On the “Generality” of the General Theory. Or Why Keynes Lost His Battle and What to Do to Re-win It Again

Abstract

The paper emphasizes the true “generality” of the General Theory (GT) in the face of the dominant view, according to which Keynes’s theory is captured by “Keynesian outcomes” in axiomatic general equilibrium models due to market imperfections. However, it argues that the advocates of generality must make a serious effort to re-conceptualize the GT in a very broad perspective. One must understand both its limitations and why the generality debate after the GT has failed to reconsider it in a proper way and what to do to restore Keynes’s generality claim in the present context. This paper’s contribution is twofold. The first is to make a distinction between three different dimensions of the generality issue and suggest that Keynes failed to grasp their full significance because he was facing the Marshallian orthodoxy, rather than general equilibrium. The second contribution is to suggest that one way to restore Keynes’s generality claim is to stress that he belongs to an alternative paradigm that has several features in common with contemporary modernist revolution and with Einstein’s relativity theory in particular.