people getting super salty in the comment section I think we need to remember that this video is not attempting to say Keynes was completely right, but simply explaining the ideas in an easy to digest way. no economist worth his salt should insist one economic idea will always work. that said, the very field of macroeconomics basically started from Keynes, and to ignore his contributions would be willfully ignorant.
*@Faust* the fact that you think Keynes basically started macroeconomics is exactly why videos like this are so sad. If you repeat a lie often enough people start to believe it.
Faust *"no economist worth his salt would insist one economic idea will always work"* what are you really saying here? It sounds like you're saying economics isn't science and therefore we can't talk about what's really true. Am I mistaken? If one practices "economics" detached from sound epistemology then I agree it's not really science and differentiating true from false can't be done rigorously and no doubt you'd find it difficult to apply economic ideas successfully. It's not clear at all this applies to economics generally so much as the subset of economics that isn't grounded in sound theory.
+BobWildlefish What is a sound epistemological ground for economics? For all purposes, the field works more like an advanced form of accounting rather than like an actual science. I mean, everybody acknowledges that measures such as the GDP and other aggregates are epistemological fallacies, but only heterodox thinkers from fringe left/right groups ever try to deal with this problem. I think Keynes's greatest merit is that he never needed a coup-d'état to "prove" his theory. In science, you can't use political violence to force atoms to behave as your hypothesis expects. In economics, you can.
It is a science it's just hard to predict, I'm pretty sure he meant that you can't utilise any economic theory with every economic case and expect it to work
It is October. As I type this, it is a fact. In a couple of weeks it won't be. Pluto is a planet. That was a fact pre-2006, then it wasn't. The truth and therefore facts change constantly.
If I make a mistake at my job, I lose my job. If a economist make a mistake, he destroy a nation and you can't even blame on him. Great Britain was made by Adam Smith, and destroyed by this economist.
That'd no solution. How can you factualize fiction? Turn lead into gold? Never mind. I'll try to figure it out on my own. Gonna get me a magic set from K-Mart and see what happens.
I create facts on unheard and alternate logic-based As information that contradicts original hypotheses means the altercation of the entirety of hypotheses, as well as inherently stating as we suspected there is perhaps no set way to prosperity and that there are multiple perhaps some which will bring more satisfaction.
I didn't even take economics except for one class in graduate school. I should have also taken undergraduate economics, I think now. I like this. It won't function with without honourable intentions and the rule of law, though.
Calling all econ boffins. Who can put me straight? Modern Monetary Theory as espoused by Randall Wray, Warren Mosler, William Mitchell, Stephanie Kelton: What are the flaws in Modern Monetary Theory?
"Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back" -John Maynard Keynes
The full quote is even better : "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air,are distilling their frenzy from some academic scribbler of a few years back."
When I began college in 1957 I was taking a course in Economics 101...and I subscribed then and I subscribe now; to the John Maynard Keynes macro economics theory....it still rings true today!
@@userytx it made it happen which is different. IT create big bubble by priting and stimulating the economy which was not real economic progress but just growth in some sectors due to excesive debt. When that broke up people said "o its due to lord keynes oo yeahhhh". For you to know even keynes when he grew older starting doubting his theory he said that as he grew older he tended to belive more firmely in the invisible hand. That his students had taken the model to far but yet post-keynesian economists ignore the master and just use the theory.
@@cidagus1518 It produced a great amount of inflation which is one of the tool of Keynes! Very destructive in the long run and extremely socialistic in nature!
The issue with Kaynes ideas, and why they cannot be implemented, especially in a world today was mentioned in the very beginning of the video: Corruption; or as it is more commonly refered to today: Lobbyism. Keynes has this idea that the state is some sort of omniscient beign, not simply an institution run by a lot of individuals. He argues that the state will do what is best for the nation, and that makes sense, if you percieve the state as an almighty and benevolent organ. But it is not. The state is run by people, who are just as prone to corruption as anybody, that has grown up in a capitalist society, where self-interest and profits are centerpage. Think about it: Would you decline an enormous sum of money, offered in trade for simply implementing some policies that a certain company or industry was asking of you? In the recent years, lobbyism has only increased, and we will never see the return of Keynesianism as a dominating economic model, or the wellfare state. Yes, modern economists might propose Keynesianistic ideas these days, but the bankers and CEOs of the multinational corporations care little for the effect their profiteering ventures leaves on the different nations.
