the permanent furthering of breeding ‘the old Adam’
  • and …, well, the unquestioned power of those who drowned the bit of education in the distilled and fermented content of the bottles that Keynes suggest to hide in the coalmines.

Indeed, as we know from Schumpeter

The conquest of the air may well be more important than the conquest of India was—we must not confuse geographical frontiers with economic ones.

And this conquest is going on: the conquest of air and everything, going hand in hand with the “re-conquest” of Venezuela etc, and the new conquest, now directed towards the outer space.



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