Book Review: The General Theory of Employment, Interest and Money by John Maynard Keynes
Who am I to judge one of the most important text of the 20th century? In all honesty, GTEIM is one of the most difficult books I’ve ever read, and it is a frustrating read because I am a layman and not an economist, the target audience of this book. My proper education in economics is a couple of units in business school and my year 10 class with Mr Oeding, who preached that wars help economies (I find out later that this isn’t really the case).
What happened in 2008 triggered an interest in me to find out how money works, but the deeper you dive into the idea of money, the more subjective the idea becomes. The concept of money becomes in effect, more abstract. The idea of money is still abstract back in the 1920s when Keynes were still developing his ideas, sparring with the Austrians and dealing with the Great Depression that took countries down in the late 20s.
By 1933, Keynes ideas have crystallised and his thoughts are transposed in GTEMI. It is an academic text for academics, but his hopes are that eventually, the text will be accessible for a wider audience. It is hard to pin down ideas that strike me in the book — the ideas are familiar from my economics courses, although the terminology may be different. Over the years, Keynesian ideas are better represented in graphs digestible in courses and even YouTube videos, but it is challenging to imagine to conceptualise his ideas in your head.
The question for the layman becomes then, is it worth reading when there are other resources available that can summarise this for you in 30 minutes or less? That depends. In my case, I love to read and I do put the classics in a pedestal. In my extreme, the only way to respect the classics and influential ideas is to go back to the original text.
Nevertheless, I still loved reading Keynes — it took me almost three weeks to finish GTMEI and the CotP, I had to reread and re-explore ideas that confused me. I’m still not sure how savings equal investment, and the implications of the schedule of marginal efficiency of investment on employment. But when I grasped a concept, and held on to it, my brain was in euphorics.
Keynes was way ahead of his time. Although he didn’t take down the classical concepts of economics, he managed to poke holes in Ricardo and Pigou’s ideas — blokes who won prizes in economics. Keynes is still relevant today, his ideas are still contested by his successors in Stiglitz and Krugman against the followers of the Boston School. The ideas of increased fiscal spending to stimulate growth has perhaps saved America from the Great Depression via the New Deal, but those ideas are still being played out in how much governments are borrowing and pumping money by quantitative easing in the past dozen years.
Equally interesting in the book is Consequences of the Peace, which read more as a historical text than an academic text. Keynes pulled no punches in criticising the Allies infringing on the economic freedom of the defeated German empire. Where an economic cooperation was needed more than ever, European greed eventually cornered Germany to give birth to something desperate in fascism. Keynes was right all along.
No, GTMEI is not for everybody, but if you like your economics and this part of history fascinates you then it is worth reading.