It is not the "issue with Keynes" it is the issue with society itself. Corruption is present also alongside corporations run by individuals. Some ppl against Keynes ideas would say: leave it in the capable and invisible hands that govern the market.. ok right.. nothing different to any bullsh*t coming from religion. An election can potentially change who runs office, but no democracy can change the board of a bank that oversold and repackaged mortgages while making taxpayers hand the aid for the fatcats bailouts.
Keynes didn't believe government spending in recessions paid for themselves, neither do modern economists. He, like modern economists still do, believe governments should run surpluses during normal times to make up for the debt incurred during recessionary periods. Also, Keynes didn't give a shit about the levels of regulation or size of the state in general. In fact, he was quite conservative. He wanted to smooth the business cycle, that is all. The whole last 2-3 minutes of this video is pretty bad. Keynes idea's weren't "discredited". They were simply updated/changed, as any incomplete scientific theory is.
There are over 20,000 economists in the US. Almost zero of them are marxist, like a couple dozen. I wonder why? Because marxism is dead and irrelevant and the only people who still believe in it are economic illiterates.
The fact that governments don't run surpluses is a failure of the government. It is not a failure of Keynes idea that you SHOULD run surpluses then to smooth the business cycle. The government not doing what the theory suggests isn't a failure of the theory it is a failure of the government.
Could you do one on Noam Chomsky? Maybe not even on his politics but on his contribution to cognitive science and the philosophical implications of Universal Grammar. Thanks.
@@derplol1612 absolutely, I really hope they find a political system that works for them in the near future so they can benefit from all their crude ressources without US sanctions
As much as I like these videos, I love the comments section more!!. Many have commented that economics is not an exact science like science/engineering. I'm an engineer myself with R&D experience. I say even science/engineering is not so exact. Most of our models don't fit the experimental data which we overcome by 'calibration' that requires feedback from experiments. There are many problems that are inherently unstable and chaotic. It is impossible to develop an accurate model for them. Fluid dynamics is one such example. Any predictive model needs correction inputs from the system. There is no model that is absolutely predictive simply because you don't know all the actors and their behavior a priori or even posterior. So is economics especially when it involves as fickle as human actors involved in it. As Albert Einstein once famously said, "All models are wrong; Some are useful". When the greatest scientist waves his hand at modeling, it deserves some credit.
Indeed.To paraphrase Comte "The only science is of humans".All our thoughts and perspectives of the world are subjective,but some like science and philosophy understand that and modify themselves to the subjective world,while dogmatism shapes the world to it's narrow pigeonhole
I've seen a few Engineer/Science folk try and make similar statements about the inherent uncertainty of the models/theory used. The difference with Engineering/Science: it actually works, even when we don't fully understand. The problem with Mainstream Economics in particular? : It doesn't work and they never understand. The assumptions involved are for more unrealistic than those of Science/Engineering etc - Homo-economicus being the biggest example. The most obvious problem with the school of thought that should have sent it to its grave was that: not only did it not forsee the Global Financial crisis 2008, it couldn't see it because of the heavily mathenatical nonsense models and assumptions associated. Economics is a Social Science and nothing can get around that. It needs to take into consideration the other Social Sciences in order to be effective and allow different theories applicable to different times to come forward. Physics is not dependent on other Sciences - which is what Mainstreamers really mean when they say Economics is a "hard" science, they believe it to be equivalent in status to Physics which essentially overlords all Physical Science and Engineering - the very issue with Neo-classical Economics - and most schools - is they ignore other social sciences.
Wow, I love your videos! Maybe you could make some about history? I think it's very important to understand historical developments to get what is going on currently in the world.
Just a little interesting fact - the house shown at 1:25 is 46 Gordon Square in London, which is about a five minute walk from The School of Life. Even closer is 36 Tavistock Place, where Lenin once lived, which is about thirty seconds away. I'm lucky enough to work in this area, hopefully Alain will have his own blue plaque here one day.
