How did Keynes general theory of employment work?
In 1936 Lord Keynes wrote a book entitled “General Theory of Employment, Interest and Money”. It was due to this book that he was conferred the title of Lord. In this book he directly opposed the postulates of the classical economists. The word ‘General’ in the title of this book carries specific meanings. It explains that the Keynesian theory deals with the level of employment in general, which keeps on changing and is never stable at any particular level. This is to contrast the, classical theory which is a special or specific theory of employment. Secondly, Keynes deals with the economy and its components in aggregate e.g. aggregate output, aggregate supply, aggregate demand, aggregate savings, aggregate investment, aggregate employment etc. This is to show that aggregates represent the general situation. In his book Keynes not only dealt with the general level of employment but also extensively looked upon the problem of general unemployment and suggested measures for its solution.
