Veblen and Keynes: On the economic theory of the capitalist economy

The purpose of this paper is to compare Veblen and Keynes' contributions to the economic theory of the capitalist economy. The subject of this comparison are aggregate demand, determination of output and employment, determination of price level and inflation, the business cycle, monetary theory of production, and the views on economic policy and the future of capitalism. Veblen's contribution to the first four components anticipates the hydraulic interpretation of Keynes's work. Keynes's contribution to the monetary theory of production develops further Veblen's finding. On the views of economic policy and capitalism, Veblen and Keynes's contributions are contradictory.