Afternoon session
II. JM Keynes and The General Theory (1936)
Hélène de Largentaye
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II. JM Keynes and The General Theory (1936)
1. German and French translations
Chairmen: James Trevithick et Jörg Bibow
Hélène de Largentaye
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II. JM Keynes and The General Theory (1936)
1.German and French translations
The German translation by Fritz Waeger (1936)
by Harald Hagemann
Harald Hagemann
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Outline
1. German Translations
2. The Role of Keynes in Germany
3. Keynes’s Preface to the German edition of 1936
4. Wages and Employment in light of the Great Depression
5. Keynes’s “National Self-Sufficiency” of 1933
6. Keynes’s support for émigré economists
Introduction
The first foreign-language publication of the General Theory was published in German in the
same year as the English original in 1936. It was in Germany that “A Monetary Theory of
Production”, the outline of his research programme, had been published as his contribution
to the Spiethoff Festschrift in 1933, when Keynes was half-way from his Treatise to the
General Theory. However, with the Nazis’ rise to power this year also marked a deep political
watershed. The dismissal, expulsion and emigration of economists had the consequence that
many of the earlier reviewers and commentators of the Treatise on Money were not living in
the German language area anymore when the General Theory was published. Nevertheless,
the extent and intensity of the early reaction to Keynes’s book was remarkable.
1. German Translations of the General Theory
The first foreign-language publication of the General Theory was published in German in the
same year as the English original in 1936. It was in Germany that “A Monetary Theory of
Production”, the outline of his research programme, had been published as his contribution
to the Spiethoff Festschrift in 1933, when Keynes was half-way from his Treatise to the
General Theory. However, with the Nazis’ rise to power this year also marked a deep political
watershed. The dismissal, expulsion and emigration of economists had the consequence that
many of the earlier reviewers and commentators of the Treatise on Money were not living in
the German language area anymore when the General Theory was published. Nevertheless,
the extent and intensity of the early reaction to Keynes’s book was remarkable.
1. German Translations of the General Theory
•Allgemeine Theorie der Beschäftigung, des Zinses und des Geldes, translated by Fritz
Waeger, Berlin 1936: Duncker & Humblot.
•10th revised edition with explanations on the structure of Keynes’s book by Jürgen
Kromphardt and Stephanie Schneider, Berlin 2006, 11th edition 2009.
•The revised edition contains references to the page numbers of the English original on
every page.
•Jürgen Kromphardt, Professor emeritus at the Technical University of Berlin, is founding
chairman of the Keynes-Gesellschaft (Keynes Society) which currently has ca. 150
members.
 http://www.keynes-gesellschaft.de/
2. The Role of Keynes in Germany
Keynes had been a central point of reference in economic debates in Weimar Germany ever
since his publication of
The Economic Consequences of the Peace.
Furthermore, there had been many parallels in the debates on the wage-employment nexus
between Germany and Britain in the years 1929-32. This topic also matters for some
controversies which center on an important paragraph at the end of Keynes’s Preface to the
German edition of the General Theory.
Germany: Reparation payments: Necessity to generate export surpluses
Britain: Return to the gold standard at pre WWI parities
Keynes (1925): ‘The Economic Consequences of Mr. Churchill’
Keynes (1930): ‘The Question of High Wages’
“by squeezing the higher wages out of increased efficiency”
2. The Role of Keynes in Germany
J.M. Keynes, “A Monetary Theory of Production”, in: G. Clausing (ed.), Der Stand und die nächste Zukunft
der Konjunkturforschung. Festschrift für Arthur Spiethoff (1933).
1933 watershed year
Many of the most qualified reviewers of the Treatise on Money (1930) had already emigrated from Nazi
Germany when the General Theory (1936) was published (e.g. Neisser, Röpke).
Nevertheless many substantial reviews in Germany (Lautenbach, Peter; Föhl 1937) or the German
language area (Amonn, Jöhr, Schüller).
3. Keynes’s Preface to the German edition of 1936
Keynes’s Preface to the German edition of 1936 has often been interpreted that Keynes had sympathies for the
national-socialist regime:
•“But the most convincing evidence of Keynes’s strong fascist bent was the special foreword he prepared for the
German edition of The General Theory. This German translation, published in late 1936, included a special
introduction for the benefit of Keynes’s German readers and for the Nazi regime under which it was published.”
(Murray Rothbard, “Keynes, the Man” 1992, p.192)
•“Keynes accepted the political relations in Nazi Germany as a basis for the acceptance of his theoretical view”
(Krause, Rudolph, East-Berlin 1980, p.501).
