Austin's Response to The General Theory

Austin increasingly assimilated the new lessons Keynes was developing, so much so that he was to review The General Theory (Keynes 1936 [1973]) for The Economist (29 February 1936), the only ever signed review in that journal (and then it was initials only, E.A.G.R.). Austin’s review was given a title of which he disapproved (it was misleadingly—because far too narrow—called ‘Mr Keynes on Money’) and also editorial cuts may have altered its emphasis and balance. When Austin complained to Keynes of this, Keynes said it served him right for publishing in the yellow press. The review was perceptive and accurate as to the essential nature of the new theory. It could be read with profit today by modern students to allow them both to get the essence of the theory and of how the advanced world still works. Austin’s classical training was in evidence. Of Keynes’s polemical passages, he wrote: ‘Like Horace’s schoolmaster, Mr Keynes whips his pupils into agreement, where modest reasonableness, many will feel [not Austin, though], would better have achieved this end’ (Austin Robinson 1936: 472).

What is illuminating, considering the muddled debates that were to occur, was that Austin had a clearer view of the meaning of the equality of saving and investment and the roles which it played in the analysis than perhaps even the author himself. He refers also to Keynes’s masterly and clear style in previous writings and deplores its comparative absence in The General Theory: ‘Many will sigh for the earlier Keynes who possessed in unusual bounty the gift of translating theoretical ideas into realities and conveying them in words of one syllable’ (ibid.). Austin himself uses plain language to good effect to describe the existence of the underemployment rest state and the process by which it may (or may not) be reached in the economy as a whole. His keen sense of industrial organisation is evident when he explains that the non-profitable levels of output as a whole away from the rest state mean that the positions are not sustainable, even in the short term.

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