1. An “Unsettled Problem”

After presenting his own theory of interest, which he complacently calls “the general theory of the rate of interest,” Keynes devotes a chapter to a criticism of what he calls “The Classical Theory of the Rate of Interest,” together with an appendix to this chapter.

1. On Going Without Dinner

As we advance in the General Theory, the fallacies seem to be crowded in more tightly, and in Chapter 16, “Sundry Observations on the Nature of Capital,” they become particularly thick.

1. Speculative Anticipations are not “Interest”

Chapter 17 of the General Theory, “The Essential Properties of Interest and Money,” is dull, implausible, and full of obscurities, non sequiturs, and other fallacies. Even Alvin Hansen, Keynes’s leading American disciple, has written:

1. Economic Interrelationships

Keynes’s Chapter 18 is called “The General Theory of Employment Restated.” The “restatement” turns out to be confusion worse confounded.

On the assumption that “we have now reached a point where we can gather together the threads of our argument,” Keynes thinks “it may be useful to make clear which elements in the economic system we usually take as given, which are the independent variables of our system and which are the dependent variables” (p. 245).

1. Unemployment is Caused by Excessive Wage-Rates

If I were put to it to name the most confused and fantastic chapter in the whole of the General Theory, the choice would be difficult. But I doubt that anyone could successfully challenge me if I named Chapter 19, on “Changes in Money-Wages.”

1. An Unproved “Functional” Relationship

I hope I have not said it too often, but as we advance in the General Theory, the confusions and fallacies become progressively denser, and crowd up to a point where the task of disentangling the traffic snarl begins to look utterly hopeless.

1. “Costs” are Prices

1. A “Sudden Collapse” of the “Marginal Efficiency of Capital”?

Keynes begins his Chapter 22, “Notes on the Trade Cycle,” by telling us that if his theory of what determines the volume of employment is right, it “must be capable of explaining the phenomena of the Trade Cycle.” Though this chapter professes to be merely an application of the theories hitherto expounded, it actually adds many new errors.

1. “Let Goods be Homespun”

In his final chapter—“Concluding Notes on the Social Philosophy Towards Which the General Theory Might Lead”—Keynes really lets himself go. Here he assumes that all his previous propositions have been proved, and draws his triumphant and sweeping conclusions. This chapter, therefore, is even more tightly packed with fallacies and unwarranted deductions than any of the others.