HERE is a funny little story about the history of economics. John Maynard Keynes called his landmark economics text "The General Theory of Employment, Interest and Money". The "general theory" in the title was doing double duty. It modestly suggested a comparability between Keynes and Albert Einstein, a genius whose work revolutionised his field. It was also meant to convey that this was the big—one might say macro—idea shaping how employment, interest, and so on all work. Keynes's peers, while impressed by the book, weren't quite sure about its generality. John Hicks helped to turn Keynes's great work into the models that would form the basis of macroeconomics textbooks, and shape policy thinking, for decades to come. Yet he also needled Keynes, writing that the great man's economics provided a novel way of thinking about depressions but not much else:

[I]t is not the General Theory. We may call it, if we like, Mr. Keynes' special theory. The General Theory...Continue reading