is owned and operated by the Economic History Association
with the support of other sponsoring organizations.

John Maynard Keynes

Author(s):Hayes, M. G.
Reviewer(s):Johnson, A. Reeves

Published by EH.Net (June 2020)

M. G. Hayes, John Maynard Keynes. Cambridge, UK: Polity Press, 2020. xv + 195 pp. $25 (paperback), ISBN: 978-1-5095-2825-7.

Reviewed for EH.Net by A. Reeves Johnson, Department of Economics, Maryville College.


Mark Gerard Hayes, formerly of Robinson College, Cambridge, was a post-Keynesian economist who committed his academic life to the study of John Maynard Keynes. In his preface to John Maynard Keynes, Hayes reminisces that his over forty-year study of Keynes eclipses the time Keynes spent in his own scholastic pursuits.

Having invested an effective lifetime to become one of the trusted expositors of Keynes’s economics, it’s hard to imagine someone better suited than Hayes to distilling the economics of Keynes to less than 170 pages (graphs and tables included, no less). Even so, as an analytical biography written for undergraduates with or without formal training in economics, Keynes is an ambitious project. Its primary object is not solely to introduce readers to Keynes, but, specifically, to reiterate Keynes’s critique of classical economics in accessible language. But, Hayes is a veritable authority on Keynes, and his many years of devotion to the subject materialize in a refusal to take shortcuts. It should come as no surprise, then, that the exposition is rigorous, and, for many undergraduates, unsparing.

I note here that reviewing this work through the lens of an academic and an instructor on Keynes offers too little scope. The value of Keynes is understood by its ability to inform its intended audience. Therefore, to fairly assess this book, I offer the following review with its target readership in mind.

Keynes sets out with a brief statement of purpose and summary of the book’s trajectory in the opening chapter. Hayes then delves into classical thought in the form of a corn model in Chapter 2. The core argument is familiar, although its representation may not be. Marginal products determine the respective rates of utilization and of remuneration of labor and capital as profit-maximizing farmers organize production under conditions of diminishing returns. Hayes credits David Ricardo with this theory of production and distribution, echoing the dubious “continuity thesis” implicit in The General Theory. In any case, this chapter will be tough going for students unacquainted with mainstream economics, but provides a necessary transition to Keynes’s mature thinking.

Chapter 3 naturally turns to The General Theory and offers a concise and careful exposition of the principle of effective demand. Keynes’s non-standard concept of demand as income expected from production is first defined in order to underscore two fundamental features absent in the classical model: the role of future expectations shaping present behavior and the monetary nature of economic activity.

Hayes’s unique approach to the principle of effective demand is well-suited for undergraduates due to his manner of making concrete what Keynes left as abstract. Two instances stand out. For one, Hayes takes Keynes literally by designating the short term as one day. This firmly places the argument in historical time, while also promoting greater conceptual clarity than conventional definitions of the short term admit.

What’s most instructive about Hayes’s approach, though, is his tripartite classification of business into employers, investors and dealers. Keynes’s aggregate demand-supply framework is a constant source of confusion due, in no small part, to its anti-Marshallian rendering of supply and demand in which business appears on both sides of the aggregate market. But Hayes’s expository device disentangles aggregate supply from aggregate demand by mapping employers onto the supply curve, and dealers and investors onto the demand curve. Further, dealers play the critical role in finding, or not, the point of effective demand. In a skillful delineation of the multiplier, dealers adjust their daily inventories by selling spot to meet the increasing consumer demand while buying forward to replenish inventories. Whether the point of effective demand is reached ultimately depends on the fulfillment of dealers’ medium-term expectations, which, as Hayes notes, is unlikely given the uncertainty of consumer demand.

Chapter 4 extends further into The General Theory by fixating on Say’s Law and hence the theory of interest. As in the preceding chapter, Hayes sets out again by fixing ideas. Saving is income not consumed; income is the money value of net output; and, in aggregate, saving takes the form of physical goods. As the rate of interest is the rate on loans of money, an assumption shared by both loanable-funds theorists and Keynes, and saving represents a physical quantity of goods, the rate of interest is a matter of the supply and demand of money.

