John Maynard Keynes owes some of his central insights to Frank Ramsey a brilliant Cambridge polymath who died in 1930 at age 26
The implication is that a decentralized capitalist economy can fall short of employing all available resources, creating the need for the state to step in and “stabilize an unstable economy,” as the economist Hyman Minsky once put it.
Now, new biographies of each man have been published
In The General Theory, Keynes identifies the fundamental error of Say’s Law, which holds that supply creates its own demand, such that in equilibrium all resources must be fully employed.
Because savings decisions and investment decisions are not made by the same people, they cannot be automatically equated.
William H. Janeway Project Syndicate Aug 7, 2020
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