the collected writings of
JOHN MAYNARD KEYNES
Managing Editors:
Professor Austin Robinson and
Professor Donald Moggridge
John Maynard Keynes (1883–1946) was without doubt one of the most influential thinkers of the twentieth century. His work revolutionised the theory and practice of modern economics. It has had a profound impact on the way economics is taught and written, and on economic policy, around the world. The Collected Writings of John Maynard Keynes, published in full in electronic and paperback format for the first time, makes available in thirty volumes all of Keynes’s published books and articles. This includes writings from his time in the India Office and Treasury, correspondence in which he developed his ideas in discussion with fellow economists and correspondence relating to public affairs. Arguments about Keynes’s work have continued long beyond his lifetime, but his ideas remain central to any understanding of modern economics, and a point of departure from which each new generation of economists draws inspiration.
A Treatise on Money, completed in 1930, was the outcome of six years of intensive work and argument with D. H. Robertson, R. G. Hawtrey and others. As in the Tract on Monetary Reform the central concerns of the Treatise are the causes and consequences of changes in the value of money and the means of controlling such changes to increase well-being. The analysis is, however, considerably more complex and the applied statistical work much more elaborate. The Treatise has long been of interest amongst economists, as a precursor of the General Theory, as an important discussion of the mechanics of inflationary and deflationary processes and as an important statement of the problems of national autonomy in the international economy. This edition provides a new edition of the original, corrected on the basis of Keynes’s correspondence with other economists and translators. It also provides the prefaces to foreign editions.
CONTENTS
General Introduction page ix
Editorial Foreword xiv
Author's Preface xvii
Special Prefaces to German and Japanese editions xx
VOLUME 1
THE PURE THEORY OF MONEY
BOOK I
THE NATURE OF MONEY 1 THE CLASSIFICATION OF MONEY 3
2 BANK MONEY 20
3 THE ANALYSIS OF BANK MONEY 30
BOOK II
THE VALUE OF MONEY
4 THE PURCHASING POWER OF MONEY 47
5 THE PLURALITY OF SECONDARY PRICE LEVELS 58
6 CURRENCY STANDARDS 68
7 THE DIFFUSION OF PRICE LEVELS 79
8 THE THEORY OF COMPARISONS OF PURCHASING POWER 85
BOOK III
THE FUNDAMENTAL EQUATIONS
9 CERTAIN DEFINITIONS page III
10 THE FUNDAMENTAL EQUATIONS FOR THE VALUE OF MONEY 120
11 THE CONDITIONS OF EQUILIBRIUM 136
12 THE DISTINCTION BETWEEN SAVINGS AND INVESTMENT 154
13 THE 'MODUS OPERANDl' OF BANK RATE 166
14 ALTERNATIVE FORMS OF THE FUNDAMENTAL EQUATIONS 198
BOOK IV
THE DYNAMICS OF THE PRICE LEVEL
15 THE INDUSTRIAL CIRCULATION AND THE FINANCIAL CIRCULATION 217
16 A CLASSIFICATION OF THE CAUSES OF A DISEQUILIBRIUM OF PURCHASING POWER 231
17 CHANGES DUE TO MONETARY FACTORS 235
18 CHANGES DUE TO INVESTMENT FACTORS 248
19 SOME SPECIAL ASPECTS OF THE CREDIT CYCLE 263
20 AN EXERCISE IN THE PURE THEORY OF THE CREDIT CYCLE 274
21 CHANGES DUE TO INTERNATIONAL DISEQUILIBRIUM 293
Appendix 1 PRINTING ERRORS IN THE FIRST EDITION 327
Appendix 2 DEFINITION OF THE UNITS EMPLOYED page 329
(i) Note by Alvin H. Hansen;
(ii) Note by J. M. Keynes;
(iii) Note by R. F. Kahn Appendix j COMPARATIVE INDEX TO FIRST EDITION AND NEW SETTING OF VOLUME I 332
