Keynes and Long-Term Economic Stagnation

Keynes

In his book The General Theory of Employment, Interest, and Money, written in 1936, economist John Maynard Keynes (1883-1946) stated:

[T]he actual phenomena of the economic system are coloured by certain special characteristics of the propensity to consume, the schedule of the marginal efficiency of capital and the rate of interests, about which we can safely generalise from experience, but which are not logically necessary.

In particular, it is an outstanding characteristic of the economic system in which we live that, whilst it is subject to severe fluctuations in respect of output and employment, it is not violently unstable.  Indeed it seems capable of remaining in a chronic condition of sub-normal activity for a considerable period without any marked tendency either towards recovery or complete collapse.  Moreover, the evidence indicates that full, or even approximately full, employment is of rare and short-lived occurrence.  Fluctuations may start briskly but seem to wear themselves out before they have proceeded to great extremes, and an intermediate situation which is neither desperate nor satisfactory is our normal lot…The same thing is true of prices, which, in response to an initiating cause of disturbance, seem to be able to find a level at which they can remain, for the time being, moderately stable. (Keynes, 249-250)

Sources

Keynes, John Maynard.  The General Theory of Employment, Interest, and Money.  Houghton Mifflin Harcourt, 1964.

Quoted from John Bellamy Foster and Robert W. McChesney, “Monopoly-Finnance Capital and the Paradox of Accumulaiton,” Monthly Review 61, no. 5 (Oct. 2009): 1-20.  http://search.ebscohost.com.ezproxy.sfpl.org/login.aspx?direct=true&db=f5h&AN=44371140&site=ehost-live (accessed November 2, 2009)

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s




Archives

My Tweet Ramblings

  • RT @jfagone: Good news: San Francisco just announced they’re ramping up testing for the city’s healthcare workers and will open drive-thru… 2 days ago
  • RT @RadReflections: On this day in 1871, the Paris Commune first opened for official business. A brief blossoming of proletarian state pow… 1 week ago
  • Under capitalism, if your poor, you don't get access to water. "Almost 90 cities and states across the US have sus… twitter.com/i/web/status/1… 2 weeks ago
  • RT @prwc_info: This is Macario Sakay. He fought alongside Andres Bonifacio against Spanish colonization and led the Philippine-American w… 4 weeks ago

My Internet Ramblings


%d bloggers like this: