A month ago, he wrote,

If you believe that economies are like machines, you are likely to view economic problems as essentially mathematical problems. The efficient state of the economy, general equilibrium, is a solution to a system of simultaneous equations. Deviations from equilibrium are “frictions,” mere “bumps in the road”; barring them, outcomes are pre-determined and optimal. Unfortunately, the frictions that disrupt the machine’s smooth operation are human beings. One can understand why economists trained in this way were seduced by financial models that implied that banks had virtually eliminated risk.

Good economists have always understood that this method has severe limitations. They use their discipline as a kind of mental hygiene to protect against the grossest errors in thinking. John Maynard Keynes warned his students against trying to “precise everything away.” There is no formal model in his great book The General Theory of Employment, Interest, and Money. He chose to leave the mathematical formalization to others, because he wanted his readers (fellow economists, not the general public) to catch the “intuition” of what he was saying.

Those paragraphs would have fit into Specialization and Trade, particularly the first sentence of the first paragraph.

My view of Keynes’ “intuition” is that it is very appealing but ultimately misleading. I am thinking in particular of the “spending causes jobs” and “jobs cause spending” intuition that is what passes for Keynesian economics in the press. In real economics, you cannot just posit quantity-quantity interactions without any prices involved.

By the way, Skidelsky’s three-volume biography of Keynes (not the abridged version) really is the best thing you can read on “what Keynes really meant.” He really gets at Keynes’ views on the psychology of saving (or hoarding) and investing. I do not think that “animal spirits” means what Akerlof, Shiller, and nearly everyone else thinks it means– bouts of optimism or pessimism. I think it probably is closer to the drive for reproduction, or for immortality. Mr. Trump built his towers to try to give his name a lasting presence, not because he had a burst of optimism about real estate investment.