In many respects, John Maynard Keynes was a revolutionary thinker of his time. His economic thinking received acceptance by many thinkers of that time. The dominant discourse at that time was the dominance of capitalism and the existence of a free market, strongly supported my Milton Freedom. Yet, in that particular discourse, the economic freedom was primarily limited, as the market was to be a dictator of any further economic actions. Unlike Milton Freedman who took a strongly supportive position of the unregulated capitalism, John Meynard Keynes with his personal vision of the concept of freedom was quite revolutionary in economic thinking and saw the potential threats of such economic perception and foresaw the necessity of the state intervention into the financial affairs. Such an intervention comprised the essential freedom, that is known as the freedom of Keynes. (Keynes, 1975)
The position taken my Keynes is quite moderate. Such an interventionist perception and the necessity to intervene in economic affairs illustrates that Keynes was well-informed about the potential threats of communism. (Keynes, 1936) The necessity of such economic freedom was reflected at a macro level and a micro level. At a macro level, the government would be expected to be responsible for the aggregate demand, while at the micro level markets can function and satisfy the individual needs.
In the World’s Economic Outlook, he claimed that there were many threats facing the economic world, and the potential collapse of the financial markets was one of them. Being governed by the idea that what consequences such collapse may cause, John Keynes saw the shortcoming effects from the lack of awareness of what such implications may lead to. For instance, he particularly emphasized that the growing role of the financial markets may not go exactly in hand with the political context and the political developments, and that is why the correlation between these two factors may lead to the diminishing role of the economic freedom. These shortsighted effects were critical to the economist and his perception of economic freedom. The potential effects of such effects may result in the loss of economic resilience and capacity of the further rebound. Thus, the lack of awareness of these factors could lead to many other implications what were not necessarily envisaged by the proponents of the pure capitalist modus operandi in the economic systems.
Beyond that, the economic freedom did not solely depend on the correlation between the political and financial market. John Keynes looks closely into details and presents the examples of how interventionist policies operate in the economies of the Great Britain and the US. To Keynes, it was clear that most of the leading economies of that time were linked to their currencies and financial markets regulated my money rather than my gold. And that growing correlation and dependence were the key result of his policies. One of the specific threats to the limited economic freedom was the potential that with the lack of governmental regulation, the Great Britain may become the cheapest economic producer in the world, and the rules of pure competition would prevail the economic and political interests of the country. (Keynes, 1980)
Besides that, the true economic freedom could be achieved only when the country would manage to tackle their domestic financial problems, and the level of expenditures and production would be balanced. That is when the government could step in and ensure the existing economic balance.
Overall, the innovative ideas presented by Keynes strongly influenced the economic perception of capitalism and economic freedom. The fact that he was able to see the challenges of the competition contributed to the currently existing economic systems.
- Keynes, John Maynard. The General Theory Of Employment, Interest And Money. 1st ed.
New York: Harcourt, Brace, 1936. Print.
- Keynes, Milo. Essays On John Maynard Keynes. 1st ed. London:
Cambridge University Press, 1975. Print.
- Keynes, John Maynard and Donald Moggridge.
The Collected Writings Of John Maynard Keynes. 1st ed. Cambridge: MacMillan, 1980. Print.