NationStates Jolt Archive

In my economics class, we're currently talking about John Maynard Keynes. He's basically the one who came up with the idea behind the mixed economies that most of europe are running under right now. I was wondering why exactly this idea (and the economic security it provides) has so many in America frothing at the mouth.

To be more clear, he advocated a limited, but present, role of intervention by the government to protect people while the economy takes a ride on the downslope of a business cycle.

In my economics class, we're currently talking about John Maynard Keynes. He's basically the one who came up with the idea behind the mixed economies that most of europe are running under right now. I was wondering why exactly this idea (and the economic security it provides) has so many in America frothing at the mouth.

To be more clear, he advocated a limited, but present, role of intervention by the government to protect people while the economy takes a ride on the downslope of a business cycle.

I hate Keynesianism because it doesn't even achieve its own goal of economic security. The only way to prevent the business cycle is to have a 100% gold standard- there is no other way. In fact, the other ways just make everything get worse.

i disagree with Keynes (that which i remember from economics anyhoo) that the labour market will automatically stabilise. Keynes has been debunked and replaced in modern economics in terms of a move from fiscal to monetary policy.

so in summary: meh.

In my economics class, we're currently talking about John Maynard Keynes. He's basically the one who came up with the idea behind the mixed economies that most of europe are running under right now. I was wondering why exactly this idea (and the economic security it provides) has so many in America frothing at the mouth.

To be more clear, he advocated a limited, but present, role of intervention by the government to protect people while the economy takes a ride on the downslope of a business cycle.
It has been shown that Keynesian economics only applies in the short term. In the long term the labor market always adjusts to reach equalibrium. Secondly Keynesian policies create problems with the 'crowding out effect," especially in the long term.

Anyway, I wouldn't say that Keynes favored what we would identify today as a 'mixed economy'. He favored a fairly open market that was a bit more regulated than classical economies.

That said, John Maynard Keynes was possibly the greatest economist of all time.

Keynes recognized the fact that there would be businesses that outperformed other businesses. That competition could lead to selection. Tough Sh!t. Welcome to real life. If one company does better than another, and gains an advantage, then that company has every right to use that advantage. If ohter copmanies go bankrupt, so be it. There will be other individuals that will come up with new ideas and new products, new techniques and new services. Keynes was a genius. Also, it should be noted that his philosophies were the order of the day in the U.S. when American industry experienced it fastest growth rate. Anybody see a connection?

That said, John Maynard Keynes was possibly the greatest economist of all time.

Mises > Keynes. I mean, he predicted the Depression in 1921, whereas Keynes lost a crapload of money in said event.

Keynes recognized the fact that there would be businesses that outperformed other businesses. That competition could lead to selection. Tough Sh!t. Welcome to real life. If one company does better than another, and gains an advantage, then that company has every right to use that advantage. If ohter copmanies go bankrupt, so be it. There will be other individuals that will come up with new ideas and new products, new techniques and new services.

You get a gold star! :D

Mises > Keynes in rhetoric
Keynes > Mises in contributions to economics

http://www.marxists.org/reference/subject/economics/keynes/general-theory/ch24.htm

Just thought I'd throw that in. Keynes is sometimes misinterpreted these days - this chapter does a good job of outlining what he really believed.

Keynes had some good ideas, but his thinking also had flaws that ultimately had to be addressed by new ideas in economics; it helped us get out of the Depression but it also caused stagflation in the early 1970's.

By and large, his ideas work but we need other theories to fill in the gaps that his concepts don't address.

Mises > Keynes in everything worthwhile
Keynes > Mises in being trendy

Fixed.

In my economics class, we're currently talking about John Maynard Keynes. He's basically the one who came up with the idea behind the mixed economies that most of europe are running under right now. I was wondering why exactly this idea (and the economic security it provides) has so many in America frothing at the mouth.

To be more clear, he advocated a limited, but present, role of intervention by the government to protect people while the economy takes a ride on the downslope of a business cycle.

Keynesian economics also proscribes that the government toy with inflation to effect job growth, which is fundamentallly flawed, as has been shown in the 1960's and 1970's, where stagflation (a combination of unemployment and inflation) were serious economic problems.

Not only that, but since deregulation the American economy has experienced tremendous innovation, and notable reductions in prices in many of the previously regulated fields. While inefficient behemoths of the past are slowly being gobbled up by more efficient and effective firms. I'd have to say that Keynesian economic policies are flawed.

That said, John Maynard Keynes was possibly the greatest economist of all time.

Nah, that's Smith, after all, Smith founded the field.

Not only that, but since deregulation the American economy has experienced tremendous innovation, and notable reductions in prices in many of the previously regulated fields. I'd have to say that Keynesian economic policies are flawed.

By themselves, they're flawed; however, there are some ideas that have merit like the use of fiscal stimulus to accelerate economic growth. Of course, if you're a proponent of rational expectations theory you'd probably see that as a moot point, but there's some evidence that shows fiscal stimulus can have a beneficial or negative casual effect on economic cycles.

Pretty much all economic theories are not perfect, because economics can't be quantified like the physical sciences; all of the social sciences have to adopt a group of theories to explain all the possible outcomes of a particular environment.

Nah, that's Smith, after all, Smith founded the field.

And the Chinese were the first to implement the earliest form of capitalism; unfortunately, their nascent capitalist development was thwarted by political change and lost but it was still a major development. One can only wonder at what might have happened were the Chinese to capitalize on their 7th-11th century AD "Industrial Revolution" and develop it further.

Keynes recognized the fact that there would be businesses that outperformed other businesses. That competition could lead to selection. Tough Sh!t. Welcome to real life. If one company does better than another, and gains an advantage, then that company has every right to use that advantage. If ohter copmanies go bankrupt, so be it. There will be other individuals that will come up with new ideas and new products, new techniques and new services. Keynes was a genius. Also, it should be noted that his philosophies were the order of the day in the U.S. when American industry experienced it fastest growth rate. Anybody see a connection?
It should be noted that his ideas were used by FDR, which only deepened the depression. I see a connection: his ideas sucked ass.

That said, John Maynard Keynes was possibly the greatest economist of all time.

Mises > Smith > Keynes > Marx

Mises > Smith > Keynes > Marx

e-High five! :D

Nah, that's Smith, after all, Smith founded the field.

Nope- that was the Late Scholastics. Smith unfortunately introduced a labor theory of value, disliked luxury spending, and neglected the importance of entrepeneurship (he disliked rent).

The General Theory... certainly is not the end all, be all of economics. After all, a book that credits fluctuations based on expectations as "animal spirits" is surely not comprehensive. That said, it lays excellent groundwork for modern economists. So far, I've only read about The General Theory... in economics textbooks, but I have a copy which I plan to read after I finish The Wealth of Nations. My general understanding is that some additions to Keynes' basic model, like rational expectations, actually create a fairly stable model that can explain pretty much every economic event we have seen thus far.

e-High five! :D

*returns the e-High five*

Austrian School FTW! :D