Hayes addresses liquidity preference after an interlude into Keynes’s investment theory. Because of the interest-centric perspective adhered to, a result of an analytical narrative that puts Say’s Law into the foreground, investment serves as a mere backdrop to discuss liquidity preference. Hayes does briefly address fundamental uncertainty and its relation to investment decisions, but there’s no mention of the marginal efficiency of capital nor its relation to the rate of interest.

Perhaps more troublesome, though, and bearing in mind the intended audience, is that Hayes repeats Keynes’s inconsistent usage of “investor” in The General Theory to mean both buyer of newly produced capital assets and holder of money, debts and shares. This inconsistency engendered confusion among Keynes’s readers; to reproduce it in an introductory text comes off as negligent. It’s all the more unfortunate to find it in a chapter intended to reveal the confusion between money and saving.

Chapters 5 and 6 take as their theme Keynes’s “long struggle to escape from habitual modes of thought and expression,” and especially as this escape concerns monetary theory. Hayes moves swiftly through technical aspects from A Tract on Monetary Reform and A Treatise on Money. Allusions to recent financial events enliven the prose and interrupt the brisk pace of Hayes’s analytical exposition to give the reader an appreciated respite. Still, these chapters, and especially Chapter 5, beset the reader with a kind of textual vertigo. Hayes juxtaposes Keynes’s early work against The General Theory, while enduring ideas (e.g., on the nature of money as debt) are interspersed between the two. These deficiencies don’t detract from Hayes’s extension of the principle of effective demand into the international sphere in Chapter 6, which deserves praise.

The book’s final two chapters assess Keynes’s legacy. Free from the burdens of crafting an analytical narrative, these final chapters establish an organic flow. Chapter 7 begins with a statistical comparison of the “Keynesian Era,” roughly the years 1951-1973, against other historical periods. Despite Hayes’s penchant for statistical inference on the basis of descriptive statistics, his broad-brush comparisons nicely segue to a consideration of how Keynesian was Keynes. Keynes’s policy positions, as borne out by the textual evidence, are then compared to his subsequent followers. Would Keynes be an advocate of Modern Money Theory and support a job guarantee program for developed countries? Almost certainly not. Keynes agrees with post-Keynesians that monetary policy is a rather ineffective instrument to manage the economy, right? No. Keynes’s primary policy proposal was to keep long-term rates low to encourage private and public investment. Linking Keynes’s thoughts on policy to current debates will no doubt interest those navigating today’s landscape.

Chapter 8 continues to dispel popularly-held beliefs on Keynes’s thinking. Hayes deflates the most pervasive myth of Keynes as the figurehead of lavish, even reckless, government spending programs. The unappreciated nuance concerns the ends to which government borrows. While increased borrowing for consumption is likely inevitable during recession, these deficits should be recovered over the course of the upswing. For Keynes, there is no permanent role for government consumption, in contrast to government investment.

The shortcomings I’ve cited relate almost exclusively to the disparity between the book’s elevated content and its targeted readership. Though easily digestible at times, I fear this book is beyond the grasp of undergraduates without training in economics. It will draw interest from dedicated neophytes, advanced students and academics looking for a concise and honest appraisal of Keynes’s work. Indeed, unlike other treatments that reveal more about their authors than the subject (Hyman Minsky’s John Maynard Keynes comes to mind), Hayes’s faithfulness to Keynes’s economics may well irritate some post-Keynesians for its, at times, conservative tone; while intriguing New Keynesians and others to notice that their concerns and positions on critical policy matters share a likeness with Keynes’s.

With his final work, Hayes confronted the onerous task of consolidating an encyclopedia of knowledge. But his passion for the subject cannot be abridged. While Hayes’s Keynes marks an end to a life of dedicated scholarship, in turn, it may mark the beginning for its readers.


A. Reeves Johnson is an Assistant Professor of Economics at Maryville College and is currently researching the links between Alvin Hansen’s stagnation thesis and early business-cycle theory.

Copyright (c) 2020 by EH.Net. All rights reserved. This work may be copied for non-profit educational uses if proper credit is given to the author and the list. For other permission, please contact the EH.Net Administrator ( Published by EH.Net (June 2020). All EH.Net reviews are archived at

Subject(s):History of Economic Thought; Methodology
Geographic Area(s):Europe
Time Period(s):20th Century: Pre WWII
20th Century: WWII and post-WWII