From The Quarterly Journal of Economics, February 1937.

[Pagination from The Collected Writings of John Maynard Keynes, vol. XIV, pp. 109–123]

[Page 109] AFTER THE GENERAL THEORY

THE GENERAL THEORY OF EMPLOYMENT

By John Maynard Keynes

[Page 113]

The whole object of the accumulation of wealth is to produce results, or potential results, at a comparatively

distant, and sometimes indefinitely distant, date. Thus the fact that our knowledge of the future is fluctuating,

vague and uncertain, renders wealth a peculiarly unsuitable subject for the methods of the classical economic

theory. This theory might work very well in a world in which economic goods were necessarily consumed

within a short interval of their being produced. But it requires, I suggest, considerable amendment if it is to be

applied to a world in which the accumulation of wealth for an indefinitely postponed future is an important

factor; and the greater the proportionate part played by such wealth accumulation the more essential does

such amendment become.

By ‘uncertain’ knowledge, let me explain, I do not mean merely to distinguish what is known for certain from

what is only probable. The game of roulette is not subject, in this sense, to uncertainty; nor is the prospect of

a Victory bond being drawn. Or, again, the expectation of life is only slightly uncertain. Even the weather is

only moderately uncertain. The sense in which I am using the term is that in which the prospect of an

European war is uncertain, or the price of copper and the rate of interest twenty years hence, or the

obsolescence of a new

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invention, or the position of private wealth-owners in the social system in 1970. About these matters there is

no scientific basis on which to form any calculable probability whatever. We simply do not know.

Nevertheless, the necessity for action and for decision compels us as practical men to do our best to overlook

this awkward fact and to behave exactly as we should if we had behind us a good Benthamite calculation of a

series of prospective advantages and disadvantages, each multiplied by its appropriate probability, waiting to

be summed.

[Page 115]

… I accuse the classical economic theory of being itself one of these pretty, polite techniques which tries to

deal with the present by abstracting from the fact that we know very little about the future.