The Final Chapter in Keynes’s 'History of the Multiplier Doctrine' Had Already Been Written in the 'A Treatise on Probability' in 1921 in Chapter 26

Abstract

R J Kent’s 2007 History Of Political Economy article ends with the claim that “…But there certainly are many unanswered questions concerning Keynes’s role in the development of the multiplier…”. Pace Kent, anyone who has read Keynes’s chapter 26 in the A Treatise on Probability in 1921 and compared the mathematical analysis provided there with the mathematical analysis presented in Richard Kahn’s June, 1931 Economic Journal article, will immediately recognize that Kahn’s formal representation is identical to Keynes’s except for the specific variables used by Keynes and Kahn, q for Keynes and k for Kahn. There are no more “unanswered questions concerning Keynes’s role in the development of the multiplier…”. Keynes developed the logical and mathematical theory of the multiplier at least 10 years before the publication of Kahn’s article and applied his knowledge by providing an application of the multiplier theory in May of 1929, at least two years before the publication of Kahn’s article, as shown by Kent in his paper. Paul Samuelson missed a golden opportunity in his 1977 Journal of Economic Literature to end the mystery of the multiplier, but overlooked Keynes’s technical analysis in his analysis of Keynes’s risk analysis in chapter 26 of the General Theory. The real unanswered question is why it took nine decades for economists to recognize that it was Keynes who showed Kahn how to apply the multiplier and not the other way around.