What Is the Legitimate Role of Government?

Keynes pointed out in Chapter 12 of The General Theory that investments which are ‘fixed’ for the community are thus made ‘liquid’ for the individual. Transactors too often concentrate their efforts on liquidity, rather than productivity. ‘The actual, private object of the most skilled investment to-day,’ according to Keynes, ‘is “to beat the gun”… to outwit the crowd, and to pass the bad, or depreciating, half-crown to the other fellow.’ Such transfers of assets, according to Keynes, are ‘a game of Snap, of Old Maid, of Musical Chairs — a pastime in which he is victor who says snap neither too soon nor too late, who passes the Old Maid to his neighbor before the game is over, who secures a chair for himself when the music stops’.