VOLUME 2
THE APPLIED THEORY OF MONEY
BOOK V
MONETARY FACTORS AND THEIR
FLUCTUATIONS
22 THE APPLIED THEORY OF MONEY 3
23 THE PROPORTION OF SAVINGS DEPOSITS TO CASH DEPOSITS 6
24 THE VELOCITIES OF CIRCULATION 17
25 THE RATIO OF BANK MONEY TO RESERVE MONEY 43
26 THE ACTIVITY OF BUSINESS 70
BOOK VI
THE RATE OF INVESTMENT AND
ITS FLUCTUATIONS
27 FLUCTUATIONS IN THE RATE OF INVESTMENT—
I. FIXED CAPITAL 85
28 FLUCTUATIONS IN THE RATE OF INVESTMENT—
II. WORKING CAPITAL 91
29 FLUCTUATIONS IN THE RATE OF INVESTMENT— III. LIQUID CAPITAL page Il6
30 HISTORICAL ILLUSTRATIONS I32 BOOK
VII
THE MANAGEMENT OF MONEY
31 THE PROBLEM OF THE MANAGEMENT OF
MONEY 189
32 METHODS OF NATIONAL MANAGEMENT—I.
THE CONTROL OF THE MEMBER BANKS 201
33 METHODS OF NATIONAL MANAGEMENT—II.
THE REGULATION OF THE CENTRAL RESERVES 234
34 PROBLEMS OF INTERNATIONAL MANAGEMENT—
I. THE RELATIONS OF CENTRAL BANKS TO ONE ANOTHER 249
35 PROBLEMS OF INTERNATIONAL MANAGEMENT—
II. THE GOLD STANDARD 258
36 PROBLEMS OF INTERNATIONAL MANAGEMENT—
III. THE PROBLEM OF NATIONAL AUTONOMY 27O
37 METHODS OF NATIONAL MANAGEMENT—
III. THE CONTROL OF THE RATE OF
INVESTMENT 304
38 PROBLEMS OF SUPERNATIONAL MANAGEMENT 348
Appendix 1 PRINTING ERRORS IN THE FIRST
EDITION 368
Appendix 2 COMPARATIVE INDEX TO FIRST
EDITION AND NEW SETTING OF VOLUME 2 370
Index 377
GENERAL INTRODUCTION
This new standard edition of The Collected Writings of John Maynard Keynes forms the memorial to him of the Royal Economic Society. He devoted a very large share of his busy life to the Society. In 1911, at the age of twenty-eight, he became editor of the Economic Journal in succession to Edgeworth; two years later he was made secretary as well. He held these offices without intermittence until almost the end of his life. Edgeworth, it is true, returned to help him with the editorship from 1919 to 1925; Macgregor took Edgeworth's place until 1934, when Austin Robinson succeeded him and continued to assist Keynes down to 1945. But through all these years Keynes himself carried the major responsibility and made the principal decisions about the articles that were to appear in the Economic Journal, without any break save for one or two issues when he was seriously ill in 1937. It was only a few months before his death at Easter 1946 that he was elected president and handed over his editorship to Roy Harrod and the secretaryship to Austin Robinson.
In his dual capacity of editor and secretary Keynes played a major part in framing the policies of the Royal Economic Society. It was very largely due to him that some of the major publishing activities of the Society—Sraffa's edition of Ricardo, Stark's edition of the economic writings of Bentham, and Guillebaud's edition of Marshall, as well as a number of earlier publications in the 1930s—were initiated.
When Keynes died in 1946 it was natural that the Royal Economic Society should wish to commemorate him. It was perhaps equally natural that the Society chose to commemorate him by producing an edition of his collected works. Keynes himself had always taken a joy in fine printing, and the Society, with the help of Messrs Macmillan as publishers and the Cambridge University Press as printers, has been anxious to give Keynes's writings a permanent form that is wholly worthy of him.
The present edition will publish as much as is possible of his work in the field of economics. It will not include any private and personal correspondence or publish letters in the possession of his family. The edition is concerned, that is to say, with Keynes as an economist.
