Originally published on July 11, 2011
It's my understanding that the jury is still out on the validity and effectiveness of Keynesian economic principles. Now, I have been reading this book called, Stabilizing an Unstable Economy by Hyman P. Minsky and the following excerpt (below) really caught my attention. I read it over a couple of times and kept drawing parallels to our present day world.
…Economic policy must reflect an ideological vision; it must be inspired by the ideals of a good society. And it is evident that we are faced with failure of vision, with a crisis in the aims and objectives that economic policy should serve. In 1926, Keynes defined the political problem as a need to combine three things:
“economic efficiency, social justice and individual liberty. The first needs criticism, precaution, an technical knowledge; the second, an unselfish and enthusiastic spirit that loves the ordinary man, the third, tolerance, breadth, appreciation of the excellencies of variety and independence, which prefers, above everything, to give unhindered opportunity to the exceptional and to the aspiring”
….We need to bring the institutions that foster this triad of efficiency, justice and liberty up to date.
China has leveraged the Keynesian principles in order to get 400 million people out of poverty and into middle class. Tremendous achievement.
Click on the image below, in order to see the full excerpt of this text.