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There appear to be some distinctive similarities between Paul Douglas' 
(1934) Theory of Wages and Keynes' General Theory (1936). 
 
Among the similarities are: 
 
1. An assault on some of the assumptions of neoclassical marginal 
productivity theory.   
 
Keynes' (1936, chapter two) 'Postulates of Classical Economics' is similar 
in content and style to Douglas' (1934, chapter III)  'Postulates of the 
Marginal Productivity Theory'.   Douglas (1934, 70) sought to illuminate 
some of the "unconsciously implicit" neoclassical assumptions. So too did 
Keynes.   
 
Both Douglas (1934, 94) and Keynes (1936, 6, 17) emphasised that they were 
questioning only some of the assumptions of marginal productivity theory. 
Douglas (134, 95-6) argued that "the method of the marginal productivity 
school, as indeed of the entire school of orthodox economists, has 
described 
a portion of reality" but "it is dangerous to assume that the neat tidy 
world of the syllogism is in fact a picture of the real world.  This 
caution 
is applicable to physical sciences, but it is even more true in economic 
and 
social life".  Keynes (1936, 16) stated that "the classical theorists 
resemble Euclidian geometers in a non-Euclidian world … in truth, there is 
no remedy except to throw over the axiom of parallels and to work out a 
non-Euclidian geometry.  Something similar is required today in economics". 
2. The Quantitative Alternative 
Douglas (1934, 96) specifically recommended quantitative economics as the 
antidote to this methodological impasse.  Keynes argued (1936, 332) that 
the 
"excellently complete statistics now available in the United States" were 
available to illustrate aspects of the theory of the Trade Cycle .  Chapter 
6 of the unwritten Footnotes to the General Theory, was entitled 
'Statistical notes' (JMK XIV [1936], 134).    
 
3. Unemployment 
Douglas (1934, 70) noted that "One of the more remarkable features about 
the 
theoretical work of both the classical and neo-classical schools has been 
their failure to recognise the possibility of unemployment".  Keynes (1936, 
15) argued that "classical theory does not admit … the possibility of … 
'involuntary' unemployment".   
 
Has this been noted in the literature before? 
 
Robert Leeson 
Murdoch University 
  
 
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