respectable-looking english gentleman with trimmed moustache

John Maynard Keynes (1936)

The General Theory of Employment, Interest and Money

Written: 1935;
Source: The General Theory of Employment, Interest and Money by John Maynard Keynes, Fellow of the King's College, Cambridge, published by Harcourt, Brace and Company, and printed in the U.S.A. by the Polygraphic Company of America, New York;
First Published: Macmillan Cambridge University Press, for Royal Economic Society in 1936;
Transcribed for M.I.A., corrected and formatted by Andy Blunden;
This Edition: 2002.


“Our criticism of the accepted classical theory of economics has consisted not so much in finding logical flaws in its analysis as in pointing out that its tacit assumptions are seldom or never satisfied, with the result that it cannot solve the economic problems of the actual world.” [Chapter 24]



Book I

Chapter 1: The General Theory

Chapter 2: The Postulates of the Classical Economics

Chapter 3: The Principle of Effective Demand

Book II
Definitions and Ideas

Chapter 4: The Choice of Units

Chapter 5. Expectation as Determining Output and Employment

Chapter 6. The Definition of Income, Saving and Investment

Appendix on User Cost

Chapter 7. The Meaning of Saving and Investment Further Considered

Book III
The Propensity to Consume

Chapter 8. The Propensity to Consume: I. The Objective Factors

Chapter 9. The Propensity to Consume: II. The Subjective Factors

Chapter 10. The Marginal Propensity to Consume and the Multiplier

Book IV
The Inducement to Invest

Chapter 11. The Marginal Efficiency of Capital

Chapter 12. The State of Long-term Expectation

Chapter 13. The General Theory of the Rate of Interest

Chapter 14. The Classical Theory of the Rate of Interest

Appendix on the Rate of Interest in Marshall and Ricardo

Chapter 15. The Psychological and Business Incentives to Liquidity

Chapter 16. Sundry Observations on the Nature of Capital

Chapter 17. The Essential Properties of Interest and Money

Chapter 18. The General Theory of Employment Re-stated

Book V
Money-Wages and Prices

Chapter 19. Changes in Money-Wages

Appendix on Prof. Pigou's Theory of Unemployment

Chapter 20. The Employment Function

Chapter 21. The Theory of Prices

Book VI
Short Notes Suggested by the General Theory

Chapter 22. Notes on the Trade Cycle

Chapter 23. Notes on Merchantilism, the Usury Laws, Stamped Money and Theories of Under-consumption

Chapter 24: Concluding Notes on the Social Philosophy towards which the General Theory might Lead


“Whilst workers will usually resist a reduction of money-wages, it is not their practice to withdraw their labour whenever there is a rise in the price of wage-goods. It is sometimes said that it would be illogical for labour to resist a reduction of money-wages but not to resist a reduction of real wages. ... Moreover, the contention that the unemployment which characterises a depression is due to a refusal by labour to accept a reduction of money-wages is not clearly supported by the facts. [Chapter 2]