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Keynes: "Capitalism's Savior"

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Kitty Hawk

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Yes, according to the April 12th issue of Business Week magazine, John Maynard Keynes was the savior of capitalism. In a continuing series of articles called The Great Innovators, this week's article is on Keynes.

The author of the article, Christopher Farrell, heaped praise on Keynes for persuading a generation of thinkers and leaders "to abandon a near-theological belief in balanced budgets. He showed that government could get trapped in recession or depression--and argued that government could break the spiral by borrowing to finance public spending that stimulated consumer activity and restored business confidence."

Then he adds this brazen assertion: "Keynes is the philosopher-king of the modern mixed economy. It's a sign of his influence that there are no true believers in laissez-faire left. We are all Keynesians now." [Emphasis added.]

How can such an absurdity be written? No one, not even this Farrell character, can be so ignorant as to actually believe there are no advocates of laissez-faire left in the world. In fact there are multitudes of us. Is it some sort of Orwellian doublespeak attempt to make people believe what is patently false?

Pathetic, especially in a business magazine.

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Worst yet, is that most people never even heard of Laissiez Faire and they call Capitalism the system we have now not even knowing they are one in the same.

On top of this there is no one out there in the media except for a few such as John Stossel that have ideas remotely similar to Laissiez Faire.

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Those who read The Economist will be aware that it is just as bad as Business Week.

"But market forces could not have been left to deal with Microsoft on their own. Markets thrive on information, and the trial provided plenty about Microsoft's misdeeds. By shining a spotlight on Microsoft's practices, the courtroom proceedings emboldened its competitors in its main market, alerted potential rivals in other markets, and forced the software company to restrain its normal behaviour towards customers and competitors alike."- Giving the invisible hand a helping hand, The Economist, Nov 7th 2002

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Then he adds this brazen assertion: "Keynes is the philosopher-king of the modern mixed economy. It's a sign of his influence that there are no true believers in laissez-faire left.  We are all Keynesians now." [Emphasis added.]

Funny, as little as 30 years ago, explicit support for socialism was a given among economists, whereas today it is marginalized, at best. If anything, it is socialism that lacks true believers these days. (Of course, that only goes for its explicit supporters among American economists – the acceptance of Marxists principles has been and is nearly universal in academia.)

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Most of the un/educated think that a "mixed" economy is the only way to go. They can't say "why" they just know that all socialism is bad and all capitalsim is just as bad. Thats what our public school systems teach though so what do you expect.

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In fact no one practices Keynesian economics completely.

Few governments raise taxes as the economies begin to grow. For Keynes, this is the way to keep the economy from topping out at too high a point, and allows the government to get their money back to refinance the deficits that the government will run to keep the economy from getting too deeply into a recession.

What does "laissez-faire" mean in the context of the fact that the government controls the money supply? When the government influences the economy through its enormous powers to tax and spend?

Monetary and fiscal policy are political decisions. What would an objectively run economy be for the posters here and how would it be judged morally and rationally?

Roy

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Roy, please stop using and therefore polluting the word objective and all of its variants.

The only moral economic system is the one that is not run, and the only moral political system is the one that does not oppress; the two statements are facets of the same judgment and of the same fact.

Laissez-faire means that government ought not to control the money supply, ought not to tax, and ought not to spend except on justice, police, and defense.

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I use objective in its original sense- being beyond mere perspective- objective as in some verifiable law, such as Euclidian, Newtonian, or otherwise.

Stop being a den mother. And this is the second time you have chosen to make a personal response rather than actually arguing your point.

In any case, make your case that governments elected by people have no right or obligation to take care of the economic system.

The Romans invented the concept of res pubblica, and the government has the right and obligation to take care of the infrastructure of the community.

Money's value is an agreement and comes out of the community as surely as a highway, a canal, or an army for the national defense.

Further why have rules against slavery for example if every value is purely economic?

Roy

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You were misusing - and polluting the meaning of - the term objective in this case and in the other. I will make explicit how only at my leisure; there are worse mistakes that you're making.

Please realize that the only valid objection to my not arguing my point (if indeed that was what I was doing...) belongs to the owner of the website (the waste of space), and you're not the owner.

Instead of demanding of me that I spit back to you the Objectivist position on the entire field of politics, research it on your own.

The Romans killed Cicero.

Money's value is fiat - an agreement made at the point of a gun. The value of gold is neither fiat nor decided by agreement.

Slavery is immoral, and every value is purely moral with implications in economics.

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Money's value is an agreement and comes out of the community as surely as a highway, a canal, or an army for the national defense.
Value (or anything) does not come from any sort of agreement... value is a personal judgment.

In fact, none of the things you mentioned must come from the government (although the army should).

The Romans invented the concept of res pubblica, and the government has the right and obligation to take care of the infrastructure of the community.

Is this supposed to be an argument? You seem to be suggesting that because the Romans invented it, it is right. In any case, this suggestion is an outright rejection of Objectivism; If you want to prove it, you are going to have to argue it in the "ethics" section (and then in epistemology and metaphysics).

Further why have rules against slavery for example if every value is purely economic?

Who said this? Surely not any Objectivist. All values are purely ethical... an economy is merely the system by which they are traded (or, rather, the lumping together of all systems, in a given region or sector, by which they are traded).

You seem to be arguing against an idea which you have little to no understanding of... I suggest a read of Capitalism: The Unknown Ideal as well as The Virtue of Selfishness.

You seem respectful, however, and, as such, I am willing to answer any questions you may have in reading those books (and any other Objectivist literature).

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