Kevin_Kennedy
Defend Liberty
- Aug 27, 2008
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Now I just want to revisit these points.
I think it's entirely possible to verify that Keynes General Theory worked. I'll have a look and see if I can find some evidence.
As I understand it one of the central tenets of classical economics is the idea of the free market can regulate itself. Well we know that's a fail.
There's nothing command and control about Keynes that I can see. But then I haven't finished reading the General Theory yet. Command and control is a long way from stimulus spending.
The economy in my country seems to be reasonably robust in the wake of the GFC. Properly regulated financial institutions worked okay and our federal government instituted stimulus spending programmes which seem to have staved off a recession. Whether they will be seen as successful in the medium term remains to be seen but right now things look pretty good. Maybe after this latest collapse we may finally see some evidence about the validity of Keynesian theory.
We know that the free market has failed to regulate itself? When did we learn this? Have we ever tried it out?
The US did. It failed and nearly took down the rest of the world.
I know, I know, the argument is that the regulations, such as they were, were at fault. They were at fault alright, for being bloody useless. As I said, a pure free market is an abstract, it doesn't exist in reality, at least not in advanced industrial societies.
If the free market doesn't exist in reality how did it fail to regulate itself and nearly bring down the rest of the world?