In 1936 he published the most provocative book written by any economist of his generation. The General Theory, as it is known to all economists, cut through all the Gordian Knots of pre-Keynesian discussion of the trade cycle and propounded a new approach to the determination of the level of economic activity, the problems of employment and unemployment, the causes of inflation, the strategies of budgetary policy.

Arguments about this book continued until his death in 1946 and still continue today. Despite all that has been written in the subsequent quarter of a century, Keynes and his book still represent the turning-point between the old economics and the new from which each generation of economists needs to take its inspiration and its point of departure towards fresh attempts to carry his work further.

Availability

The General Theory was printed at good quality in large numbers; inexpensive second-hand copies can easily be found.

It is out of copyright. Browsable versions are available on the History of Economic Thought website and at marxists.org. A pdf download was made by Steve Thomas for The University of Adelaide Library.

A supplement which should be read together with the General Theory is Keynes’s Reply to Viner which is included in vol XIV of the ‘Collected Writings’ and on the History of Economic Thought website.

For scholarly purposes volumes XIII, XIV and XXIX of Keynes’s ‘Collected Writings’ contain essential additional material.

Guides

• Alvin Hansen’s Guide to Keynes (1953), the standard text which introduced Keynes to a generation of students.
• Henry Hazlitt’s Failure of the “New Economics” (1959), a celebrated anti-Keynesian polemic. Overlong, overliteral, overpolitical... but readable, supported by robust common sense, and useful for the independence of its viewpoint.
• Colin Champion’s Critical Study of Keynes’s General Theory (2019), a mixture of exposition (supported by helpful diagrams) and criticism. It tries to be sympathetic but finds the logic keeps getting in the way.
• Other: there are numerous other works which provide insight into Keynes’s thought.

Contents

(Chapter titles link to pages on the History of Economic Thought website.)

BOOK I: INTRODUCTION
1	The General Theory	3
2	The Postulates of the Classical Economics	4
3	The Principle of Effective Demand	23
BOOK II: DEFINITIONS AND IDEAS
4	The Choice of Units	37
5	Expectation as determining Output and Employment	46
6	The Definition of Income, Saving and Investment	52
	Appendix on User Cost	66
7	The Meaning of Saving and Investment Further Considered	74
BOOK III: THE PROPENSITY TO CONSUME
8	The Propensity to Consume: I. The Objective Factors	89
9	The Propensity to Consume: II. The Subjective Factors	107
10	The Marginal Propensity to Consume and the Multiplier	113
BOOK IV: THE INDUCEMENT TO INVEST
11	The Marginal Efficiency of Capital	135
12	The State of Long-term Expectation	147
13	The General Theory of the Rate of Interest	165
14	The Classical Theory of the Rate of Interest	175
	Appendix on the Rate of Interest in Marshall’s Principles of Economics, Ricardo’s Principles of Political Economy, and elsewhere	186
15	The Psychological and Business Incentives to Liquidity	194
16	Sundry Observations on the Nature of Capital	210
17	The Essential Properties of Interest and Money	222
18	The General Theory of Employment Re-stated	245
BOOK V: MONEY-WAGES AND PRICES
19	Changes in Money-Wages	257
	Appendix on Prof Pigou’s Theory of Unemployment	272
20	The Employment Function	280
21	The Theory of Prices	292
BOOK VI: SHORT NOTES SUGGESTED BY THE GENERAL THEORY
22	Notes on the Trade Cycle	313
23	Notes on Mercantilism, the Usury Laws, Stamped Money and Theories of Under-consumption	333
24	Concluding Notes on the Social Philosophy towards which the General Theory might Lead	372