The Myth of Richard Kahn and the Multiplier: Keynes, Not Kahn, Created the Multiplier Concept in 1921 in His a Treatise on Probability and Taught Kahn How to Write His June, 1931 Economic Journal Paper

Abstract

The myth that R. Kahn taught J M Keynes the multiplier,so that without Kahn’s contribution,there would have been no possibility of Keynes having written the General Theory in 1936,like the myth that there is no IS-LM mathematical model in the General Theory , can be traced to deliberate canards made by Joan Robinson repeatedly in her life time. Keynes exposed Robinson as an intellectual fraud in late 1936 in correspondence with her in the months of September through November when he discovered that she did not have the slightest idea about his liquidity preference theory of the rate of interest, which is impossible to analyze in (r,Y) space except with an IS-LM model. The economics profession has incorporated these myths into the official history of economic thought and macroeconomic history, as can easily be seen by visiting Investopedia or Wikipedia. These myths go hand in glove with other myths about Keynes, such as the myth that an 18 year old Frank Ramsey showed up in Cambridge and convinced Keynes that his logical theory of probability ,based directly on the work of the greatest mathematical logician in history, George Boole, was full of errors and mistakes that then led Keynes to renounce his theory and accept some version of Ramsey’s approach. One can see how these myths end up taking on a life of themselves when one realizes that the myth of Adam Smith’s theory of the Invisible Hand of the market is universally taught in all principles courses to lower division undergraduates in all economics courses, even though Smith himself completely rejected any such theory in both the Theory of Moral Sentiments and the Wealth of Nations.