Economics Dictionary of ArgumentsHome
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| Keynesianism: Keynesianism refers to economic theories developed by John Maynard Keynes, advocating government intervention in the economy through fiscal and monetary policies to stabilize fluctuations, manage demand, and address unemployment during economic downturns. This approach emphasizes boosting demand through public spending and monetary policies to maintain economic stability. See also Government spending, Monetary policy, Demand, Supply, Economy, Fiscal policy, Labour market._____________Annotation: The above characterizations of concepts are neither definitions nor exhausting presentations of problems related to them. Instead, they are intended to give a short introduction to the contributions below. – Lexicon of Arguments. | |||
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Murray N. Rothbard on Keynesianism - Dictionary of Arguments
Rothbard III 776 Keynesianism/Rothbard: One of the two major pillars of the Keynesian system (…) is the proclamation that savings become equal to investment only through the terrible route of a decline in social income. The (implicit) foundation of Keynesianism is the assertion that at a certain level of total social income, total social expenditures out of this income will be Iower than income, the remainder going into hoards. >Hoarding/Rothbard. This will Iower total social income in the next period of time, since (…) total income in one "day" equals, and is determined by, total expenditures in the previous "day." Consumption function: The Keynesian "consumption function" plays its part in establishing an alleged law that there exists a certain level of total income, say A, above which expenditures will be less than income (net hoarding), and below which expenditures will be greater than income (net dishoarding). But the basic Keynesian worry is hoarding, when total income must decline. >Consumption function/Rothbard. Rothbard III 778 Keynesian law: The Keynesian law asserts social expenditures to be Iower than social income above point A, and higher than social income below point A, so that A will be the equilibrium point for social income to equal expenditure. For if social income is higher than A, social expenditures will be Iower than income, and income will therefore tend to decline from one day to the next until the equilibrium point A is reached. If social income is Iower than A, dishoarding will occur, expenditures will be higher than income, until finally A is reached again. RothbardVsKeynes/RothbardVsKeynesianism: (…) suppose that we now grant the validity of such a law; the only comment can be an impertinent: So what? What if there is a fall in the national income? Since the fall need only be in money terms, and real income, real capital, etc., may remain the same, Why any alarm? The only change is that the hoarders have accomplished their objective of increasing their real cash balances and increasing the real value of the monetary unit. It is true that the picture is rather more complex for the transition process until equilibrium is reached, (…) But the Keynesian system attempts to establish the perniciousness of the equilibrium position, and this it cannot do. >Free market/Keynesianism, >Unemployment/Keynesianism. Rothbard III 783 Unemployment: The sum and substance of the "Keynesian Revolution" was the thesis that there can be an unemployment equilibrium on the free market. (…) the only sense in which this is true was known years before Keynes: that widespread union maintenance of excessively high wage rates will cause unemployment._____________Explanation of symbols: Roman numerals indicate the source, arabic numerals indicate the page number. The corresponding books are indicated on the right hand side. ((s)…): Comment by the sender of the contribution. Translations: Dictionary of Arguments The note [Concept/Author], [Author1]Vs[Author2] or [Author]Vs[term] resp. "problem:"/"solution:", "old:"/"new:" and "thesis:" is an addition from the Dictionary of Arguments. If a German edition is specified, the page numbers refer to this edition. |
Rothbard II Murray N. Rothbard Classical Economics. An Austrian Perspective on the History of Economic Thought. Cheltenham, UK: Edward Elgar Publishing. Cheltenham 1995 Rothbard III Murray N. Rothbard Man, Economy and State with Power and Market. Study Edition Auburn, Alabama 1962, 1970, 2009 Rothbard IV Murray N. Rothbard The Essential von Mises Auburn, Alabama 1988 Rothbard V Murray N. Rothbard Power and Market: Government and the Economy Kansas City 1977 |
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