•“Keynesianism as the dominant political-economic apologetics of the state-monopolistic capitalism contributed
to justify the measures with which German fascism ‘solved’ the unemployment problem by rearmament which
led to WWII.”
(Schwank, East-Berlin 1961, p. 56-57)
3. Keynes’s Preface to the German edition of 1936
Whereas the former statements definitely were not made by leading representatives of a
value-free science-approach in the sense of Max Weber, even more serious scholars were
irritated by the German Preface to the G.T.
1. Barkai points out the continuity between Keynes and the Nazis which did not shock
Keynes.
Avraham Barkai, (1990), Nazi Economics: Ideology, Theory and Policy, pp.6 and 69.
2. Skidelsky (III, 2001, p.230) deplores Keynes’s bad choice of words which contributed to
confusion.
3. Moggridge is so much irritated by Keynes’s “unnecessary” Preface that he comes to the
conclusion:
“Keynes displayed remarkable insensitivity, indeed indifference, to a régime that put its
political opponents into concentration camps and passed the anti-semitic Nuremberg laws. …
It is all shameful – and puzzling”.
Moggridge, Maynard Keynes, 1992, p.611.
3. Keynes’s Preface to the German edition of 1936
“There have always existed important schools of economists in Germany who have strongly
disputed the adequacy of the classical theory for the analysis of contemporary events. […]
The most important unorthodox discussion on theoretical lines was that of Wicksell. His
books were available in German (as they were not, until lately, in English); indeed one of the
most important of them was written in German. But his followers were chiefly Swedes and
Austrians […] Thus Germany, quite contrary to her habit in most of the sciences, has been
content for a whole century to do without any formal theory of economics which was
predominant and generally accepted.
[…] After all, it is German to like a theory. How hungry and thirsty German economists must
feel after having lived all these years without one!”
(Keynes 1936: xv-xvi, my italics)
3. Keynes’s Preface to the German edition of 1936
“… For I confess that much of the following book is illustrated and expounded mainly with reference to the conditions
existing in the Anglo-Saxon countries. Nevertheless the theory of output as a whole, which is what the following book
purports to provide, is much more easily adapted to the conditions of a totalitarian state (the German text carries the
official expression: Totaler Staat), than is the theory of the production and distribution of a given output produced under
conditions of free competition and a large measure of laissez-faire. This is one of the reasons which justify my calling my
theory a General (emphasis in the original) theory. Since it is based on less narrow assumptions than the orthodox
theory, it is also more easily adapted to a large area of different circumstances. Although I have thus worked it out
having the conditions in the Anglo-Saxon countries in view—where a great deal of laissez-faire still prevails—it yet
remains applicable to situations in which national leadership (staatliche Führung) is more pronounced. For the theory of
psychological laws relating consumption and saving, the influence of loan expenditure on prices and real wages, the part
played by the rate of interest—these remain as necessary ingredients in our scheme of thought under such conditions,
too.”
(Keynes, taken from the foreword to the German edition, translation in
Cambridge Journal of Economics, 4: 175-6)
Schefold (1980),
3. Keynes’s Preface to the German edition of 1936
“To suppose that a flexible wage policy is a right and proper adjunct of a system which on the
whole is one of laissez-faire, is the opposite of the truth. It is only in a highly authoritarian
society, where sudden, substantial, all-round changes could be decreed that a flexible wage
policy could function with success. One can imagine it in operation in Italy, Germany or
Russia, but not in France, the United States, or Great Britain.”
(Keynes 1936: 269)
“[T]here remains a margin of doubt as to the responsibility for the text which finally
appeared in German.”
Schefold (CJE, 1980, p. 176).
4. Wages & Employment in Light of the Great Depression
There are three main arguments which substantiate the view that with flexible wages
and prices a full-employment equilibrium may exist but will not be reached in a
dynamic process.
1.Keynes puts main emphasis on elastic price expectations which have a
destabilising effect. If with falling money wages and prices people would expect
further wage and price reductions in the future, the effect of these expectations on
current investment and consumption would be negative because of a postponement
of purchases into the future. Deflationary price expectations cause a higher
propensity to save and to hold money and a reduction in the marginal efficiency of
capital and the inducement to invest.
4. Wages & Employment in Light of the Great Depression
2.Lower prices increase the real burden of debt for companies which have financed their real
investment by credit as well as for farmers or home-owners. A stronger process of deflation
thus quickly leads into an increasing number of insolvencies and bankruptcies. Business
confidence is even more shaken, and the effects on investment are severely negative. There
is a great danger that a vicious circle sets in.
