Question

Keynes’s General Theory

1. When if ever, according to Keynes, will the theories of the classical school of economics come into their own?

2. What did Keynes consider the most important argument (before he refuted it) for tolerating inequality of wealth?

3. Keynes thought it was better for someone to tyrannize over ____ rather than over his fellow man.

4. Why, according to Keynes, did insufficient demand lead to wars in the nineteenth and first part of the twentieth centuries?

5. Keynes looked forward to the euthanasia of the _____. How would this be brought about?

Answer 1

1.  In the late 18th and early-to-middle 19th century the theories of the classical school of economics come into their own.

2.The most important argument is to to move carefully. This particularly affects attitude towards death duties as for for there are certain justifications for inequality of incomes which do not apply equally to inequality of inheritances.there is social and psychological justification for significant inequalities of incomes and wealth, but not for such large disparities as exist to-day. There are valuable human activities which require the motive of money-making and the environment of private wealth-ownership for their full fruition. Moreover, dangerous human proclivities can be canalised into comparatively harmless channels by the existence of opportunities for money-making and private wealth,

3. According to keynes "It was better for someone to tyrannize over his Bank balance rather than over his fellow man.

4. The British government was highly critical at that time according to Keynes .As the British government cut welfare spending, increases the taxes and duties According to Keynes this would not encourage people to spend their money, thereby leaving the economy unstable and unable to recover and return to a successive state. Instead of it Keynes proposed that the government spend more money, which results increase in consumer demand in the economy. This leads to an increase in overall economic activity, the natural result of which would be deflation and a reduction in unemployment.

5. Keynes looked forward to the euthanasia of the rentier or the euthanasia of the cumulative oppressive power of the capitalist to exploit the scarcity-value of capital. The owner of capital can obtain interest because capital is scarce, just as the owner of land can obtain rent because land is scarce. there may be reasons for the scarcity of land, there are no reasons for the scarcity of capital. A reason for such scarcity, in the sense of a genuine sacrifice which could only be called forth by the offer of a reward in the shape of interest, would not exist, in the long run, except in the event of the individual propensity to consume proving to be of such a character that net saving in conditions of full employment comes to an end before capital has become sufficiently abundant. But even so, it will still be possible for communal saving through the agency of the State to be maintained at a level which will allow the growth of capital up to the point where it ceases to be scarce.