577. D. H. Robertson to Harrod , 22 July 1936 [a]

[Follows on from 576 ]

Trinity [College, Cambridge]

22 July 1936

My dear Roy,

Many thanks for your so prompt reply, duly received (thanks no doubt to the thoughtful omission of Esq!) at St. Anton. I was elated to think that I could still get something right: but alas Sraffa has now shown me that it is not so, and that according to her own logic JR is correct. [1] For if the unemployed man spends 1/5 of 10/- more at the grocer's than the regular tobacconist did, 4/5 being the latter's and the grocer's and everybody else's "marginal propensity to consume", that 2/- per week will, after an interval, become transformed into 10/- per week, and all be well! I think JR's way of putting it on p. 230 is very misleading, and her suggestion on p. 227 that there is no change in "effective demand" positively wrong. But my little story is presumably open to the above reply,--so the note must perish!

My monetary puzzle is solved by the reflection that, if we were in equilibrium (at a low level) to start with, there must have been a weekly act of dishoarding going on somewhere equal to the tobacconist's weekly hoarding, and that according to the assumptions of the whole way of thought, this act will still go on unaffected by the cessation of the tobacconist's hoarding, thus injecting money into the circuit.

I'm afraid the only result is to increase my distrust of the "multiplier", which seems to assume such queer things and to leave out so much. But I will try not on that account to be prejudiced against your book! Certainly I shall not be prejudiced against it because it looks for real causes behind the monetary ones,--of that I heartily approve.

Yes, I agree that is the right attitude to take about JMK's or any other book, though it is not easy here in face of the widespread campaign of proselytisation. My trouble is that while I have a limited sympathy with some of the conclusions, I don't find the concepts helpful,--neither the multiplier nor l[iquidity]. p[reference].--that monstrous portmanteau!--nor the assumption of the continuous fulfilment of short-period equilibrium. I have made about 10 attempts to put down some of my difficulties in writing: I don't know whether I shall ever succeed. [2] I find the whole situation very saddening and completely inhibiting: let us hope good will come out of it in the end.



  1. 1. Refers to Joan Robinson, "Disguised unemployment", Economic Journal XLVI, June 1936, pp. 225-37.

    2. Robertson eventually reviewed Keynes's book for the Quarterly Journal of Economics ("Some Notes on Mr. Keynes' General Theory of Employment", 1936).

    1. a. ALS, two pages on one leaf, in HP IV-990-1069d/41.

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