Just because this came up today...about so many things being called out incorrectly as socialism, or communism by people who have lost the thread, and farmer bailouts are due to Trump’s misguided tariff issues mostly because 1) he's stuck in the past, a defective past, and 2) he doesn't usually know what he's talking about or 3) understand much of anything beyond his one trick pony act.
So much confusion where it’s just…not what is claimed. So I posted about it...
A friend pointed out: “From a purely economics perspective, government bailouts are most closely aligned with Keynesian economics. Specifically, the Keynesian Multiplier principle.”
I responded: “Agreed. An important distinction. Keynesian interventions like bailouts are tools meant to stabilize markets. The problem isn’t the economic theory behind them; it’s when they’re used as ad-hoc political fixes or to paper over bad leadership decisions, where this ‘mess’ really comes from.”
He replied back: “Agreed. Even Keynes argued that when the full effect of the multiplier had been achieved, the government intervention (spending, bailout, etc.) should cease. That concept was lost long ago.”
And that, led me to all this...
Here are a few concise, high-interest facts about John Maynard Keynes that work well in a conversation or comment thread:
1. He wasn’t anti-capitalist...he was trying to save capitalism.
Keynes believed unmanaged recessions could destabilize democracies and lead to extremism. His ideas were meant to preserve free markets by preventing economic collapse.
2. He made (and lost) a fortune as an investor.
Unlike many economists, Keynes actively traded the stock market. After early losses, he adopted a long-term, value-driven strategy and achieved impressive returns for King’s College, Cambridge.
3. He shaped the post-WWII global financial order.
Keynes was a central architect of the Bretton Woods system, helping design the International Monetary Fund and the World Bank.
4. He warned against permanent government intervention.
As your conversation noted, Keynes insisted stimulus should stop once recovery begins. He opposed ongoing deficits during economic expansion.
5. He revolutionized macroeconomics at age 36.
His landmark work, The General Theory of Employment, Interest and Money (1936), reshaped modern economics and remains one of the most influential social science books ever written.
Waikiki, Honolulu, Hawaii, 1978 photo from the balcony I spent some time reading this book on.
The iconic pink hotel on Waikiki , The Royal Hawaiian, is not only a landmark in itself but was also a favorite stay of writer Joan Didion during her Hawaii sojourns. Most famously associated with Ernest Hemingway who stayed there in the 1940s, and wrote while overlooking Waikiki, where the hotel still serves a “Hemingway Daiquiri” in his honor.
My favorite book on economics is still Small is Beautiful: Economics as if People Mattered, E.F. Schumacher (1973), a book I read in 1978 in Hawaii. I picked it up at the airport in Seattle and was fascinated by it. I still have the book today.
Schumacher thought Keynes was brilliant, but incomplete. He worked directly under Keynes.
Schumacher respected Keynes deeply, but he believed Keynesian economics didn’t go far enough in questioning:
resource depletion
environmental limits
the assumption of infinite economic growth
Schumacher’s later work, especially after he converted to Catholicism and embraced Buddhist economic ideas, pushed into moral and philosophical territory beyond where Keynes ventured.
In the 1950s, E. F. Schumacher became the Chief Economic Advisor to the British National Coal Board, but he was also invited by the Government of India as an economic consultant during the Nehru period.
Schumacher nailed the big point:
you can’t run a global economy as if nature has no limits,
people are cogs, and
bigger is always better.
He saw the environmental crisis, the alienation crisis, and the fragility of giant systems long before they arrived.
As for us, we need to better understand our reality and just, do better. Together. OK?
Cheers! Sláinte! Na zdravie!
No comments:
Post a Comment