John Maynard Keynes

by Paul Davidson

Davidson is a bit of a lonely pioneer. His book on Keynes is a straight, honest, succinct statement of what Keynes was about and it has the great merit of putting uncertainty at the centre of Keynesian theory. This was something people ignored even when Keynes was at the height of his popularity. Why? Because people don’t like uncertainty. Mainstream economists think that people have correct expectations about the future. It’s mad really if you think about it. But Davidson held fast and has, I think, been vindicated. When an economy has a big shock people don’t redirect their spending, they stop spending.