# How Should the Post Keynesian School Define ‘Uncertainty’? 1 The Only Correct Answer Is to Use Keynes’s Own Definition Given in Footnote 1 on Page 148 of Chapter 12 of the General Theory: Uncertainty Is an Inverse Function of the Weight of the Argument

20 Pages Posted: 19 Aug 2019

Date Written: 2016

### Abstract

The Post Keynesian, Institutionalist and Heterodox schools of economics have failed for 83 years to discern the definition of uncertainty given by Keynes in footnote 1 on page 148 of the General Theory that was repeated on page 240 of the General Theory.

The footnotes on page 148 and 240 of the General Theory are the foundation for Townshend’s summary of the 1937-1938 Keynes-Townshend correspondence, which was that Keynes’s non numerical (interval valued) probabilities and weight of the evidence (argument) from the A Treatise on Probability were the foundation for Keynes’s liquidity preference theory of the rate of interest in the General Theory. Keynes’s reply to Townshend was that there was very little of Townshend’s summary from which he would differ and that Keynes’s theory (“…my theory…”) was the theory presented in the A Treatise on Probability.

Nowhere in the 1937-38 exchanges between Keynes and Townshend is there any mention of F.Ramsey’s objections to Keynes theory of logical probability or of the February,1937 Quarterly Journal of Economics reply article in which Post Keynesians claim that Keynes gave a new definition of uncertainty as ‘fundamental uncertainty.'

**Keywords:** Uncertainty definitions, J.Robinson, J M Keynes G L S Shackle, Paul Davidson

**JEL Classification:** B10, B12, B14, B16, B20, B22

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