Keynes and Government

2. Keynes held that there is a role for government within a laissez-faire market economy. According to Keynes, government should seek to achieve institutional complementary with the private sector. In essence, the goals of government should be in concert with the goals of the private sector. Thus those economies (such as Britain and the United States) which fully embraced Keynes during the post World War II era did so with the objective of creating an environment in which the market economy could thrive.

This means that regulation and government intervention takes place, with the government responsible for maintaining full-employment without inflation. Keynes also had the reduction of income inequalities as one of his goals for the state, but income disparity continues to be rife within those economies which embraced Keynesian economics. Under Keynes' vision, governments would assume central controls which would control economic factors such as the rate of taxation, interest rates, and through the government as consumer (public works). Keynes also held that governments should become more active in the investment market using communal savings during depressed economic times to provide economic stimulus through investment. Keynes also urged that governments manage their monetary systems outside the gold standard, a suggestion which led to the Bretton Woods conference and the eventual abandonment of the gold standard by major industrial nations, including the United Stat

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process results in the accumulation of capital by capitalists who may well reinvest their profit rather than distributing wealth to the laborers. Thus accumulating capital makes it easier to accumulate yet additional capital, and the end result is a growing disparity in the relative well-being of workers and capitalists in a particular society. So long as workers are perceived by capitalists to be independent entities (and indeed, so long as workers perceive themselves in the same manner), there is likely to be little change in the status quo according to Marx. It is only when workers recognize their strength in numbers and begin withholding their efforts for increased wages that there will be changes in the system. Marx went even further to suggest that eventually, there will be a revolution among workers when the disparity between the proletariat and the bourgeoisie reaches a critical level. 6. Many of Marx's criticisms of capitalism center on the role of the worker and the worker's relation to the capitalist. Given that Marx expected that the workers' revolution would take place in an industrial country, and that the factory would be the flash point for the revolution, it is not surprising that his vision did not include

Category: Economics - K