"He was declaring that the trouble with the engine was not fundamental, that it was amenable to a technical fix. At a time when many of the world's intellectuals were convinced that capitalism was a failed system, that only by moving to a centrally planned economy could the West emerge from the Great Depression, Keynes was saying that capitalism was not doomed, that a very limited sort of intervention — intervention that would leave private property and private decision making intact — was all that was needed to make the system work. Confounding the skeptics, capitalism did survive; but although today's free-market enthusiasts may find this proposition hard to accept, that survival was basically on the terms Keynes suggested. World War II provided the jump start Keynes had been urging for years; but what restored faith in free markets was not just the recovery from the Depression but the assurance that macroeconomic intervention — cutting interest rates or increasing budget deficits to fight recessions — could keep a free-market economy more or less stable at more or less full employment. In effect, capitalism and its economists made a deal with the public: it will be okay to have free markets from now on, because we know enough to prevent any more Great Depressions."
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Historians from EnglandPhilosophers from EnglandUniversity of Cambridge facultyEconomists from EnglandSociologists from England
Original Language: English
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Sources
Paul Krugman, in The Return of Depression Economics and the Crisis of 2008 (2009), Ch. 5 : Policy Perversity
https://en.wikiquote.org/wiki/John_Maynard_Keynes
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John Maynard Keynes
1883 – 1946
Britischer Nationalökonom
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