Chapter dzDz: Hutt and Keynes ȀȇȆvanguard of the profession. Keynes’s theory had political appeal. It came
as a rationalization (whether sound or unsound) of policies that would
have been beneficial under the exceptional circumstances of the mid-ȀȈȂǿs.
Hutt, though, was recommending micro-oriented policies that would
have stepped on toes and whose desired benefits would not have come
quickly.
Hutt always maintained that he was expounding old, orthodox doc-
trine; but, although alluding to Edwin Cannan and the London School
tradition, he did not build on his predecessors’ work in adequate detail,
and he neglected to forge links with pre-Keynesian monetary-disequilib-
rium theory. So he put himself at a double-barreled disadvantage—con-
fessing that his message was basically old stuff, while not clearly show-
ing how he was extending it. Keynes’s theory, in contrast, appealed to
academic economists by containing concepts and gimmicks offering pos-
sibilities for research and publication, for class lectures and examination
questions. (On this matter of the internal dynamic of a field of study, see
ColanderȀȈȇȅ.)
ŠŔő őŚŐšŞŕŚœ ŢōŘšő śŒ ŔšŠŠ ’ş řőşşōœő
Although I do think that Hutt created unnecessary difficulties for its accep-
tance, I do not mean to disparage his message itself. Apparent macro disor-
ders can indeed trace partly to micro distortions, particularly in prices and
wages. Because market transactions are voluntary and the short side deter-
mines the actual quantity traded in any market, frustration of transactions
and so of production can cumulate in a quasi-multiplier process. Down-
ward cumulativeness is particularly severe if money and credit undergo an
induced or secondary deflation (although I do wish that Hutt had been
more emphatic in recognizing the role of money). Like F.A. Hayek and
others, Hutt was magnificently right in his strictures against chronically
inflationary policies as supposed cures of unemployment.
Because of Hutt’s style and tone, his writings are unlikely to persuade
readers who lack the background and the will necessary to understand
his eccentrically phrased message. For two reasons I myself have been
turned off by Hutt’s style less than most readers probably would be. First,
when I came across Hutt’s work decades ago, I happened to be predisposed
in favour of the sort of message he was trying to convey. Second, I was
privileged inȀȈȄȄto attend a two-week conference at which he was one
of the main speakers. Later, when he served as visiting professor at the