Some Cambridge Reactions to the General Theory : David Champernowne and Joan Robinson on Full Employment

This essay analyses early reactions put forward by Cambridge economists David Champernowne and Joan Robinson to J. M. Keynes`s treatment of the labour market in The General Theory. Champernowne`s and Robinson`s critical reactions represented attempts to fill the gap of the determinants of changes in money-wages, which they both identified as a weak spot in the argument of the book. They rejected, albeit for different reasons, Keynes`s notion of the point of full employment as an upper limit defined by the equality between the real wage rate and the marginal disutility of employment. Instead of Keynes`s taxonomy of types of unemployment, Champernowne and Robinson introduced, respectively, the concepts of `monetary employment` and `monetary unemployment`, and of `critical levels` of employment