Lecture Notes-12.5.06

Lecture Notes-12.5.06 - Dec 14 5-8 PM 100 GPB-final...

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Dec. 14 5-8 PM 100 GPB—final Keynes—probably the most influential economist in the 1900s, after Milton Friendman Bridge between classical economists and contemporary theories. “The general theory of employment, theory, and money” Three questions: 1. Called the savior of capitalism—how revolutionary was he in comparison to smith, matlhus, mill, and Ricardo. 2. How general is his theory? He said it was general and the classical theory was a special theory that only applied to a certain theory in a particular time frame. 3. Did he really save capitalism? Were his policies implemented? Keynes—first world war, great depression, rise of fascism. In 1933, capitalism was sick…democracy was sick…Europe and America were in midst of worst depression. Next to war, unemployment causes most problems. 1933-gold standard, soup kitchens, international financial flows decreased by 90% since stock market crash. Tarriffs are being erected…economic nationalism becomes really popular. Hitler has risen to power…fascism has been in power in italy for a decade… eastern Europe—more dictatorships. New Deal being put into place in the USA. Paradox—massive unemployment, underproduction, excess capacity…there was stuff to do, but they weren’t doing anything. Cylce---cant make anything because they didn thave money to spend on anything. Classical Liberal—in the longr un, market will reach full unemployment. Answers came in mode of fascism and socialism—economic planning. USSR has forced industrialization while the rest of the world is a depression. 1930s—battleground between capitalism, liberalism, fascism, and communism. Int eh early 1920s and 30s. .people were prospering and investing. Banking was becoming more widespread for people to use. A period of economic instability after WW1—made economy really risky. .Hyperinflation, reparations. Flow of international debt had changed—america had become lender. Stock market crash now led to world wide crash. Keynes— a product of Victorian England…grew up in a solid middle class bourgeoise class. Keynes went to eden. .went to Cambridge where he majored in math, philosophy and classics. Bloomsbury Group…gave an idea of personal morality and living an ethical life—a version of fellow feeling/virtue. Gave him a sense of rationalism—that people can do things to change policy. Keynes came to
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Lecture Notes-12.5.06 - Dec 14 5-8 PM 100 GPB-final...

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