After his death in 1946, John Maynard Keynes left a legacy that changed the world and our understanding of the nature of rebalancing the global economy.
More than anyone, Keynes paved the way for activist government. He said we could and should make the world economy work better. The generation that rebuilt the global economy after the war really were children of Keynes.
At the time of the Great Depression, in the so-called New Deal, the Hoover Dam was the largest construction project on the planet. Hoover City was just one of the results.
Hoover Dam might have helped the local area, but it’s actually a myth that the New Deal ended the Great Depression. It took a world war and all the extra government spending that went with that, finally, to bring the economy out of the doldrums.
John Maynard Keynes adopted the term herd psychology to explain the irrational behaviour of investors and banks in the boom leading to the ineevitable bust.
Keynes suggested the government should hire people to demolish South London and then rebuild it. He wasn’t serious, but he was making a serious point. If the government borrowed to create jobs, people would spend more, confidence would rise, and the economy would recover. If you picked the right moment, he insisted the extra spending would pay for itself by producing higher tax revenues.
As a young man John Maynard Keynes was a member of the bohemian Bloomsbury Set. A group that would significantly change Keynes’ outlook.
Will Hutton “Keynes foresaw that the reparations were too onerous, would have to be adjusted and that actually you are laying the seeds of the next European conflagration. He thought it was unbelievably short-sighted. He was right.”
Stephanie Flanders considers how spending money the country doesn’t have will boost a flagging economy. Just one of the fiscal ideas of John Maynard Keynes.
John Maynard Keynes spent years in this house in London, developing ideas that helped shape some of the most important events in the past century, helping to save capitalism from the Great Depression, funding the war against the Nazis, and building a new post-war economic order that helped pave the way for decades of growth and rising prosperity.
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