Treatise On Money V1: The Pure Theory Of Money (1930)

"I conceive, therefore, that a somewhat comprehensive socialization of investment will prove the only means of securing an approximation to full employment; though this need not exclude all manner of compromises and of devices by which public authority will co-operate with private initiative" Keynes' GT argues that the classic theory of laissez-faire is actually a rare case. His general theory, that a capitalist economy is unstable due to the inherent flaws of capitalism, is the normal condition. An objective of full employment, through monetary and fiscal policy, will alleviate the curse of depressions and major recessions. By allowing government control of output his theory has saved capitalism from demise. It is unfortunate that Keynes' name is used in a modern sense to support actions which he directly refutes in the GT. A must read for anyone interested in the GT is Hyman Minsky's 'Stabilizing an Unstable Economy'. Sidenote: The BN edition of the GT is terrible. I ordered the hardcover edition to have a permanent reference. This edition has numerous typos, nearly unreadable tables, awkward physical dimensions, and Keynes' internal citations do not line up with BN's pages. Also, for some reason the last paragraph in some chapters are a different font. It is possible that it was an update by Keynes but no clue is given in the book. Not even the original date of publication is given. Avoid the BN edition if possible.

A lot of "Kindle" books are not produced and formatted for the Kindle and as a result they are very difficult to read and navigate -- especially for a non-fiction book like Keynes' "General Theory". I wanted to focus specifically on reviewing this book as a Kindle edition. Clearly, the best version of "General Theory" for the Kindle is from Signalman Publishing which has produced and formatted Keynes' works specifically for the Kindle. This version includes a hyper-linked Table of Contents and is fully footnoted with all notes hyper-linked within the text. Additionally, all the equations include the Greek character set as displayed in the original version (something that other Kindle versions either do not have or incorrectly display the equations). If you are going to read Keynes on your Kindle, save yourself a lot of grief and get a version that will correctly display and navigate for you on your Kindle.

A classic, definitely not an easy read. Keynes brings his economic phillosphies into the light. Not the kindest author but his chapter The Marginal Efficiency of Capital is epic and relivent today. Published in 1936, this book stands the test of time and allows you to develop a mental model of numerous business cycles. Who's reading Keynes? Warren Buffet, he quotes Keynes like everyone else quotes Shakespeare.

Sitting here is Baghdad, one hears often a simple solution to the counter insurgency problem. Usually it's some combination of winning hearts and minds and killing terrorists. The solution may be closer to burying money in the sand. That idea came from John Maynard Keynes who faced far larger problems than the war in Iraq. It's been 21 years since I read Keynes' General Theory, eighty years since it was first published. (My Econ department believed in teaching both major economic choices of the day: Capitalism and Communism. So I got some look at both.) What sold me on Keynes was his General Theory. What turned me against Marxism were my visits to Eastern Block countries where I could see its effect...on the economy and on humanity. There is a heart inside Keynes book, the General Theory, the same heart that wrote The Economic Consequences of the Peace. Keynes does get blamed for failed economic policies of those Keynesians of the sixties and seventies who believed they could tinker the economy into perfection. Mistrust developed in Keynes General Theory. But when I read his book, from start to finish, I came to the conclusion that people just didn't finish the book. They must have skipped over the second half to believe you could just spend your way to prosperity or reverse bad times with clever monetary policy. His theory has worked for 80 years. The book may not be for you, but it is a masterpiece, something to be savored as the seminal work which transformed Classical Economics at a time when the world needed saving, when the alternative, Marxism, which stole the heart of half the globe, but would prove capable only of impoverishing and dehumanizing. The world owes more the Keynes than it acknowledges. If you love the history of ideas, it's a must read or at least it adds a credibility to your library which a select few can appreciate.

Most of the reviews above are political diatribes against Keynes and his central conclusion that expanded government involvement is necessary in the economy for stabilization purposes. The key to understanding Keynes is the notion that at particular times in the business cycle, an economy can become over-productive (or under-consumptive) and thus, a vicious spiral is begun that results in massive layoffs and cuts in production as businesses attempt to equilibrate aggregate supply and demand. Thus, full employment is only one of many or multiple macro equilibria. If an economy reaches an underemployment equilibrium, something is necessary to boost or stimulate demand to produce full employment. This something COULD be business investment but because of the logic and individualist nature of investment decisions, it is unlikely to rapidly restore full employment. Keynes logically seizes upon the public budget and gov't. expenditures as the quickest way to restore full employment. Borrowing the money to finance the deficit from private households and businesses is a quick, direct way to restore full employment while at the same time, redirecting or siphoning off the funds from the private sector which caused the over-production in the first place. Although difficult to read, this book is essential to our understanding of modern economics. Far from being destructive, it alone has been responsible for nearly 60 years of growth without a major depression as we experienced worldwide in the 1930's. I recommend you read this book.