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Because of the passions that are stirred even by the mildest criticisms 
of John Maynard Keynes I am somewhat reluctant to buy into the question on 
the failure to cite but it does seem to me that Keynes in his General 
Theory is a clear case in point. There are two examples, one large and one 
of a lesser magnitude, but both are completely in character. In terms of 
documentation, both are discussed in my "Say's Law and the Keynesian 
Revolution" published last year by Elgar's. 
 
The large issue is in regard to the origin of Keynes's interest in Say's 
Law. The standard story, which Keynes not only never took the trouble to 
correct but in fact seemed to promote, was that he had come up with the 
idea to attack Say's Law on his own and then only afterwards discovered 
that others, most notably Malthus, had had the same idea before him. 
However, given the timing of his work on Malthus for the "Essays in 
Biography" - late 1932 - and his sudden interest in effective demand - 
early 1933 - it seems far more plausible that it was precisely because he 
had been reading Malthus that he then decided to refute Say's Law.  
 
I can, to some extent, see that Keynes would have felt genuine concern 
that writing a book openly in defence of the universally condemned notion 
of overproduction might have gone a long way towards discrediting his 
arguments in the eyes of fellow economists. But I think the more important 
reason was that he had a deep desire for originality and would not have 
wanted it understood that he had taken the central idea for his magnum 
opus from someone else.  
 
The second example of a failure to cite is in regard to the American 
economist, Harlan McCracken who had published "Value Theory and Business 
Cycles" in 1933. In a draft of Chapter 2 of the "General Theory", Keynes 
makes the following footnote statement in reference to a discussion of 
Marx: 
 
"Cf. H.L. McCracken, Value Theory and Business Cycles, [New York, 1933] 
p. 46, where this part of Marx's theory is cited in relation to modern 
theory." (CW XXIX: 81n) 
 
Compare the McCracken of "Value Theory and Business Cycles" to the Keynes 
of the General Theory. The following may be McCracken, but the sentiments 
are entirely Keynes's: 
 
"Could there be a General Overproduction?  To this question Ricardo's 
logic gives an emphatic 'NO!'... According to Ricardo the only source of 
demand for goods consisted of a supply of other goods. If everyone had an 
abundance of supply, then exchange would be easy, and society would revel 
in opulence.... A temporary maladjustment might be conceivable - a 
temporary shortage of certain goods - but never a general 
overproduction.... Ricardo could not conceive total demand and total 
supply out of proportion. In fact he took little notice of demand.... A 
business cycle positively could not happen in Ricardo's assumed economic 
world."  (McCracken 1933: 10-11) 
 
McCracken contrasted Ricardo with Malthus in a manner which is today 
quite familiar, but which was very unusual for the early 1930s: 
 
"Ricardo assumed demand, stating that due to the insatiable nature of 
human wants, demand was always present when the individual possessed a 
supply.... Malthus, on the other hand, was careful to point out that such 
was not the case. Exchange value might decrease even though supply 
increased, due to a failure in demand. And demand might fail either 
because of a voluntary failure of demand on the part of the rich who might 
prefer saving to spending, or from an involuntary failure of demand on the 
part of the poor who had keen wants but no purchasing power. To create 
exchange value or increase wealth there must be an increase in effective 
demand as well as in supply."  (Ibid.: 122) 
 
McCracken would also have alerted Keynes to the significance of providing 
a refutation of Say's Law. In a footnote dealing with Aftalion, McCracken 
emphasised how revolutionary such a refutation would be: 
 
"If Aftalion has succeeded in establishing the possibility of a voluntary 
failure of demand by those who have purchasing power but insufficient 
keenness of desire when facing expanded production under the influence of 
the principle of diminishing utility, then it constitutes one of the 
greatest contributions to economic theory in a generation. Say's Law of 
Markets, according to which production financed consumption and supply 
generated adequate demand is in serious need of modification."  (Ibid.: 
149n) 
 
To achieve "one of the greatest contributions to economic theory in a 
generation" would have been a powerful incentive to Keynes.  
 
It seems to me that the parallels between McCracken's "Value Theory and 
Business Cycles" and the "General Theory" are more than coincidence. 
Since we know that Keynes read McCracken during the period in which he was 
writing the early drafts of the "General Theory" and since the attitudes 
taken by the two are remarkably alike, I find it a near certainty that 
Keynes learned a good deal from McCracken. In my view, McCracken provides 
a crucial link between Keynes's personal discovery of Say's Law and the 
attitude he ultimately took to classical economics. McCracken is likely to 
have shaped the final polemical style of the General Theory, and in this 
way helped to create the intellectual environment which facilitated the 
Keynesian Revolution. I just find it interesting that when discussing Marx 
in the draft, Keynes provided McCracken as a footnote reference but not in 
his discussion of Malthus and Ricardo. That there is a profound 
intellectual debt, however, I have little doubt. 
 
Dr Steven Kates 
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