Keynesian Economics

John Maynard Keynes was a British economist. He had a lot of theories about economics, but it basically boils down to this –

The government has to intervene in the economy. In a rescission, government has to increase spending to increase demand. During a boom, the government needs to reduce expenditures to avoid over-heating the economy.

The opposite of Keynesian economics might be Milton Friedman’s monetarist theory, which says that to control the economy, we need to control the supply of money (Friedman was an open critic of Keynes).

Another opposite might simply be…nothing. Let the free market fix itself without the government being involved.

Why I Looked It Up

I had known the term for years. I really have no excuse for not knowing this off the top of my head, because I briefly majored in economics in college.

I did know it had something to do with Left-wing politics, because conservatives generally speak about it with disdain.

Postscript

In Knowledge and Power, the author says:

“Your income is someone else’s spending” is a cardinal truth of Keynesianism. Such eminent figures as Paul Krugman believe it is a fair summation of economic reality. It describes a circular ecnomm in which the outputs of some become inputs for others.

(Note that this book has a decidedly conservative slant, so Keynesianism is presented in a less than ideal light.)