The Monetary Theory of D. H. Robertson

Abstract

THE reviewer of Professor Robertson's Essays,1 especially when (as in the present case) he comes to his task a year after its publication, is confronted with something different from the usual task of reviewing. Either in their collected form, or as originally published, these essays will already be familiar to most persons who are likely to read a review in ECONOMICA. They have already won an assured place in economic literature, which in this instance is English literature too; for may we not say that Robertson at his best is unmatched this side of Adam Smith for the combination of profound wisdom with literary charm ? The present volume contains a larger proportion of these best things than any of its predecessors ; their clarity and humanity it would be superfluous to praise. My own favourite is that Harvard address, characteristically entitled The Snake and the Worm . I do not know how often I have read it; I shall go on reading it until I know it by heart. Yet the way to these heights has not been won without effort; we have in this volume plenty of the rude climbing as well as the clear air of the mountain tops. The four essays, Saving and Hoarding (1933), Industrial Fluctuation and the Natural Rate of Interest (I934), Effective Demand and the Multiplier (1936) and Mr. Keynes and the Rate of Interest (1939), stand by themselves apart from the rest. They are a formidable series; one hopes that they will not scare off too many readers who would be delighted and fortified by the other essays. But they are the author's workshop, into which he invites us. My business here must clearly be to accept the invitation. There is contained in these four essays-and in the less alarming Survey of Modern Monetary Controversy (I937) which must be read with them-the outline of a theory of money and fluctuations second to no existing theory in its depth and its fairmindedness. But the theory is never set out in so many terms; we get to know it more by contrast than in itself. In the first essay of the quartet we see the impact of the Treatise on Money on the mind of the author of Banking Policy and the Price-Level; in the second he has been