ABSTRACT
This chapter reviews the Keynesian answer to the following problem: on the one hand, scarcity and rational behaviour should ensure that ‘full employment’ prevails—scarcity means that people's wants are not fully satiated and therefore they would like to consume more goods, therefore anybody who would be prepared to work to help produce those goods should be able to find employment; on the other hand, how can we account for ‘the “obvious” large-scale divergences… (from full employment)… that we think we see, especially in prolonged depressions?’. 1 The reason for the quotation marks round the adjective ‘obvious’ will become apparent in the course of this book.
