ABSTRACT
The crisis of 1929 and the Great Depression provided the “raison d'être” for the General Theory: to show that a competitive economy cannot guarantee full employment and that its “normal fate” is to be trapped in “underemployment”; i.e. a real incentive for classical economists “to re-examine critically certain of their basic assumptions” so that economic theory regains “the practical influence.” The “Keynes model” then mobilizes four lemmas (L) that lead to two demonstrations (D): L1. An economy of decisions in an uncertain and risky future; L2. An economy of effective demand; L3. An economy of involuntary unemployment; L4. An economy of money and interest; hence D1. The stable and lasting state of underemployment; D2. The effectiveness of economic policies in approximating full employment. The General Theory then functions as “the theory of a system in which changing views about the future are capable of influencing the present situation […] Or we can pass from this simplified propaedeutic to the problems of the real world in which our previous expectations are liable to disappointment and expectations concerning the future affect what we do to-day” where money and “durable equipment” provide “a link between the present and the future.”
