ABSTRACT
This chapter focuses on the second basic feature of Keynes’s approach: namely, the view that the General Theory must be regarded as a kind of ‘theory of principle’. This view implies the rejection of the constructive method followed by Hicks in Value and Capital. It should be clear that the reason why this method is in contrast with the General Theory is not that Keynes rejects the analytical approach developed in the western scientific tradition-i.e. the description and interpretation of any object in terms of its simplest elements-as suggested, for example, by those who stress his critique of formalism (e.g. Carabelli 1988:153, 1991:120). As already noted, Keynes accepts the basic features of this scientific tradition. Moreover, the contrast is not due to the fact that he talks about ‘fallacies of composition’ or argues that ‘the whole is more than the sum of its parts’; as Hodgson (1988:69) pointed out, these claims are also made by many methodological individualists. The true reason for the contrast is instead that Hicks’s compositive method rules out Keynes’s alternative view of what constitutes the simplest elements of economic analysis. In line with Einstein’s field model, Keynes places the emphasis on aggregates rather than on representative agents as irreducible realities of economics. This implies an important change with respect to Hicks’s ‘pure theory’. As Keynes’s aggregates reflect his phenomenological view and thus imply reference to agents in their ordinary business life, the General Theory must be regarded as an instance of ‘theory of principle’ in that it does not ‘construct’ its object of analysis by first assembling the various parts (dealt with in logic of choice fashion) and then discussing the properties of the resulting ‘whole’. Instead, it focuses on these properties from the start, and then proceeds to analyse the individual parts. This important aspect of Keynes’s method can be analysed by referring once more to Einstein’s relativity theory. The latter too is a kind of ‘theory of principle’ which turns out to be in contrast with the constructive method underlying the mechanistic model.
