Keynsian Economics

Discussion in 'Economy' started by ElFlem, Sep 30, 2009.

  1. ElFlem
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    ElFlem Rookie

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    Hey, I'm in Econ and we briefly went over Keynesian economics. I agree that most of Keynes' concepts we went over are believable, however, his concept about the obligation of society to provide employment to individuals in field that they are educated or have experience in. What are the prominent theories that are available about how society/government should provide jobs where there is a lack of demand? Roads can be built, parks can be monitored, street sign and cones can be manufactured but this leaves a whole myriad of other jobs that are determined directly by demand such as nursing, engineering etc...
     
  2. Oddball
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    Oddball BANNED Supporting Member

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    Keynes was an economic witch doctor and, not coincidentally, deeply into eugenics.
     
  3. Diuretic
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    Diuretic Permanently confused

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    This is a technical question isn't it? If so you want an answer from someone familiar with economics (which means I'll keep quiet). If you want an answer based on other ideas then they might be forthcoming.

    As for Keynes - his ideas worked. Just as well for capitalism because his General Theory was a flat-out attack on Marxism. Commenting on his General Theory he wrote:

    "To understand my state of mind.....you know that I believe myself to be writing a book on economic theory which will largely revolutionise...the way the world thinks about economic problems....there will be a great change, and, in particular, the Richardian foundations of Marxism will be knocked away."

    Why the free market fundies demonise Keynes I'll never know.
     
  4. Oddball
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    Oddball BANNED Supporting Member

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    Because he's an economic voodoo witch doctor, and how his theories have "worked" is a matter of conjecture, as nobody can turn back the clock to see what would've happened otherwise.

    But hey....Just throw a few more vestal virgins in the volcano, to make the copra crop come in!
     
    Last edited: Sep 30, 2009
  5. Kevin_Kennedy
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    Kevin_Kennedy Defend Liberty

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    Because Keynes did not advocate free markets. Why do the Keynesians "demonize" free market advocates? Because they advocate free markets. Just about any group demonizes other groups that don't agree with them.
     
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  6. Paulie
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    Paulie Platinum Member

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    REAL free market "fundies" demonize him because he advocated the use of Federal Reserve monetary policy to couple with his ideas on fiscal policy.

    A real free marketer does not accept the Federal Reserve in its current form, because it literally flies in the face of what a REAL free market actually is.
     
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  7. midcan5
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    midcan5 liberal / progressive

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    The Danes are an example of one answer to your question. Societies function to maintain themselves and keep themselves healthy. Even Adam Smith who the wingnuts quote often recognized this fact. Conservatives dislike Keynes for the same reason Marxists dislike Keynes, Keynes was a brilliant man who recognized that economics is not magic and sometimes required a swift kick.

    Danish example.

    "Previously, unemployment benefits had been not only very generous--equal, in some cases, to 90 percent of lost wages--but also essentially unlimited. Under a new scheme pushed through by the Social Democrats, the government began limiting assistance to four years--and, even then, only on the condition that beneficiaries worked or enrolled in job training. Essentially, Rasmussen was triangulating between the two main poles of the country's political debate, in a manner much like the one Bill Clinton was employing in the United States at roughly the same time. But, because politics in Denmark were generally far to the left of the United States, the resulting compromise actually looked quite different. Relative to Clinton's welfare reform, Rasmussen's invested much more money in worker-counseling and training. The explicit goal was to recognize a social compact: Just as the unemployed were obligated to find new jobs, so the government was obligated to make sure the jobs were there (even if it meant creating them on the public payroll) and that the unemployed received proper training to succeed."

    Jonathan Cohn: Denmark as Neoliberal Utopia (New Republic, 2007)

    "If you believe the conservative rhetoric on economics, this combination of high taxes, a large public sector, and lavish welfare benefits ought to be killing the Danish economy. But it's not. In fact, Denmark's economy has thrived. And nowhere is that more apparent than in the job market. By the time Rasmussen left office in 2001, the unemployment rate had fallen from a 1994 peak of 9.6 percent to 4.3 percent; in 2002, it fell below the U.S. rate, where it has remained ever since. For the most recent quarter of 2006, Denmark's standardized unemployment rate was 3.6 percent, compared with 4.7 percent in the United States. Moreover, while Europe has a reputation for fostering cadres of idle youth (a reputation that, in countries like France, has at least some basis in reality), in Denmark, a mere 3 percent of its 15- to 19-year-olds are neither in school nor working--the second-best rate in the developed world. (Tiny Luxembourg is first.) In the United States, by comparison, the figure is about 7 percent."


    Jonathan Cohn: Denmark as Neoliberal Utopia (New Republic, 2007)



    "What improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable." Adam Smith 'The Wealth of Nations,' Book I Chapter VIII

    "I. The subjects of every state ought to contribute towards the support of the government, as nearly as possible, in proportion to their respective abilities..." Adam Smith
     
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  8. Diuretic
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    I think Keynes simply knew there is no such thing as a free market, it's an abstract concept useful for thinking about issues but it can't exist in reality. That's possibly why the advocates of the free market get cranky with him. Keynes' General Theory works in reality and so doing it dismantles the previous classical model. I'm no economist so I'm not able to argue the finer points but I'm able to see the historical effects of Keynes' General Theory.
     
  9. Diuretic
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    I don't know how many alternative economic theories were available at the time, but it was clear that classical theories had failed. It's also clear that Keynes' theory worked in practice. There's nothing remotely theoretical about the fact that Keynes' theory worked.
     
  10. Oddball
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    That they have been claimed to have worked is entirely subjective opinion, not physically verifiable fact.

    The classical theories didn't "fail" any more than meterology can fail.

    That Keynesean models are used for attempted economic command and control makes them inherently anti-free market.
     

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