John Maynard Keynes (1937): The General Theory of Employment:
I: I am much indebted to the Editors of the Quarterly Journal for the four contributions relating to my General Theory of Employment, Interest and Money which appeared in the issue for November, 1936. They contain detailed criticisms, much of which I accept and from which I hope to benefit. There is nothing in Professor Taussig's comment from which I disagree. Mr. Leontief is right, I think, in the distinction he draws between my attitude and that of the "orthodox" theory to what he calls the "homogeneity postulate." I should have thought, however, that there was abundant evidence from experience to contradict this postulate; and that, in any case, it is for those who make a highly special assumption to justify it, rather than for one who dispenses with it, to prove a general negative. I would also suggest that his idea might be applied more fruitfully and with greater theoretical precision in connection with the part played by the quantity of money in determining the rate of interest (Cf. my paper on "The Theory of the Rate of Interest" to appear in the volume of Essays in honor of Irving Fisher). For it is here, I think, that the homogeneity postulate primarily enters into the orthodox theoretical scheme.