Keynes's writings fall into five broad categories. First there are the books which he wrote and published as books. Second there are collections of articles and pamphlets which he himself made during his lifetime (Essays in Persuasion and Essays in Biography). Third, there is a very considerable volume of published but uncollected writings—articles written for newspapers, letters to newspapers, articles in journals that have not been included in his two volumes of collections, and various pamphlets. Fourth, there are a few hitherto unpublished writings. Fifth, there is correspondence with economists and concerned with economics or public affairs. It is the intention of this series to publish almost completely the whole of the first four categories listed above. The only exceptions are a few syndicated articles where Keynes wrote almost the same material for publication in different newspapers or in different countries, with minor and unimportant variations. In these cases, this series will publish one only of the variations, choosing the most interesting.
The publication of Keynes's economic correspondence must inevitably be selective. In the day of the typewriter and the filing cabinet and particularly in the case of so active and busy a man, to publish every scrap of paper that he may have dictated about some unimportant or ephemeral matter is impossible. We are aiming to collect and publish as much as possible, however, of the correspondence in which Keynes developed his own ideas in argument with his fellow economists, as well as the more significant correspondence at times when Keynes was in the middle of public affairs.
Apart from his published books, the main sources available to those preparing this series have been two. First, Keynes in his will made Richard Kahn his executor and responsible for his economic papers. They have been placed in the Marshall Library of the University of Cambridge and have been available for this edition. Until 1914 Keynes did not have a secretary and his earliest papers are in the main limited to drafts of important letters that he made in his own handwriting and retained. At that stage most of the correspondence that we possess is represented by what he received rather than by what he wrote. During the war years of 1914-18 Keynes was serving in the Treasury. With the opening in 1968 of the records under the thirty-year rule, many of the papers that he wrote then and later have become available. From 1919 onwards, throughout the rest of his life, Keynes had the help of a secretary—for many years Mrs Stephens. Thus for the last twenty-five years of his working life we have in most cases the carbon copies of his own letters as well as the originals of the letters that he received.
There were, of course, occasions during this period on which Keynes wrote himself in his own handwriting. In some of these cases, with the help of his correspondents, we have been able to collect the whole of both sides of some important interchange and we have been anxious, in justice to both correspondents, to see that both sides of the correspondence are published in full.
The second main source of information has been a group of scrapbooks kept over a very long period of years by Keynes's mother, Florence Keynes, wife of Neville Keynes. From 1919 onwards these scrapbooks contain almost the whole of Maynard Keynes's more ephemeral writing, his letters to newspapers and a great deal of material which enables one to see not only what he wrote, but the reaction of others to his writing. Without these very carefully kept scrapbooks the task of any editor or biographer of Keynes would have been immensely more difficult.
The plan of the edition, as at present intended, is this. It will total thirty volumes. Of these, the first eight are Keynes's published books from Indian Currency and Finance, in 1913, to the General Theory in 1936, with the addition of his Treatise on Probability. There next follows, as vols. ix and x, Essays in Persuasion and Essays in Biography, representing Keynes's own collections of articles. Essays in Persuasion differs from the original printing in two respects; it contains the full texts of the articles or pamphlets included in it and not (as in the original printing) abbreviated versions of these articles, and it also contains one or two later articles which are of exactly the same character as those included by Keynes in his original collection. In Essays in Biography, there have been added a number of biographical studies that Keynes wrote both before and after 1933.
There will follow two volumes, xi and xii, of economic articles and correspondence, and a further two volumes, already published, XIII-XIV, concerning the development of his thinking as he moved towards the General Theory. There are included in these volumes such part of Keynes's economic correspondence as is closely associated with the articles that are printed in them. A supplement to the volumes, xxix, will print some further material relating to the same issues, which has since been discovered.
The following thirteen volumes deal with Keynes's Activities during the years from the beginning of his public life in 1905 until his death. In each of the periods into which we propose to divide this material, the volume concerned publishes his more ephemeral writings, all of it hitherto uncollected, his correspondence relating to these activities, and such other material and correspondence as is necessary to the understanding of Keynes's activities. These volumes are edited by Elizabeth Johnson and Donald Moggridge and it has been their task to trace and interpret Keynes's activities sufficiently to make the material fully intelligible to a later generation. Elizabeth Johnson has been responsible for vols. xv-xvm, covering Keynes's earlier years and his activities down to the end of.....
