|
Keynes
Jan 19, 2008 12:43:05 GMT -6
Post by Keynesian identity on Jan 19, 2008 12:43:05 GMT -6
I just wanted to know how many people here are familiar with Keynes. I mean really familiar like you actually know something about him. There is alot of intelligent debate and discussion that could follow in terms of his beliefs and theories. Of course that would be a more theoretical and value filled disussion not so much pragmatic discussion. If you have already discussed Keynes then im sorry im new here.
|
|
|
Keynes
Jan 19, 2008 17:40:46 GMT -6
Post by unlawflcombatnt on Jan 19, 2008 17:40:46 GMT -6
I would enthusiastically welcome a discussion of John Maynard Keynes.
I know quite a bit about him. I think he's the most important economist of all time. It was Keynes who established the importance of Aggregate Demand—showing how it was the major driving force of national economies.
Macroeconomics became a major field in economics because of Keynes. (The most important, in my opinion)
Keynes brought logic and common sense to the field of economics—replacing much of the illogical & self-serving economic theory in existence prior to his time.
Keynes has been wrongly demonized by Right-wing economists as an advocate permanent massive government deficit spending to keep the economy going. In fact, Keynes NEVER proposed permanent deficit spending by government, and NEVER advocated a permanently controlled economy by the government.
Keynes central theme was the importance of Aggregate Demand, and that it drove the economy. Investment and production were the result of Aggregate Demand, not the cause. Increased investment & production were responses to increased aggregate demand.
Only in cases of severe aggregate demand deficiency in the private sector—severe enough to cause a severe & prolonged depression—severe enough to cause large amounts of existing industrial capacity to sit idle—resulting in major declines in wealth production—did Keynes suggest increased government spending. In such cases, increased government spending might be justifiable to compensate for deficient aggregate demand in the private sector.
What Keynes's opponents fail to acknowledge, however, is that Keynes believed government "pump-priming," and the deficit spending it necessitated, should NOT be permanent policy. It was a temporary fix only. Keynes maintained that government pump-priming should stop when the economy had normalized. He also stated that the resulting deficit needed to be paid off as soon as possible.
Again, Keynes advocated government "pump-priming" as temporary solution to a crisis situation only, not as permanent policy. (A 50% drop in GDP definitely falls into the "crisis" category.) Again, the non-permanence of pump-priming is what his detractors have conveniently, maliciously & disingenuously ignored.
Prior to Keynes, economic "theory" was concerned only with how to help the rich get richer. It was all about concocting myths to prove how helping the rich was in everyone's best interest. Needless to say, this required a level of "creativity" that would make Greek mythologists blush. Say's law was a classic example, stating that "Supply creates Demand."
Say's law was concocted to justify aiding and abetting of the rich--giving cover for their quest to become even richer. It legitimized advancing the interests of the wealthy, at the expense of the pooor. Say maintained that anything produced would create it's own demand. This justified taking from the poor--and giving it to the rich--because it helped the rich produce more goods--automatically creating demand for those goods.
Wishful thinking was the biggest motivation to accept Say's law. It was beneficial to the rich. It's what they wanted to believe. So it was accepted it as gospel.
Another reason for Say's law's acceptance, however, was that there was some truth to it. This "truth" relates to the difference between Macro- & Micro-economics. The field of Macroeconomics—with its tenet of Aggregate Demand—didn't even exist during Say's time. (It wasn't until the 1900's, long after Say's time, that Macroeconomics became a recognized area of economics.) Without Macroeconomics, and its concept of Aggregate Demand, Say's law would be true. If a new product was created that has any value at all (i.e., something other than a square wheel, a screen door on a submarine, etc.), demand for the product will eventually occur. But this is on a microeconomic scale only, not on a macro scale. No additional Aggregate Demand is created, and no increase in Aggregate Demand Demand occurs. Demand for the new product subtracts from demand for other products. The new product only shifts demand from one product to another. Though a new product may increase Aggregate Supply, it does not increase Aggregate Demand.
In contrast, however, increased Aggregate Demand DOES increase aggregate supply (save for the theoretical case of a 100% fixed aggregate supply—a case that never exists in the real world.) As such, increasing Aggregate Demand drives economies, while increasing supply does not. Without increased aggregate demand, or at least an anticipated increase in aggregate demand, production will not increase. Producing unsellable or surplus goods has no benefit. In fact, surplus good production may be detrimental. In the absence of increased aggregate demand, surplus production reduces future production demand—reducing demand for workers to provide future production—thus reducing the aggregate wages needed to create additional aggregate demand.
The beauty of Keynes's aggregate demand theory is that it's derivable from simple common sense and logic. I know this, because I did it myself. Several years back, I concocted my own aggregate demand theory, prior to any formal Economics education beyond an Intro Microeconomics course. I even labelled my own concoction "aggregate demand." (I really did think I'd come up with something new.) It wasn't until later I discovered that Keynes had already derived the "aggregate demand" concept (over a 1/2 century earlier). Needless to say, the fact that I concocted a nearly identical "theory" myself, makes me a real proponent of Keynesian aggregate demand theory and importance.
It's now time for the media, financial industry, and our Corporate plutocracy to stop bastardizing Keynes. He contributed more to the field of economics than any other individual in history. It's time to stop propagandizing the false, self-serving, and deliberate misinterpretations of his work. Keynes replaced economic theories based on wishful thinking and self-interest—with theories based on common sense and logic. There's much we can learn from him today.
Again, I welcome an in-depth discussion of Keynes.
|
|
|
Keynes
Jan 20, 2008 14:34:03 GMT -6
Post by Keynesian identity on Jan 20, 2008 14:34:03 GMT -6
I completely agree with you that he has been wrongly judged by conservative economic thinkers who tend to more free market thinking of which is a good example of self serving economics the invisible hand metaphore and so on.I believe Keynes was particularly insightful on his belief that markets are inherently inefficient i think this is a key point. I think its sad quite frankly that Conservative thinkers have said that Keyenesian economics have failed(i know national review takes such a stance)and i think some informed discussion about Keynes would be usefulespecially further discussion about aggregate demand.
|
|
|
Keynes
Jan 20, 2008 14:36:44 GMT -6
Post by Keynesian identity on Jan 20, 2008 14:36:44 GMT -6
by the wayif anyone here consider themselves a left wing economic thinker but doesnt know who Keynes is i think you should look into him its important
|
|
|
Keynes
Jan 20, 2008 15:52:47 GMT -6
Post by Keynesian identity on Jan 20, 2008 15:52:47 GMT -6
It is true that Keynes didnt advocate things like that
|
|