See you keep saying nobody understands it properly, and I'm inclined to agree with you, but you also don't like it being called "demand-side". So... I'm gonna ask for clarification on what you think Keynesian theory is?
I thought I answered that earlier.
But for clarification sake.
Keynesian economics is a set of theories based on the work of Lord John M. Kyenes. I know that sounds trite, but it's shocking the number, particularly on the left, that don't grasp that this school of thought surrounds a particular individual.
Keynes rose to prominence during the depression, particularly in Europe, due to his thesis that the business cycle could be mitigated during slumps by the introduction of capital derived from deficit spending by the government into the economy, particularly in the form of public works which would directly employ people, providing them a paycheck and increasing aggregate demand. Keynes postulated that as aggregate demand rose, production would rise to meet said demand and the engine of the economy would start to turn, pushing the economy out of recession.
Keynes described this stimulus as priming the pump, which is dependent on the theory of reverberation and the multiplier effect. In essence, as the government worker is paid to fill pot holes or dig and fill ditches, the wages they are paid would be spent in the market buying goods and services. As they bought a loaf of bread from the baker, the baker would use that money to buy flour and yeast from the miller, who would buy gasoline and mechanical parts to keep his mills operating, and on down the line. Keynes postulated that at every step, greater economic activity is created than the sum of the capital infused. Rothbard proved that this is not in fact true, but that is the theory Keynes operated under. Essentially Keynes believed that each dollar introduced would generate 1.33 dollars in activity (gross oversimplification for the sake of clarity and brevity) at each of 5 economic turns, and that the activity compounded at each of the turns. So $1 becomes $1.33 which becomes $1.76 which $2.35 and on down the line.
So why is this NOT "demand side?" I mean, I used the term "aggregate demand," right? What you must understand is that Keynes never advocated this as the economic norm. His theory is that stimulation of aggregate demand could lift an economy out of recession. Once the economy resumes normal activity, then the use of deficits and stimulus ceases.
Is that more clear?
Standard Disclaimer: There is a lot more to Keynes than this, but this is the subject at hand.
