Did John Maynard Keynes Save or Destroy Capitalism?

Only available on StudyMode
  • Download(s) : 114
  • Published : June 21, 2012
Open Document
Text Preview
Question 1: Did John Maynard Keynes save or destroy capitalism? Refer to the Depression and to the resulting economic system: corporate consumerism, neo-liberalism and globalization In response to the question, I agree that Keynes did not completely destroy capitalism systems. However, it is difficult to give a clear-cut answer in terms of negative effects of Neo-Liberalism. In fact, there is much scholarly debate on his contribution to “restructure” capitalism; Keynes destroyed capitalism due to government interference and eliminate competition in market to the right economists. On the other hand, the left economists regard his theory as “new form of capitalism”, known as neo-capitalism. Other scholars think that his idea of economic reform was a double-edged sword. The new system of capitalism that can be seen today called Keynesian changed to the system improves wages and employment rate, but making people more complacent and more materialistic through the media. In this essay, I will discuss about Keynes’ work and resulting to the neo-liberalism. The classical capitalism believed in Laissez Faire policy, which means that there should be no government interference or regulation in the market. Classical capitalists believed that the balance between supply and demand would bring about full employment. However, during the US Great Depression, the unemployment reached about 25 percent and millions of people had lost their life saving as well as their jobs, there was no clear path out of the depression in the United States. According to Keynes, the root cause of economic downturn is insufficient collective demand. Rising unemployment and declining profits further depress demand. People became pessimistic thinkers, and tend to save their money. Keynes believed that there was only one way out. He put forth about the role of government in a capitalist economy, and that was for the government to start spending in order to put money into private-sector pockets and get...
tracking img