Hahn identifies here “one of Keynes’s most interesting points , namely that the deflationary
process of falling money wages would cause bankruptcies” (Hahn 1984: 57)
4. Wages & Employment in Light of the Great Depression
3.Tobin has pointed out that “[f]or Fisher in 1932-3, more even than Keynes in 1936, raising
prices was a step indispensable to recovery, not just an incidental byproduct of other
measures” (Tobin 1980: 9). Thus reflation was an important remedy to avoid the high number
of bankruptcies due to the increasing real burden of debt in the deflation and to get out of the
trap of a vicious circle. In a period of a strong process of disinflation causing a high number of
bankruptcies in the United States with severely adverse effects on investment, output and
employment, Tobin reminded us of the insights Irving Fisher had gained on the severe
consequences of deflation on the real value of long-term debts in his important article “The
Debt-Deflation Theory of Great Depressions” (Fisher 1933) and emphasised another Fisher
effect.
5. Keynes’s “National Self-Sufficiency” of 1933
A case of co-operative self-censorship
Knut Borchardt, ZWS 108 (1988), pp. 271 – 284
A comparison of Keynes’s 1933 article (The Yale Review, June 1933; The New Statesman) on
“National Self-Sufficiency” with the German version “Nationale Selbstgenügsamkeit” published
in Schmollers Jahrbuch shows considerable differences. The tendency is clear. The article was
cleared from all passages which may have displeased the Nazis. Who was responsible?
Morally and politically Keynes‘s judgement was clear. Nevertheless he wrote to Spiethoff on 25
August 1933:
“I confirm that I am quite satisfied that my article should, on your responsibility, appear in the
slightly curtailed form in which the proof reached me.”
5. Keynes’s “National Self-Sufficiency” of 1933
“In those countries where the advocates of national self-sufficiency have attained power, it
appears to my judgement that, without exception, many foolish things are being done.
Mussolini may be acquiring wisdom teeth. But Russia exhibits the worst example which the
world, perhaps, has ever seen of administrative incompetence and of sacrifice of almost
everything that makes life worth living to wooden heads.
Germany is at the mercy of unchained irresponsibles – though it is too soon to judge her
capacity of achievement.”
(An example of a passage which is not included in the German
version, my italics)
6. Keynes’s support for émigré economists
Academic Assistance Council (from 1936 the Society for the Protection of Science and Learning)
founded already at May 24, 1933, on the initiative of Sir William Beveridge and a group of British
academics to help “University teachers and investigators of whatever country who, on grounds of
religion, political opinion or race, are unable to carry on their work in their own country”.
Presidents:
1933 – 37
1937 – 44
since 1944
Ernst Rutherford
William Temple,
later Archbishop of Canterbury
Lord Beveridge
Since May 1940 a greater part of émigré economists were put as “enemy aliens” into internment
prison by the British government on the Isle of Man (except category C, the “friendly” enemy
aliens), partly put forward to the Dominions Canada (Paul Streeten) and Australia.
6. Keynes’s support for émigré economists
6. Keynes’s support for émigré economists
In summer 1940 Keynes, who actively fought for the liberation of many interned economists,
in particular Piero Sraffa, Erwin Rothbarth, Hans Singer and Eduard Rosenbaum, intervened
at the Home Secretary. He regarded the whole affair as “the most disgraceful humiliating
thing which has happened for a long time” and finished his letter to F.C. Scott of 23 July 1940
with the statement: “If there are any Nazi sympathisers at large in this country, look for them
in the War Office and our Secret Service, not in the internment camps.”
6. Keynes’s support for émigré economists
“Internment was horrid: not so much for the discomfort, meagre and tasteless
food rations, often disagreeable company, crowded but mainly for being out of
action at a time when one wanted to be in the midst of things. Some authors
have recently maintained that the internees were quite happy with their lot and
regarded it as an enforced but welcome holiday. This is quite wrong. All of us
hated and resented the enforced idleness. And it was humiliating to have been
rejected by the Austrians as a Jew, and imprisoned by the English as an
Austrian. But Harold Nicolson and Richard Crossman, after a few months, helped
to reverse this stupid action”
Paul Streeten
II. JM Keynes and The General Theory (1936)
1. German and French translations
The French translation by Jean de Largentaye (1942)
by Hélène de Largentaye & Ghislain Deleplace
Introduction
I. Background
II. A triangle for a translation :
Keynes, Sraffa and Largentaye (GD)
III. Keynes’s preface and the
translator’s second note (1969)
Conclusion: The reception of Keynes's
General Theory in France
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Introduction
Who was Jean de Largentaye?
