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Amazing how such a small book could give so much information about an economic theory that changed the world. In “Keynes and After,” Michael Stewart does not waste any words in telling the reader how revolutions in thought occur when the prevailing theory can no longer be reconciled with the observable facts. That expression (in the “conclusion” in the book) could itself be an excellent thought for the current global politicians who seem to be clueless and not seeing the observable facts as to how to save the global economy.
Stewart emphasizes the need for a genius to arrive in the scene in addition to prevailing condition for ‘revolution in thought” and subscribes that John Maynard Keynes is that genius who arrived at that appropriate time in history.
According to the author, the Keynesian arose as an answer to the chronic unemployment problem United Kingdom faced during the 1920 and the 30s. In response to that, Keynes advocated active government involvement in creating well-paid jobs (for consumer to have enough money to spend and save), enough liquid cash and favorable condition for businesses to prosper. Common sense should dictate that this is practical. Further, facts show that this brought up the longest period of prosperity in the western democracies that practiced Keynesian economic policies. But when inflation began creeping up in the 1970s, even it had nothing to do with Keynesian and had more to do with increase in oil prices and devaluation of the dollar and consequential hike in commodity prices, a new group of economist--who were mostly the rebirth movement of the classical economists—sprang up under a new label called “monetarists.” The reader could surmise that monetarists in another name are the same “Practical men, who believe themselves to be exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authoriČty, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.”
Thus beginning the 1980s, it was monetarism that began to take hold of the world including the policies of the IMF and the World Bank that contributed to the destruction of ailing nations economically by applying the misguided monetarist economic theory. Having destructed the world economy by applying monetarism one can ironically hear those practical men who are still slaves to some defunct economist blaming Keynesian for the damage setting aside the influence of monetarism propagated by Reagan Thatcher team with the help of the rest of the developed economies that got drunk with monetarism.
Stewart concludes that neo-Keynesian as the answer to the current economic crisis we face. Let’s hope practical men and women in power consider that alternative before the world engulfs in bloody revolutions professed by Marx with the knowledge that those who govern are blind to observable facts, unless another genius with the right leadership qualities spring up to wake up the world .
PREFACE TO SECOND EDITION
KEYNES THE MAN
ECONOMICS BEFORE KEYNES
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