Cambridge Circus (economics)
Encyclopedia
The Cambridge Circus or Keynes's Circus was a group of young Cambridge
economists closely associated with John Maynard Keynes
. The group consisted of Richard Kahn
, James Meade
, Joan Robinson
, Austin Robinson
, and Piero Sraffa
. The group formed immediately following the 31 October 1930 publication of Keynes's A Treatise on Money
to read and discuss the Treatise and to provide feedback on Keynes's continuing theoretical work that would lead to his General Theory of Employment, Interest, and Money. Sraffa initiated the group, which meant in Kahn's rooms of the Gibb's Building at King's College
. The group meant among themselves and in a seminar, which included some undergraduates, during the 1930-1931 academic year. The seminar meetings occurred in the Old Combination Room of Trinity College
.
Kahn acted as the groups spokesperson and met with Keynes weekly to discuss the Circus's thoughts. Kahn identifies the "widow's cruse" and "Danaid jar
" fallacy as the most substantive issue in the group's discussions. The issue referred to Keynes's statement in the Treatise that an entrepreneur who spent his profits on consumption goods would increase profits for another entrepreneur by the same amount and that these profits would percolate through the economy endlessly like the oil from the widow's cruse in I Kings 17:16. (The reverse case, where entrepreneurs save, is analogous to the Danaid's jar that never fills). The Circus challenged Keynes's implicit assumption that there was a fixed supply of consumption goods.
The influence of the group on the General Theory has been debated. Joseph Schumpeter
stated that Kahn's contribution was almost that off a co-author, but Kahn himself denied this. On the other hand, Don Patinkin
argued that most of Keynes's major breakthroughs came after the group disbanded in Spring 1931.
The group kept no records but several first hand accounts of the group's meetings have been published.
University of Cambridge
The University of Cambridge is a public research university located in Cambridge, United Kingdom. It is the second-oldest university in both the United Kingdom and the English-speaking world , and the seventh-oldest globally...
economists closely associated with John Maynard Keynes
John Maynard Keynes
John Maynard Keynes, Baron Keynes of Tilton, CB FBA , was a British economist whose ideas have profoundly affected the theory and practice of modern macroeconomics, as well as the economic policies of governments...
. The group consisted of Richard Kahn
Richard Kahn, Baron Kahn
Richard Ferdinand Kahn, Baron Kahn, CBE, FBA was a British economist.Kahn was born in Hampstead to Augustus Kahn, a German schoolmaster and an orthodox Jew, and Regina Schoyer. He raised in England and was educated on St Paul's School, London...
, James Meade
James Meade
James Edward Meade CB, FBA was a British economist and winner of the 1977 Nobel Memorial Prize in Economic Sciences jointly with the Swedish economist Bertil Ohlin for their "Pathbreaking contribution to the theory of international trade and international capital movements."Meade was born in...
, Joan Robinson
Joan Robinson
Joan Violet Robinson FBA was a post-Keynesian economist who was well known for her knowledge of monetary economics and wide-ranging contributions to economic theory...
, Austin Robinson
Austin Robinson
Professor E. Austin G. Robinson was a University of Cambridge economist. He was a fellow of Sidney Sussex College, Cambridge....
, and Piero Sraffa
Piero Sraffa
Piero Sraffa was an influential Italian economist whose book Production of Commodities by Means of Commodities is taken as founding the Neo-Ricardian school of Economics.- Early life :...
. The group formed immediately following the 31 October 1930 publication of Keynes's A Treatise on Money
A Treatise on Money
A Treatise on Money is a work on economics by English economist John Maynard Keynes. In the Treatise Keynes drew a distinction between savings and investment, arguing that where saving exceeded investment, recession would occur....
to read and discuss the Treatise and to provide feedback on Keynes's continuing theoretical work that would lead to his General Theory of Employment, Interest, and Money. Sraffa initiated the group, which meant in Kahn's rooms of the Gibb's Building at King's College
King's College, Cambridge
King's College is a constituent college of the University of Cambridge, England. The college's full name is "The King's College of our Lady and Saint Nicholas in Cambridge", but it is usually referred to simply as "King's" within the University....
. The group meant among themselves and in a seminar, which included some undergraduates, during the 1930-1931 academic year. The seminar meetings occurred in the Old Combination Room of Trinity College
Trinity College, Cambridge
Trinity College is a constituent college of the University of Cambridge. Trinity has more members than any other college in Cambridge or Oxford, with around 700 undergraduates, 430 graduates, and over 170 Fellows...
.
Kahn acted as the groups spokesperson and met with Keynes weekly to discuss the Circus's thoughts. Kahn identifies the "widow's cruse" and "Danaid jar
Daughters of Danaus
In Greek mythology, the Daughters of Danaus or Danaids were the fifty daughters of Danaus. They were to marry the fifty sons of Danaus's twin brother Aegyptus, a mythical king of Egypt...
" fallacy as the most substantive issue in the group's discussions. The issue referred to Keynes's statement in the Treatise that an entrepreneur who spent his profits on consumption goods would increase profits for another entrepreneur by the same amount and that these profits would percolate through the economy endlessly like the oil from the widow's cruse in I Kings 17:16. (The reverse case, where entrepreneurs save, is analogous to the Danaid's jar that never fills). The Circus challenged Keynes's implicit assumption that there was a fixed supply of consumption goods.
The influence of the group on the General Theory has been debated. Joseph Schumpeter
Joseph Schumpeter
Joseph Alois Schumpeter was an Austrian-Hungarian-American economist and political scientist. He popularized the term "creative destruction" in economics.-Life:...
stated that Kahn's contribution was almost that off a co-author, but Kahn himself denied this. On the other hand, Don Patinkin
Don Patinkin
Don Patinkin was an Israeli/American monetary economist, and the president of Hebrew University in Jerusalem.- Biography :...
argued that most of Keynes's major breakthroughs came after the group disbanded in Spring 1931.
The group kept no records but several first hand accounts of the group's meetings have been published.