"Doesn’t France suffer from monetary asphyxia?"
(question to Blum’s Minister of Finance (1937)
Largentaye’s "illumination" (JMK’s GT )
Sources : Keynes archives, family archives
I. Background
1. Backwardness of Economics in France in the 1930s
2. Political Context
3. The 1938 Recovery Plan
1.1. Backwardness of Economics in France in the 1930s
 No Faculty of Economics; not a discipline per se (lectures in Faculty
of Law , Sciences Po, Engineering and business schools…)
 Prominent Economic professors: Charles Gide (« Cours d’économie
politique », Revue d’économie politique ), Charles Rist, Paul LeroyBeaulieu belonging to the "liberal" (i.e., Classic) tradition
 Keynes’s Germanophile reputation (“The Economic consequences of
the Peace”) ; no translations into French of JM Keynes’s works
(1933-1942), no translation of “The Treatise on Money” (1930)
 Practically no economic culture or Classic mainstream economics in
the business circles, civil service , in politics and media : “fogginess”
of economic thought (Gaston Cusin)
1.2. Political context (1936-1942)
 Front populaire government headed by Leon Blum (June 1936-June
1937)
 Léon Blum, Pierre Mendès France (PMF), George Boris
 Moderate left government headed by Camille Chautemps (June
1937-March 1938)
 The 3-week second Blum government (13 March-8 April 1938)
 Daladier government (April 1938-March 1940); Raynaud government
(March-June 1940)
 Rise of the Nazi party in Germany (Anschluss 14 March 1938), Munich
agreements (30 September 1938), invasion of Poland and declaration
of war (3 September 1939) ; German occupation of France and Vichy
régime (16 June 1940-20 August 1944)
1.3 Blum’s recovery plan : « PMF’s bill » (5 April 1938)
 Learning process of GT in French Treasury during the 8-month
interval separating 2 Blum governments; other circles (X-crise; CGT
and ILO/ Geneva); foreign experiences (FDR, Dr. Schacht, Soviet 5year plan…)
 Recovery plan drafted during this interval by Blum’s team, headed
by G. Cusin (V. Auriol’s directeur de cabinet )
 GT rationale behind the Blum plan (« PMF’s bill »): a huge military
expenditure with a multiplier- effect + low interest rates + capital
controls ; tribute paid by "The Times" (6/04/1938)
 Shortcomings of the Blum plan : inappropriate economic vocabulary ;
"crowding-out" mistake (savings as a prerequisite to funding
investment)
 Blum plan , a still-born bill : Senate rejection (capital tax ), fall of 2nd
Blum government, beginning of French translation (April 1938)
II. A triangle for a translation : Keynes, Sraffa and
Largentaye
 Third dramatis persona: Piero Sraffa (1898-1983), an Italian scholar settled
in Cambridge since 1927, member of the Cambridge Circus that discussed
manuscript of GT, editor of Ricardo’s Works (1951-55), author of
Production of Commodities by Means of Commodities (1960)
• Asked by JM Keynes to advise on the translation of the two chapters (11,
17) and the glossary sent by Largentaye
 JM Keynes endorsed his evaluation, followed his suggestions on choice of
words, dodged analytical difficulties raised by Jean de Largentaye and
implicit in Piero Sraffa
1. Keynes’s endorsement of Sraffa’s evaluation of the translation
 Piero Sraffa’s initial judgment devastating: “does not know the subject”; “complete
ignorance of the technical terms”. Suggested Jean de Largentaye took advice from
French economist Etienne Mantoux.

JM Keynes agreed: “a good many of the terms you have used would render many
passages unintelligible or at least misleading to French readers.”
Six months later (after Chapter 17) PS more positive : “on the whole
it is remarkable how well he understands the English and the
Economics.” However, criticized the French language: “disgraceful –
much on the same level as the ‘français de cuisine’ [kitchen French]
of which King's menus are an example.”
• Again JM Keynes agreed: “in this difficult chapter you have been
remarkably successful in understanding the meaning of the English
and of the economic theory.” However: “a little bit in the nature of
what English school-boys call “dog French” from the analogy of “dog
Latin””.

 How could JM Keynes and P Sraffa judge the French written by a
high-ranking public officer? Nevertheless, J Largentaye took their
critical advice seriously: accepted all but one of the 23 stylistic
suggestions made by PS on Chapter 17.
