Biography of an Idea: John Maynard Keynes and The General Theory of Employment, Interest and Money.

Is it possible to write yet another treatment of Keynes and The General Theory that actually is informative and interesting? David Felix, Professor of History Emeritus at the City University of New York, has written a book that delivers on both counts. Felix focuses on the development of the ideas that culminated in The General Theory (hereafter, GT). Of course, there is little newly plowed ground: all the usual sources are cited, from the Collected Works to the preceding biographies. But this book is different than other studies. For Felix, Keynes is not the larger than life subject of the book. Rather, the subject is how the ideas that eventually appeared as the GT evolved, both before and after its appearance. Felix does a masterful job in describing the gestation of the ideas that would become the GT.

The theme that weaves throughout the analysis is Keynes's constant attempt to persuade. For instance, Felix notes that the Treatise (published in 1930) failed, not because of its economics per se, but because it did not take head-on the causes of the depression that gripped Great Britain. Keynes's drive to have his theories used by policymakers to solve real life problems is partially illustrated by the title change of his 1931 Essays in Persuasion: it initially was Essays in Prophecy. Keynes always sought to persuade, and in writing the GT he would do just that. As Felix puts it, the theorizing in the GT was not meant to be an academic affair, but "a passionately pragmatic exercise meant to be mixed with politics and feelings in order to achieve that great change in action and affairs" [p. 127].

Felix not only details the evolution of the ideas that would appear as the GT, but also examines the debate that followed its publication. In the chapter "Defense," Felix juxtaposes the attacks of Henderson, Pigou, and Robertson on one side of the Atlantic, together with those of Viner, Leontief and Taussig on the other. Felix shows that Keynes muted his detractors not by defending the correctness of the GT, but by claiming an inability to make his ideas clear enough. Keynes also dismissed attacks on the GT by arguing that existing theory could not handle uncertainty and therefore was unable to solve the problems of the Depression. Even though this inability to deal with uncertainty applied equally to the GT, Keynes was undaunted: having dismissed existing theory, "Keynes then summarized The General Theory's major theses as correcting the neoclassical failings" [p. 220].

Felix reminds us that if the GT had been written by anyone else, it probably would not have been published and if it had, it would not have become a major component in the history of economic ideas. In his chapter "Conquest" Felix follows Keynes's as he uses his high-placed contacts in the United States to gain acceptance for his policies. With the way paved by Walter Lippman and Felix Frankfurter, Keynes influenced those around President Roosevelt, even if his impression on the president was not all too favorable. Regardless, the New Deal policies looked as if Keynes had written them himself. He took their success as vindication for this revolutionary theories.

The discussion of the conversion of U.S. economists is devastatingly good. Of Alvin Hansen, Felix notes that he took to the GT because of his "taste for empirics and . . . his tone deafness to theory; once he got the motor running smoothly he did not much care how or why" [p. 231]. Felix also highlights the role of Samuelson, whose Principles of Economics text spread the word to a younger generation. But, as Felix correctly notes, ". . . The General Theory and neoclassical economics disagree with each other absolutely on Say's Law, the law of supply and demand, and the conception of equilibrium. Samuelson (and his imitators) had simply put two contradictory theories between one pair of book covers" [p. 239]. At a higher level of conversion, the IS-LM framework took hold. Even though Hicks's little apparatus may not be letter-true to the core of the GT, it got across the main themes and soon became the tool of Keynesian analysis. The problem, however, is that "the diagram says nothing about prices, none of the student's manipulations could have inflationary effects, and so they are being indoctrinated into making false calculations that can have damaging results" [p. 236]. This would become all too clear during the 1970s.

Felix does not dwell on the theoretical failure of the Keynesian model, nor does he need to: Keynesianism won the day in making policy. Even so, Felix describes how Keynes began to distance himself from his interpreters. After World War II Keynes witnessed the culmination of this life's work, a theory that was to mix politics and feelings, being reduced to unemotional mathematical manipulations. The IS-LM analysis was not what the GT was all about. Perhaps more distressing to Keynes was how others used the theory, now really his in name only, to undermine the usefulness of the market economy that Keynes had always thought so highly of. While government interventionism was hailed as the logical outcome of the GT, Keynes was reminding the Political Economy Club in 1946 that the classical model "embodied some permanent truths of great significance" [p. 242]. At the end and probably during most of his life, Keynes did not advocate the wholesale disregard of the market mechanism as some of his more ardent followers would advocate. But the genie once released could not be returned to the bottle. While Keynes did not "suppose that the classical medicine will work by itself," he really never let go of his appreciation for capitalism and the workings of the market. What Felix shows us is that Keynes had not sought to overthrow the wisdom of Adam Smith, only to supplement it.

R. W. Hafer Southern Illinois University at Edwardsville