ABSTRACT
John Maynard Keynes’s book The General Theory of Employment, Interest and Money was published during an era of enormous economic and political upheaval. The economic downturn known as the Great Depression had produced a collapse in international trade and employment. Although many questioned the failures of the market economy during the Great Depression, the debate took place within traditional explanatory frameworks. Marxists highlighted the Great Depression as an example of the inherent instability of the market economy, and a reason for an economic and political revolution. In a broader sense Keynes addressed a key question of economics: what are the causes or determinants of economic output, growth, and employment? Keynes approaches the question by dealing first with the classical theory and its assumptions. He is especially critical of the theory that “supply creates its own demand.” Keynes claims that prolonged unemployment is not caused simply by the refusal of labor to accept lower wages.
