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1) How did
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2) When was
his most famous work written?
3) What did
he demonstrate in it?
John Maynard Keynes.
John Keynes stands with Adam Smith and Karl Marx as
one of the world’s most influential economists. The son of a noted British
economist, Keynes amassed a fortune through speculation in stocks and
commodities. He served the British government as a financial adviser and
treasury official through most of his adult life and was a key participant in
the negotiations following World Wars I and II.
But the 1930s was the period of Great Depression.
Despite the assurances of the classical economists, the fact was that
unemployment and business failure had reached record proportions in the United
States and the rest of the industrialized world. It was at this time (1936)
that Keynes’ “General Theory of Employment, Interest and Money” was published.
“The General Theory” transformed economic thinking in the 20th century, much the
way that “The Wealth of Nations” had in the 18th.
Keynes demonstrated that it was possible for total
supply and demand to be at equilibrium under full employment. What is more,
Keynes demonstrated that unemployment could persist indefinitely, unless someone
stepped in to increase total demand. The “someone” Keynes had in mind was
government. The suggestion that government could promote economic stabilization
was regarded as revolutionary at that time.