Introduction to Keynes
John? Maynard john maynard keynes (1883- 1946), the first generation of Baron Keynes (one of the most influential economists in modern western economics), whose macroeconomics, psychoanalysis founded by Freud and relativity discovered by Einstein are called _ _ people in the 20th century. Keynes's thought is not only a book theory, but also an effective countermeasure during the worldwide economic depression from1920s to191930s, and a policy thinking during the prosperous period of many capitalist societies from1950s to1960s, so some people in the world praised it as "capitalism". Savior? (or translated "Savior"), "Father of postwar prosperity" and so on. Keynesian thought, which once ruled capitalism, has also become one of the schools of economics, known as the "Keynesian School", and several branches have been derived, and its influence continues to this day.
The story of Keynes
One day, Keynes and his friends were on vacation in Algiers. The two of them went out into the street and let a group of local children shine their shoes. The children cleaned up, but Keynes gave little money. The angry shoeshine boy threw stones at Keynes and his friends. Seeing this, my friend complained to Keynes why he didn't give the children more money. Keynes replied, "I will not devalue the currency." This made this friend laugh and cry.
One more thing, it was the day of 1934. Professor Hoover of Duke University and Keynes stayed in a hotel in Washington. They had dinner together. In this process, Professor Hoover carefully selected towels, mainly to avoid messing up other towels. Keynes laughed at Professor Hoover when he saw it. I saw him sweep two or three towels on the ground with his arm, regardless of others. Professor Hoover was very surprised at once. He asked Keynes why he did it. Keynes joked: "What I have done is more conducive to stimulating the development of the American economy than avoiding waste. Because I messed up these towels, someone came to wash them This indirectly promotes people's employment. " Hoover was also speechless about this explanation.
The Historical Influence of Keynes
Keynes's influence on the world, especially on western economics, is enormous. His book General Theory of Employment, Interest and Money, like the Bible in economics, became a magic weapon for many countries to develop their economies in the 1940s and 1950s. Keynes's influence can be described in many ways.
First of all, the emergence of the general theory of employment, interest and money has changed the research direction of western economics and marked the emergence of macroeconomics. Compared with previous economics, macroeconomics aims to study the overall utilization of the economy. Keynes denied Say's law, which was once regarded as truth. He believes that there are obstacles in the adjustment of market prices, and all markets in Walras are in a general equilibrium state, which is only a written theory or a special case. In reality, the market is often in an unbalanced state of supply and demand, which is the main state of market economy.
The second influence of Keynes is to transform the allocation of economic resources, the object of market research, into the field of overall utilization of economic resources. He believes that under the condition of capitalist market economy, the three laws will lead to different overall effective demand in the market. These three laws are family's "liquidity preference", "diminishing marginal propensity to consume" and "diminishing marginal return on capital".
Because the economic system itself does not have the mechanism of automatically favoring the employment balance, Keynes advocated that the government should take decisive action in the economic crisis, adopt active fiscal and monetary policies, give play to the "multiplier effect" of related demand, and realize full employment in society.
However, the impact of Keynesian theory on the economy is not static. The oil crisis of 1973 failed Keynesianism and was gradually abandoned by capitalist countries.
But generally speaking, Keynes's influence can not be ignored by later economists. Economic uncertainty tells us that no economic theory completely conforms to the objective law of economic development, and we can only take its essence and discard its dross.
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