The Evolution of Keynes’s Views on Asset Markets and Speculation

For the earliest evidence on Keynes and speculation we turn to the lectures he gave in Cambridge before World War I. Complete notes in his hand for many of these courses are in the Keynes papers at King’s College. Two of these are particularly relevant to our concerns. First there is a series of lecture notes dated 1910 entitled “Modern Business Methods II.”1 Second, there is a set of notes for lectures Keynes gave over the years 1909 to 1914, titled “The Stock Exchange and the Money Market.”2 There is some overlap between the treatment in these two courses, but the general impression is that when it came to discussing the organization of the exchanges and speculation, Keynes relied heavily on Emery’s discussion in both, sometimes lifting whole passages from his book (with attribution) and for much of the rest paraphrasing him. In one sense Emery is taken as a source of the “facts” about the machinery of the exchanges. For example, consider the following characteristically cocksure remark by Keynes: These lectures will be extremely elementary, and only occasionally will any questions of intellectual difficulty arise. The greater part of them will be concerned with simple statements of fact, and to quite an appreciable extent with the explanation of the meaning of terms. A good deal of the apparent difficulty of stock exchange questions arises out of the unaccustomed terminology in which they are expressed.