Friday Filosophy v.10.07.2022
John Maynard Keynes, 1st Baron Keynes, CB, FBA; (5 June 1883 – 21 April 1946) was an English economist whose ideas fundamentally changed the theory and practice of macroeconomics and the economic policies of governments. Originally trained in mathematics, he built on and greatly refined earlier work on the causes of business cycles. One of the most influential economists of the 20th century, he produced writings that are the basis for the school of thought known as Keynesian economics, and its various offshoots. His ideas, reformulated as New Keynesianism, are fundamental to mainstream macroeconomics.
During the Great Depression of the 1930s, Keynes spearheaded a revolution in economic thinking, challenging the ideas of neoclassical economics that held that free markets would, in the short to medium term, automatically provide full employment, as long as workers were flexible in their wage demands. He argued that aggregate demand (total spending in the economy) determined the overall level of economic activity, and that inadequate aggregate demand could lead to prolonged periods of high unemployment, and since wages and labor costs are rigid downwards the economy will not automatically rebound to full employment. Keynes advocated the use of fiscal and monetary policies to mitigate the adverse effects of economic recessions and depressions. He detailed these ideas in his magnum opus, The General Theory of Employment, Interest and Money, published in late 1936. By the late 1930s, leading Western economies had begun adopting Keynes’s policy recommendations. Almost all capitalist governments had done so by the end of the two decades following Keynes’s death in 1946. As a leader of the British delegation, Keynes participated in the design of the international economic institutions established after the end of World War II but was overruled by the American delegation on several aspects.
Keynes’s influence started to wane in the 1970s, partly as a result of the stagflation that plagued the Anglo–American economies during that decade, and partly because of criticism of Keynesian policies by Milton Friedman and other monetarists, who disputed the ability of government to favorably regulate the business cycle with fiscal policy. However, the advent of the global financial crisis of 2007–2008 sparked a resurgence in Keynesian thought. Keynesian economics provided the theoretical underpinning for economic policies undertaken in response to the financial crisis of 2007–2008 by President Barack Obama of the United States, Prime Minister Gordon Brown of the United Kingdom, and other heads of governments.
When Time magazine included Keynes among its Most Important People of the Century in 1999, it stated that “his radical idea that governments should spend money they don’t have may have saved capitalism.” The Economist has described Keynes as “Britain’s most famous 20th-century economist.” In addition to being an economist, Keynes was also a civil servant, a director of the Bank of England, and a part of the Bloomsbury Group of intellectuals.
- The difficulty lies not so much in developing new ideas as in escaping from old ones.
- Ideas shape the course of history.
- Long run is a misleading guide to current affairs. In the long run we are all dead.
- Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
- By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.
- The avoidance of taxes is the only intellectual pursuit that still carries any reward.
- Successful investing is anticipating the anticipations of others.
- The importance of money flows from it being a link between the present and the future.
- There is no harm in being sometimes wrong – especially if one is promptly found out.
- Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.
- For at least another hundred years we must pretend to ourselves and to everyone that fair is foul and foul is fair; for foul is useful and fair is not. Avarice and usury and precaution must be our gods for a little longer still.
- If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid.
- Education: the inculcation of the incomprehensible into the indifferent by the incompetent.
- The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn’t deliver the goods.
The Time is Now.
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