The Keynesian Economic Problem and its Solution

Keynes regarded the post-1918 experiences of Great Britain and the USA as actual examples of his thesis that technically advanced, capital-rich economies could suffer depression and privation where they might reasonably expect full employment and prosperity. The factors common to both, which for Keynes explained the apparent anomaly, were that the level of economic activity was dependent almost entirely on the free play of market forces, and that the rate of interest and the marginal efficiency of capital had come into a special relationship with each other such that, in the absence of any purposive management of investment and consumption behaviour, full employment could not be achieved.