John Maynard Keynes

Now that every politician is calling for Keynesian remedies isn't it time for you to learn what Keynes's analysis is all about? The current global economic crisis has been caused by the de-regulation of financial markets over the last three decades. Yet, orthodox economic theory during this period provided the rational for this political belief in the desirability of free efficient markets. This volume explains how, after the collapse of financial markets in 1929 led to the Great Depression, John Maynard Keynes, the greatest economic thinker of the 20th century, developed an alternative analytical framework to this orthodox theory. Keynes's alternative theory explains why this free efficient market theory is not, and cannot be, applicable to the entrepreneurial, market-oriented system in which we live. Instead, with unregulated or under-regulated markets the economy will be extremely volatile. Booms (investment bubbles) are likely to be followed by catastrophic collapses. In the absence of positive government action, long periods of economic stagnation could follow. To avoid these catastrophic collapses and periods of stagnation, Keynes indicated that governments have two important roles to play. First governments must develop institutions, rules, and regulations that maintain the stability and liquidity of financial markets, domestically and globally. Second, the government must take whatever action necessary to make sure that the full employment of resources are continuously utilized in producing desirable and productive goods and services. Only then can we eliminate the two outstanding faults of our entrepreneurial system -- (1) the failure of the system to provide full employment and (2) the arbitrary and inequitable distribution of wealth and incomes.