The General Theory I: The Dye of Expectations

The next two chapters explore sections of the theoretical foundations of the GT — its expectational basis, its conceptions of uncertainty, and its distinctive approach to behaviour and rationality. Several questions are involved here. What part does the cluster of concepts centred on expectations and uncertainty play in the GT? How significant is their role in the Keynesian revolution? What theoretical basis exists for the GT’s account of rational behaviour under uncertainty? And what differences are detectable in Keynes’s treatment of these matters before and after 1936? At some stage in their exposition, all economic theories, Neoclassical, Keynesian, Marxist or Austrian, advance propositions about the behaviour of economic agents. Such behaviour is normally taken to possess some relationship to rationality (however defined), and to involve expectations about the future. But beyond these generalities, disagreement reigns as to the appropriate analysis of such phenomena — their status as foundations, the nature of their conceptualisation, their relationship to probability, the manner of their formation and so on.2 In investigating Keynes’s account, we shall be exploring the reflections of a philosopher-economist who had thought deeply about a broad set of issues relevant to all economic frameworks.