There are tow kind of attitude with which economists treat the economics of Keynes; one treats it with whole-hearted support and the other treats it with entire opposition. This tradition seems to me to be unfortunate because they could not understand...
There are tow kind of attitude with which economists treat the economics of Keynes; one treats it with whole-hearted support and the other treats it with entire opposition. This tradition seems to me to be unfortunate because they could not understand that the influence of historical circumstances in leading Keynes to his new view was much important than the influence of other economists. His ultimate purpose of policy was to assure a high level of employment in times of depression when he lived, and his ideas were always oriented toward positive policy and his policy are operationally significant and have been translated into action by statesmen.
The immediate proposals suggested by Keynes far promoting a high level of employment are the following: (1) Progressive taxation to raise the community propensity to consume : (2) Public investment and public control of private investment to compensate for and to reduce the magnitude of fluctuation in the marginal efficiency of private investment: (3) Strong monetary authority to control the supply of money and lower the rate of interest. Even if the se immediate proposals were put into effect and worked successfully, they would prove made quate in the long run. Therefore, he praises the principle behind the stamped-money plan of Silvio resell, he suggested that money, like ocher commodities should be made to incur carrying costs in order to discourage storing wealth in the form of money.
It is true that the above-mentioned policies of Keynes will serve to solve the problem of unemployment, but once we attain the high level employment, we must treat the problem of the injustice of unfair employment and the problem of resource allocation. These problems were not treated by Keynes because the problem of unemployment was the most urgent one for him to solve. This is the reason why Keynes is called an economist in times of depression.