The Theory of a Monetary Economy
MONEY is the central concept in the economics of John Maynard Keynes. Viewing his work as a whole, this proposition seems hardly debatable. With respect to his general theory of employment, it may be less obvious, although the title of his book, The General Theory of Employment, Interest and Money, is primafacie evidence that money, along with interest, is the key to his explanation of employment. The present essay examines the hypothesis that the properties of money constitute the ultimate theoretical basis in Keynes' analysis for the tendency of the economic system to reach equilibrium at less than full employment. This idea is discussed in terms of the origin, evolution, exposition, evaluation and possible further development of what Keynes calls The Theory of a Monetary Economy, or alternately, A Monetary Theory of Production. Although the modern theory of income and employment was stimulated mainly by Keynes, it has departed from his primary emphasis on money. Consequently the present essay has meaning in relation to a clear distinction between Keynes' own theory and what is often referred to as Keynesian economics, that is, the modern theory of income and employment which uses Keynes' tools, in refined form, but departs from his fundamental thought, as here interpreted.