580. Harrod to J. M. Keynes , 24 August 1936 [a]

[Answered by 581 ]

Christ Church, Oxford

24 August 1936

Dear Maynard

The enclosed [1] is what I propose to say about you to the Econometricians on Sept. 25. [2] I should be very glad to hear if you think there are any gross mis-representations.

I shall preface the paper by explaining (i) that you are in no way responsible for my interpretation and might not accept it, (ii) that my paper is a very free-hand sketch, stressing what seems to me important and not what might seem to you, not even what I think would seem to you, important in your contribution and (iii) that in half an hour's discourse I have perforce left many definitions very rough and ready and that those who have not read your book must understand that they will find far greater precision in it than in my sketch.

I am most interested to know how this appeals to you.

I still feel that something of this sort, a re-statement in different terminology, is needed to make some people (cf. Pigou in Economica) [3] appreciate that there is more in the General Theory for them to cogitate upon than they have yet tumbled to. It was something of this sort--perhaps more polished--that I had in mind for E.J. I should of course omit the cryptic references to dynamic economics in the last paragraphs, as they foreshadow something of what is due to appear next month. [4]

Yours

Roy.

  1. 1. A draft of "Mr. Keynes and Traditional Theory" (Harrod 1937:4 ) (details are given in source note a to this letter). The draft is essentially similar to the published version, except for the following passages:

    The first sentence of the first full paragraph on p. 79 of the published version substitutes the following passage: "I do not wish to give my final blessing to the liquidity preference equation. I am mainly concerned with the content, not the justification, of Mr. Keynes' doctrines" (Ts, p. 9).

    P. 81, line 17 of the published version: the words "and income" do not appear in the Ts (p. 13 last line).

    P. 82, second full paragraph, sentence beginning "This determination ...": the words "...by the factors' money supply schedules, and by ..." substitute the words "...by the factors' supply schedules, whatever their forms, and by ..." (Ts, p. 16).

    P. 83: the second full paragraph substitutes the following on pp. 17-18 of the Ts:

    • May I put the matter in a way the vividness of which may, I hope, atone for its crudity. The saving/interest equations say to the general field, we can tell you what the level of activity will be if you tell us how much money is needed for active trade. To which the general field replies, we can tell you how much money will be needed for active trade, if you tell us what the level of activity will be. Thus there is after all mutual dependency. The level of activity will be such that so much money is absorbed in active trade that the amount left over enables interest to stand at a rate which will be consistent with that level of activity.

    P. 85, last paragraph: the second sentence (lines 1 and 2 from bottom) substitutes the following passage: "I do not myself feel any disposition to kick against the pricks or revert to the traditional modes of thought. Rather I feel that further re-adjustment is necessary. The fault of Mr. Keynes's system, in my judgement, is that it is still static." (Ts, p. 21)

    P. 86: the first paragraph was shortened by eliminating the following sentences at the end: "It has been suggested that this emphasis on the effect of anticipations is the most important single point in Mr. Keynes' re-orientation. While I do not concede that it is the most important, I agree that it is a very important point." ( Ts p. 22).

    2. Harrod's paper was read on 26 September 1936 at the Oxford meeting of the Econometric Society, held at New College from 25 to 29 September. During the same session, dedicated to "Mr. Keynes's System", Meade read a paper on "A Simplified Model of Mr. Keynes's System", while Hicks presented his "Mr. Keynes and the `Classics'; A Suggested Interpretation". See "Report of the Oxford Meeting", by H. Phelps Brown, in Econometrica 5, October 1937, pp. 361-83.

    3. A. C. Pigou, "Mr. J. M. Keynes' General Theory of Employment, Interest and Money", Economica III (NS):10, May 1936, pp. 115-32.

    4. The passages were not omitted from the published version: see "Mr. Keynes and Traditional Theory" (Harrod 1937:4 ), pp. 85-86. The forthcoming writing was The Trade Cycle ( 1936:8 ).

    1. a. ALS, one page, in JMK GTE/2/2/40, accompanying a 22 pages TCc with corrections in Harrod's hand of "Mr. Keynes and Traditional Theory", in JMK GTE/2/2/41-63. The letter is printed in Keynes, Collected Writings, vol. XIV, pp. 83-84.


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