ABSTRACT
The environment in which the theoretical action is to take place is obviously of major importance, as the type of equilibrium posited will depend on it. The action in the General Theory takes place in an entrepreneur environment, in which the principle of effective demand dictates a state of rest in which the demand for labour is not necessarily equal to the supply of labour. Modern Ricardians argue that the supply and demand forces of provide too slender a foundation upon which to base economic analysis, since the forces leading towards supply-demand equality do not dominate the forces leading away from such an equality. Keynes’s alternative term for an entrepreneur economy is a money-wage economy. Apart from the entrepreneur economy and the co-operative economy, Keynes referred to a neutral entrepreneur economy. Hence Keynes’s so-called General Theory is nothing if not disequilibrium economics when viewed within a supply and demand framework which presupposes a co-operative environment.
