ABSTRACT
Keynes’s revolutionary theoretical proposition is that “the economic system may find itself in stable equilibrium at a level below full employment”. “Keynes,” in the interpretation offered by Leijonhufvud, “departed from the postulates of Classical doctrine on only one point. His model is characterized by the absence of a “Walrasian auctioneer” assumed to furnish, without charge and without delay, all the information needed to obtain the perfect coordination of the activities of all traders”. Leijonhufvud takes as his “point of departure” “the standard illustration of the hypothetical Walrasian auction process. Discrepancies between planned and actual transactions are always liable to occur during the process of response to economic change. A “dualdecision hypothesis” can be used equally well to explain the repercussions following a change in the demand for cornflakes. The market is a channel of communication between consumers and producers. Central planners who believe they can do just as well suffer from what Hayek calls “the fatal conceit” of Socialism.
