CapitalistImperialistPig

Like everybody else, Keynes made mistakes. A lot of people who accepted his ideas also have made mistakes. His core ideas, the ones that have provided the the subject of innumerable policy debates, are a critique of Neo-classical economics with the follwing key elements (Wikipedia): Keynes' theory was significant because it overturned the mainstream thought of the time and brought about a greater awareness that problems such as unemployment are not a product of laziness, but the result of a structural inadequacy in the economic system. He argued that because there was no guarantee that the goods that individuals produce would be met with demand, unemployment was a natural consequence. He saw the economy as unable to maintain itself at full employment and believed that it was necessary for the government to step in and put under-utilised savings to work through government spending. Thus, according to Keynesian theory, some individually rational microeconomic-level actions such as ...

Keynes (who else) had the ultimate riposte to those who dismiss economic ideas, theories and models: The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back. I am sure that the power of vested interests is vastly exaggereated compared with the gradual encroachment of ideas…. But, soon or late, it is ideas, not vested interests, which are dangerous for good or evil…

The history of market economies tends to show that they are unstable. There is a strong tendency for nearly all resources to accrue to a few, and that destabilizes the society. The ancient Mesopotamians dealt with this with occasional cancellations of all consumer debts, an idea taken over by Judaism in such traditions as jubilee. Those techniques are pretty disruptive on their own account, since credit is going to dry up any time a forgiveness looms. The Egyptians invented another method, or so I hypothesize. I call it the Old or Original Keynesian method. The essential idea is to employ, feed, etc. agricultural workers by having them erect vast public works in the off season - originally pyramids, but later other works. This distributed the surplus accumulated by the wealthy, and kept the populace fed and out of trouble. Similar devices were employed by subsequent civilizations, and the Romans even improved on the idea by building useful public works: roads, aqueducts, fortifi...