444. J. M. Keynes to Harrod , 28 March 1935 [a]

[Follows on from 442 ]

Tilton, Firle, Sussex #

28 March 1935

Dear Roy,

I see the sort of thing you are driving at by round-aboutness, though I think you might find it difficult to make your definition precise. In fact, you really have two distinct things in mind, (1) a change in technical methods and (2) a change of demand in the direction of goods and services in the production of which capital plays a larger part.

But even if you can find a precise definition, what warrant have you for attributing this to the Austrians? If you will look at the articles in the Economic Journal for December 1933, [1] you will see some warrant for the view that the Austrians, in so far as they have any precise ideas, have been disposed to measure round-aboutness by amount of capital per head; in which case, increased round-aboutness is necessarily the same as an increase in investment.

I fancy, however, that the whole matter is extremely unfruitful, and only preserves a spurious significance, as long as one keeps one's ideas scrupulously unclear.

Yours ever,

J M Keynes

R.F. Harrod Esq., Christ Church, Oxford.

  1. 1. M. Hill, "The Period of Production and Industrial Fluctuations", and C. H. P. Gifford, "The Concept of the Length of the Period of Production", Economic Journal XLIII, December 1933, pp. 599-610 and 611-18 respectively.
    1. a. TLS, two pages on two leaves, in HP II-45. Reproduced by kind permission of the Provost and Scholars, King's College, Cambridge.


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