The Failure of Keynesian Economics

So, Capitalism did exist before Keynes? Then why is Keynesianism necessary for Capitalism?

Typical Reiverism.

You may think the ranting of Marx and Schumpeter against human nature have value in economics, it says far more about your attitude toward people than economics.

 

Try and read what I say: "We've seen significant changes reflecting the rise of the managerial class and the exploitation of economies of scale. Whilst that opens up both producer and consumer opportunities, it also increases the risk of economic crisis".

Keynesianism's importance has increased with how capitalism has evolved. The ingredients for success are also the same ingredients that increase the risk of economic crisis

I merely appreciate that Marx and Schumpeter continue to play a significant role in economic theory. That's not an earth shattering acknowledgement of course. Its bleedin obvious! In contrast, you've merely tried to foot stamp whilst providing a particularly insipid statement. If you want to attack aspects of political economy please make sure you have something to back it up.

 

I read what you said, and you ignored my question.

Are the sudden changes in thousands of years of capitalism natural evolution? Or that Keynesianism gave politicians a way to game capitalism?

You keep saying this crap like it is a know fact. What is "bleedin obvious" is your bias.

Marx and Schumpeter didn't understand human nature. Then tried to describe a utopia based on what they thought people should be.

Economics is far more about people than math (even Keynes had his animal spirits). Get human nature wrong, get economics wrong.

 

No, I clearly answered it. You'd have a point if capitalism was somehow a stagnant proposition. It isn't. As shown by liberal and social democracy, it evolves in order to maintain a level of stability (such that profit isn't threatened). Keynesianism came to the fore following significant changes in the characteristics of firms in capitalism: reflecting economies of scale and market concentration, we see the rise of a managerial class and a shift away from the invisible hand. In such an environment interventionism becomes key.

This is nonsensical. Both are used in modern economics to help us understand the characteristics of capitalism. That cannot be disputed (e.g. even orthodox labour economics, such as the efficiency wage hypothesis, has some of its roots in Marxist analysis of the complexity of labour relations).

Your dogma means that you automatically have to slam key economic thinkers. Unfortunately you don't have the economic analysis to achieve it. You're therefore left with making rather shallow comment

Behavioural economics is used to understand both firm behaviour and the nature of the labour market. Note that neither are understood within the Austrian school but are integral within post-Keynesianism

 

Do you understand profit is a small part of the equation, and isn't necessary for survival? Not losing money, even a little bit each year, is.

Like nature, Capitalism adapts. Keynesianism gave government an economic machete, which they wield with great furvor. The know they don't understand what they are doing, but that's OK, all they have to do is refer to Keynesianism, and the media nods knowingly in approval.

Understand capitalism, or pruposely misunderstand, and misstate it?

Capitalism isn't greedy, people are. Capitalism accepts that and integrates checks and balances.

Your beloved "Market Socialists" place themselves above Capitalism, intervening as the "great modulator". The greedy understand that and adapt. They become the modulators, above all those inconvenient checks and balances of Capitalism.

I slam key economic thinkers - WOW! I am but a novice when it comes to slamming everyone and everything that doesn't fit into your dogma.

Neither are understood by Austrian's? Or is Austrian economics based on the realization that human nature was too involved to be reduced to the simple math of the time?

Keynes pretended to understand human behavior by calling it animal spirits (also defining it as unknowable). But then came up with solutions so simple government could do them (disclosing his lack of understanding).

 

Teach yourself what economic profit means!

You best not go there. Evolutionary economics leads to all sort of unfortunate analysis for the fake libertarian (such as the demolition of the theoretical notion of market corrections)

That government is a key economic agent in capitalism cannot be challenged. Don't like it? Best buy yourself a black balaclava!

Try and understand unemployment without reference to efficiency wages. You'll struggle. Try and understand economic outcome without reference to exchange theory and conflict theory. You won't be able to (except by promoting a tiresome view of capitalism based on utopianism)

Cliché that ignores the impact asymmetric information.

Completely wrong. It refers to the protection of property rights. In contrast, you favour theft.

No you foot stamp about great thinkers and give shallow remark. Its the Austrians that have to slam these key political economic schools. Coherent theory of the firm and labour theory capable of explaining economic phenomena is dangerous stuff!

The Austrians do not have a coherent theory of the firm. You'd have to refer to the likes of new institutionalism for that. Try thinkers like Coase and Penrose (with the former actually producing analysis consistent with Marx's original analysis into property rights)

The Austrians have no understanding of the labour market. That involves an understanding of conflict and therefore more important heterodox schools of thought.

Again you only demonstrate that you haven't understood Keynes' output. Keynes' use of behavioural economics is much more extensive. For example, consider a paper such as Pech and Milan (2009, Behavioral economics and the economics of Keynes, Journal of Socio-Economics, Vol 38, pp 891-902). This provides an in-depth analysis into how Keynes made use of the following concepts: Heuristics; Conventions; Focal points; Conformity; “Beauty-Contests”; Animal spirits; Overconfidence; Unrealistic Optimism; Status Quo Bias; Ambiguity Aversion.