 However, JM Keynes’s and P Sraffa’s reservations not only literary;
stemmed from divergence about what an accurate translation should
be, as shown by discussions on choice of French terms.
2. The choice of the French terms: “Suitable equivalents” or
“everyday words”?
 JM Keynes wanted “suitable equivalents for my set of technical
terms”, on the model of German translation.
 J Largentaye acknowledged having “not conceived this work in the
spirit you wish [but] to make the translation as easy to understand
as possible for readers who are not students of political economy.”
Hence “words belonging to everyday, or to business language.”
 Problem: for JM Keynes “this book is chiefly addressed to my fellow
economists”, not to “general public”. Exact terms were required, not usual
(hence misleading) words .
 Adjustments, through letters back and forth, and a meeting in Paris
between P Sraffa and J Largentaye.
 Examples: “expectations”; “animal spirits”.
3. Analytical difficulties raised by Chapter 17
 JM Keynes: “the most difficult chapter of all to render”
 Not only because of terminology: theory was involved in translation of an
important sentence.
 Question: in which standard should marginal efficiencies of assets be
measured when they are ranked to determine the rate of investment? JM
Keynes’s answer: the asset with the highest “own-rate of interest”.
 Change suggested by J Largentaye: in whatever asset, the result being the
same. Based his suggestion on Pigou’s critique of Chapter 17.

Surprisingly, JM Keynes accepted, pretexting amnesia: “I feel that I
probably had some reason for putting it in the way I did at the time,
but at the moment I am not able to see what that reason was. I am,
therefore, ready to accept your proposed amendment.”
 Maybe JM Keynes did not feel on solid ground: J Largentaye’s
suggestion brought back to the surface Hicks’s and Sraffa’s criticisms
of the definition of the “own-rate of interest” – a concept invented
by … Sraffa.
 Analytical difficulty resurfaced in the translation of “own-rate of
interest”. J de Largentaye: “taux d’intérêt d’une richesse [wealth]”. P
Sraffa: “taux d’intérêt par marchandise [commodity]”. J de
Largentaye disagreed: “a steel plant is not a commodity, a land is not
a product”.
• Ambiguity in JM Keynes: applied the concept to a steel plant
(produced, hence a commodity) but also to land (not produced,
hence not a commodity).
 This analytical difficulty was never settled between JM Keynes and P
Sraffa. Translation by J de Largentaye revived it.
Conclusion
 JM Keynes praised the translation: “I much appreciate how much
trouble you have taken, and the success with which you have tackled
an awkward task.”
 Although outside circumstances due to the war much delayed the
publication, the French translation offers thus a rare example of a
true collaboration between an author and the translator of a book
in economics.
 The translation not only contributed to the impact of the book in
France, but also the preface written by de J Largentaye
III. Keynes's preface and the translator's 2nd introductory
note (1969)
 A long preface (vs. 1936 German or Japanese ones)
 France : « no orthodox tradition with the same authority » : less
resistance to JMK’s ideas
 Montesquieu « the real French equivalent of Adam Smith » and JB
Say « …in the theory of production it is a final break-away from the
doctrine of JB Say and in the theory of interest it is a return to the
doctrines of Montesquieu »
JM Keynes
2. The translator's second introductory note (1969)
 Two limitations:
 Acceptance of law of diminishing returns (2nd postulate of the
Classics)
 Nature of monetary system : credit money vs. commodity
money
Conclusion : Reception of Keynes's General Theory in
France
 Full employment referred to in preamble of 1946 Constitution :
"the right to obtain an employment"
 Keynesians in Resistance movement, in Algiers provisional
government (1943-1945) and after WWII: Alain Barrère, Jean
Marchal, Robert Marjolin, George Boris, Gabriel Ardant, Claude
Gruson, Pierre Mendès France…
 Opponents: administration, Jacques Rueff, Jean Monnet…
 Keynesian influence during Reconstruction period:
employment, growth and social priorities ( vs. financial ),
state-intervention ; TG taught at ENA and popularised by
books
 Keynes’s responsibility in successful French "Fordist"
growth period (1954 -1970)
Thank you for your attention
II. JM Keynes and The General Theory (1936)
2. The impact of The General Theory on economic policies during the
last thirty years ( 1986-2016)
Chairman: Paul Davidson
Héléne de Largentaye
50
II. J. M. Keynes and The General Theory (1936)
2. The impact of The General Theory on economic policies during the last thirty years
(1886-2016)
1. As if Keynes had never lived: the second UK and world crisis of
financial globalization
by Geoff Tily
Trades Union Congress & Prime Economics