G. L. S. Shackle, Contemporary Monetary Theory (1939)

G. L. S. Shackle’s review of R. J. Saulnier’s Contemporary Monetary Theory (1938) assesses a comparative study of Hawtrey, Robertson, Hayek, and Keynes. Its governing distinction is between painstaking exposition and an understanding of what gives a theory its intellectual unity. Shackle credits Saulnier’s scholarship and fairness, but argues that the treatment of Hayek omits an indispensable reformulation, while the discussion of Keynes misses the central role of uncertainty.

The review begins by outlining Saulnier’s four essays, each approximately one hundred pages long. Their common structure moves from concepts, terminology, and analytical procedure to price movements, business-cycle explanations, and proposals for control and stabilisation. Saulnier treats monetary theory and cycle theory as inseparable, allowing the inquiry to extend beyond narrowly monetary questions:

Its purpose is to summarise and to examine critically their work on monetary theory and business-cycle theory.

This description establishes the breadth of the undertaking and the basis for comparison. By examining each economist through the same sequence of questions, Saulnier makes their theories and policy programmes comparable. Shackle finds the resulting study thorough, particularly in its accounts of Hawtrey and Robertson, and praises the labour devoted both to comparing successive writings by individual economists and to distinguishing their positions from one another. His reservations therefore concern the adequacy of particular interpretations, not the seriousness of the undertaking.

The first reservation concerns Hayek. Saulnier relies mainly on Prices and Production, overlooking a later formulation published initially in a Danish journal and subsequently in French in October 1935. Shackle treats this omission as consequential:

No adequate appreciation of Professor Hayek's achievement is possible without taking this article into account.

The review does not explain the omitted article’s argument, so its substantive contribution cannot be reconstructed here. The criticism nevertheless establishes an important standard: a comparative account must follow the development of a thinker’s position, rather than allow a prominent earlier book to stand for the whole achievement.

Shackle’s strongest objection concerns Keynes. Saulnier carefully discusses individual terms and components of the General Theory, but, in Shackle’s judgment, fails to identify the idea that holds them together. That idea is decision-making under almost complete ignorance of the future. Economic action consequently depends on doubt, precariousness, hope, and fear. The contrast with Saulnier’s more successful accounts of Hawtrey and Robertson is pointed: explaining separate analytical elements does not necessarily disclose a theory’s essential and distinguishing character. The review’s chief conceptual contribution is thus its insistence that uncertainty belongs at the centre of an interpretation of Keynes, rather than appearing as one detail among many.

The concluding substantive criticism turns from this interpretive failure to a specific analytical issue:

In discussing the Multiplier theorem, the author introduces a criticism which may be valid if directed against the formulation of that theorem in the General Theory, but does not, in the present reviewer's opinion, undermine its substance.

Shackle distinguishes an objection to Keynes’s formulation from a refutation of the multiplier itself. He then identifies an error in Saulnier’s symbolic argument: the ratio of changes in consumption and income is treated as independently variable quantities instead of as a functional relationship. This preserves room for criticism while limiting what that criticism establishes.

The review closes by acknowledging further interesting criticisms that space prevents Shackle from discussing. Its balanced verdict makes its relevance clear: thorough comparison requires both accurate handling of analytical relationships and recognition of the organising conception behind a theory. Saulnier’s book largely earns the first kind of scholarly respect, but its account of Keynes falls short of the second.