Welcome to European Tribune. It's gone a bit quiet around here these days, but it's still going.
No, Keynes certainly did not think that market forces would fix the problem "in the long run" ~ in the General Theory, macroeconomic position of unemployment is not seen as a short term departure from a long run equilibrium ~ it is a possible macroeconomic equilibrium in its own right. And Keynes is quite explicit that market forces may make it worse rather than better.

In the General Theory, the neoclassical long run does not exist, since uncertainty in the General Theory is not restricted to stochastic risk, but extends to true uncertainty, in the face of which the information required for a neoclassical long run equilibrium does not exist.

Note that true uncertainty is not just an absence of information ~ it is actively created by our actions, since the interactions of decisions not yet arrived at will affect the future in ways that we cannot at present anticipate.

I've been accused of being a Marxist, yet while Harpo's my favourite, it's Groucho I'm always quoting. Odd, that.

by BruceMcF (agila61 at netscape dot net) on Thu Nov 3rd, 2011 at 10:22:53 AM EST
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