Hayek on Keynes' Second Fundamental Error: Keynes Considers the Market Exclusively As a Set of Monetary Flows

In Hayek’s opinion, Keynes focuses his analysis mainly on the monetary surface of the market process while he neglects analyzing the underlying real process. Hayek believes that Keynes considers the market exclusively as a set of monetary flows and, therefore, in The General Theory everything is explained through the variation of monetary expenditure. For Hayek, this approach to the economic problem makes it impossible to construct theories to understand the market process.

--David Sanz Bas, "Hayek's Critique of The General Theory: A New View of the Debate between Hayek and Keynes," Quarterly Journal of Austrian Economics 14, no. 3 (Fall 2011): 295.