chapter  II
THE SOCIALISTS AND THE KEYNESIANS
Pages 16

THEopeningchapterofthisbookwasdevotedtoa criticismofclassicaleconomictheorieswhichmayappear tosomereaderstobehardlyworthcriticisingto-day, becausetheyhaveceasedtobeaccepted,atanyratein GreatBritain,bymanyeconomistswhoarehostileto socialistideas.Ifelt,however,thatitwasindispensable tobeginwithclassicalEconomics,notonlybecauseitwas asacritiqueoftheclassicaldoctrinesthatsocialist Economicsfirstdevelopedadistinctivecharacter,butalso becausetheclassicalconceptions,albeitinmodifiedforr.ts, arestillverymuchaliveto-day,aboveallintheUnited States,butalsoovermostofWesternEuropeandinthe morereactionaryacademiccirclesinGreatBritain.The labourtheoriesofvalueonwhichMarxbuilthiscritique oftheearlyclassicaleconomistshave,nodoubt,beenlong discardedbytheirsuccessors(except,curiously,inthe handlingbysomeofthemofthetheoryofinternational trade),andhavebeenreplacedbyvariousformsof marginalutilitytheory,derivedfromWalras,Jevons, MengerandMarshall.Theemphasisintheoriesofvalue, exceptamongtheMarxists,haslongbeenlaidonthe demandside,andtherewardsaccruingtothevarious factorsofproduction,ortotheirowners,havebeen regardedas·sharesinsalepricesdeterminedmainlyby thepurchasers'willingnesstopay.Buttheshiftinvalue theoryfromthesupplysidetothedemandside-orat anyrateto'pairofscissors'notionsinwhichmuchmore cuttingcapacityhasbeenattributedtothedemandblade thantothesupplyblade-hasnotfundamentallyaltered thegeneralshapeofeconomictheory-orhadnotdoneso umiltheadventofKeynesianeconomicsduringtheperiod

For this reason, it is still necessary to take account of a type of economics which, even among anti-socialists, is now current only among the more reactionary or out-ofdate exponents of the subject. But it is obviously no less necessary to consider the impact of newer ideas, and above all the extraordinary influence exercised by Keynes's General Theory of Employment, Interest and Money since its appearance in I 936.