Keynes's special theory
THE THEORY OF FREE BANKING: MONEY SUPPLY UNDER COMPETITIVE NOTE ISSUE by George Selgin Totowa, N.J.: Rowman and Littlefield, and Washington, D.C.: Cato Institute, 1948. 218pp., $33.50 Keynes's analysis of the possibility of underconsumption in capitalist economies is not a general theory of market economies, but rather is relevant, at best, to economies with central banking systems. Selgin helps demonstrate that by contrast, competition in money production can link saving and investment, thus avoiding Keynes's critique. In addition, Selgin's argument provides a framework to understand central banking's inability to achieve its intended results. Many of the macroeconomic problems in historical capitalism can thus be traced to interference with financial markets, rather than to market failures.