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2024 | OriginalPaper | Buchkapitel

1. How Did Keynes Transform His Theory from the Tract into the Treatise?: Consideration Through Primary Material

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Abstract

The issue of reparations and war debts was one of the most serious problems facing the world in the interwar-period. The United States, concerned solely with war debts repayment, turned down not only the Allied proposal to link reparations and war debts, but also the British 1922 proposal to cancel the inter-Allied war debts. The return to the Gold Standard at pre-war parity in April 1925 may be seen as an aspect of Britain’s struggle to retain hegemony.

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Fußnoten
1
Bigg (1990, pp.96–8, 173–6), Skidelsky (1992, pp.281–5), Moggridge (1992, pp.434–43; Chapter 19) are exceptions. Patinkin (1976, Chapter 3) explains, but does not analyze this point. It is not dealt with in Bridel (1987), Dimand (1988), Meltzer (1988), Amadeo (1989), and Laidler (1999).
 
2
Keynes states in TMR (p.63) that his equation follows that in Pigou (1917), which allows for variability of its components. For the relation between the two, see Bigg (1990, p.75).
 
3
See TMR, p.34.
 
4
For the theory’s applicability, see TMR, pp.73–80. For its rejection, see TM.1, pp.64–5.
 
5
Clarke (1988, p.230) argues that the Treatise can, “… be explained along ‘externalist lines’”, while “the General Theory must …be understood in ‘internalist’ terms”.
 
6
See TM.1, pp.176–7.
 
7
Keynes (1914) reviews it critically, although he evaluates Part III positively.
 
8
Keynes was profuse in his acknowledgements to Robertson, referring to him as “my grandfather” (Keynes 1937a). JMK.14, p.202, n.2). See also his letter to Robertson [13 December 1936] (JMK.14, p.94).
 
9
See TM.1, p.205. We find three types of interpretation: (i) the Treatise accepts it; (ii) the Treatise is critical of it; and (iii) the Treatise stands in between.
 
10
Laidler (1991) appraises the Treatise’s portfolio selection theory as making good the defect of neoclassical monetary economics.
 
11
See TM.1, pp.196–7. This shows why the Treatise regards money supply as endogenous. For exogeneity/endogeneity in Keynes’s economics, see Moore (1988) and Graziani (2003).
 
12
When did Wicksell’s theory come to influence Keynes? It is very difficult to ascertain the period, for there survive no relevant documents from 1925–1930.
 
13
This means a dichotomy between Keynes as a commentator and Keynes as a theorist. See a “publicist” and an “economist” in Clarke (1998, p.71) and Bridel (1987, p.96).
 
14
“Currency Policy and Unemployment” (NA, 11 August 1923), where a lack of trust in the price level is pointed out as the cause of unemployment, belongs to the Tract theory.
 
15
The TOC (undated, Tm/3/2/2) of the same period survives, arguing “[t]he control of p by control of n … only requires that [k, k΄, and r] should not be linear functions of n”.
 
16
See Skidelsky (1992, p.281).
 
17
In his letter to Lydia [31 Oct. Hill and Keynes 1989, p.245] Keynes said: “The conversation with Sraffa about Credit Cycle has made me very eager to begin writing my book”.
 
18
Robertson stressed fixed capital. See his comment on Keynes’s draft (JMK.13, p.26).
 
19
Keynes’s stance as a “Monetary Reformer” is clearly expressed, for example, in “The Problem of the Gold Standard” (NA, 21 March 1925).
 
20
The only surviving formula around this period is “P = M/(C1 + WT) where … C1 [is] the real value of the investment-deposits, T the volume of transactions, and W the inverse of the ‘efficiency’ of the money deposits” (Tm//2/350).
 
21
Possibly Keynes used the transaction approach in terms of the short run, for he argues “the variability of [the equation’s] elements” (Tm/3/2/23; 26).
 
22
Beside this, Fisher has a “transitional periods” theory.
 
23
See Moggridge (1992, pp.441–2).
 
24
Patinkin (1976, pp.28–9) estimates that the fundamental equations may have appeared in the latter half of 1928.
 
25
Chapter 1, Book IV seems to be related to a memo (Tm/2/342–3).
 
26
See also the expression, “(Earnings minus Savings)/(Output minus Investment) = Price Level” (undated, Tm/3/2/86), substantially similar to the first fundamental equation.
 
27
These are to be moved to Book V of TM.2, after separation from the fundamental equation. See Keynes’s “precautionary word” (TM.2, p.4).
 
28
For “Keynesian parallels” in Robertson (1926), see Fletcher (2000, Chapter 21). For the collaboration between Robertson and Keynes in the 1920s, see Presley (1992, pp.88–90).
 
29
See also Keynes’s letter to Lydia [18 May. Hill and Keynes 1989, p.325], which shows he did not like the proof sheets of Robertson (1926).
 
30
On Keynes’s collaboration concerning Robertson (1915) in the making, see Presley (1992, pp.82–85).
 
31
See Robertson (1928) and Bigg (1990, pp.175–6).
 
32
For this divergence, see Presley (1992, p.90). For Robertson’s criticism of the General Theory, Presley (1992, p.93) is to the point. Also see “Notes on the Definition of Saving” (esp. JMK.13, pp.287–288).
 
33
The material which concerns the Treatise’s Chapter 37 survives in Tm/2/246–75.
 
34
For this impact on Keynes, see Deutcher (1990, pp.102–5). Keynes’s rejoinder was made on 28 November 1930 (Tm/1/4/14–54).
 
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Metadaten
Titel
How Did Keynes Transform His Theory from the Tract into the Treatise?: Consideration Through Primary Material
verfasst von
Toshiaki Hirai
Copyright-Jahr
2024
DOI
https://doi.org/10.1007/978-3-031-40135-0_1