Keynes: Economic Visionary

A detailed Summary of Keynes: Economic Visionary

It should be said that the greatest economic thinker of our time was John Maynard Keynes. His economic postulates were of great importance to a world that was ravaged by depression, underemployment, and a lack of economic understanding for these events. Keynesian thought was to change all this and provide a more accurate tool of analysis and theory of policy. The so-called 'Keynesian economics'1 ended up being a perfect fit for its time, for had Keynes postulations come earlier his theory would probably have been largely ignored.

During earlier periods, classical economic thinking dominated the scene with its more lassiez-faire policies. While some intervention was seen as necessary, it was primarily held that the market will adjust itself. These orthodox economic thinkers were strong believers in the efficiency and equity of the market. In their opinion the best course of action was to let the market economy fix itself. The classical reliance on the adjustability of markets was

The new political and economic landscape created in the wake of The Great Depression and World War I would clear the way for Keynesian ideas to be excepted into the mainstream. The first barrier was the defeat Say's Law that "the flow of income back from the price totals precisely the purchasing power necessary to but the product. There could . . . be no shortage."4 The idea was that supply created its own demand. However, the economy of the post depression era spread doubt onto the validity of this claim. The problem was that aggregate demand could not keep up with supply. When workers were given lower wages to increase employment, according to classical economic thought, they were simply given less disposable income. With less money to spend they simply didn't buy as much and with this lower level of consumption came fewer products being purchased and also fewer products being needed for production. Instead something else needed to be done to remedy this situation.

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Some common words found in the essay are:
Law Markets, Maynard Keynes, Say's Law, War Keynesian, Fusfeld According, , economic thinkers, adjustability markets, classical economic, say's law, adjust themselves, held belief, fewer products,

Approximate Word count = 669
Approximate Pages = 3 (250 words per page double spaced)

Category: Miscellaneous

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