"We all die in the long run" also means "we have to think about those who will come after us and how many Hitlers and Stalins they's face in their lives" (paraphrased). Keynes is the creator of modern economics. He was also a real scholar in the field - "when the facts change ...". Among the greats like Karl Marx and Adam Smith. Marx, btw, had profound admiration for Smith and he wrote this in "The Notebooks" (that was published only in 1932 and is where he describes the methods and sources for writing The Capital). Marx understood the facts Adam Smith had were different than the facts he had like all honest scholars should do. Socialists and neo-liberals are members of faith based cults who select only the facts that prove their faith right. 'Socialism' here is the classic definition of "ownership of means of production by the workers etc .." and not the definition that is often used by Bernie Sanders, for instance (imho, the best politician alive) meaning "a preoccupation with the dignity of all people in a society". BTW, Adam Smith is blamed for things he never said like "free markets" since he was for State intervention and regulation of the economy because he believed in "free and fair competition" - the "free" means "free from distortions like monopolies and other unfair advantages".
@@naemfield I think calling them knee-jerk policies is shortsighted. Adapting to change based on new information is perhaps one of the most commendable traits of mankind, since it permits us to thrive in situations where we would otherwise perish. It is telling that we turn to Keynesian economics when things get tough. But I suppose even an atheist will turn to god in a pinch, so maybe you weren't wrong about calling it 'faith based', just had the wrong motivations.
He is the main reason I became so enamored with Economics as a high schooler. The mere fact that he focused on the middle ground between socialism an capitalism is what made his work so appealing to me.
You want to see how Friedman was utterly wrong? Read 'Tuscans and Their Families: A Study of the Florentine Catasto of 1427' by David Herlihy. It's amazing how an almost 600 year old tax study utterly disproves Friedman.
Oh dear, Milton is the worst economist there is. He basically doesn’t give a single shit about the poor. Keynesianism provide stability while Laissez-Faire type just closes their eyes and crossed their fingers.
@@tyrush7649 I was interested in reading "Capitalism & Freedom", but I've read a lot of bad reviews about it, I've read "Wealth of Nations" and "Road to Serfdom", and I'm looking to read a third one. Do you recommend reading Friedman or Keynes?. I study Public Administration, but I love economics, in a way that I consider that's essential to my career because the State Policies related to economics tend to heavily interfere in the market decisions and also in the people's economy, because the first one "gives them job", and if the governments tend to make strictly or restrictive economics policies (taxes and regulations especially) many of them just close and go to other countries looking for some good opportunities, also considering the high tensions due to the so called "social strike" and the complete uncertainty that my country (Chile) will live during these next two years.
what the fuck are you talking about? chile pre-Friedman had a 4000 USD percápita. now is 24.000 USD percápita with the same GINI and if you see by cohort the youth are more equal and rich than ever! our HID is super high unlike the rest of latin america. check your facts before to talk. Facts are everywhere www.latercera.com/voces/chile-segun-pnud-mas-prosperos-e-iguales/ PNUD CEPAL FMI etc.
since 2000-2015 the 10 decil growth their income by 150% and the 1st decil by 30% this means that the poorest increase 500% fastest their income than the richest. Stop talking little boy.
Lol, just because the amount of money per capita has increased does not mean that ordinary people are better off, just that the rich are richer. Read this to see how disastrous Friedman was for Chile: anarchism.pageabode.com/afaq/secC11.html
Just a few extra comments to add to this succinct summary on Keynes. His "Economic Consequences of the Peace" has remarkable psychological insight into Lloyd George, Clemenceau and Wilson and predicted the inevitability of WW2 nearly 20 years before it happened. A brilliant beautifully-written Tour de Force. On the minus side, he was pretty dismissive about Social Credit with economic remedies similar to his own. I think that he was rather mean in the General Theory to Henry George et al - and sneakily diverted attention from them by going back to Mandeville's obscure and ancient Parable of the Bees as a primitive progenitor of Keynesianism. He well knew the workings of Social Credit because when working on the 1929 Liberal Party manifesto he collaborated closely with a leading Social Creditor - Eimar O'Duffy - one of the few authors whose empathy and savage wit exceeded even the great Keynes himself.
Keynes was correct that governments do have it in their power to bring about sustainable economic growth, but the mechanisms he advanced were critically flawed. A main problem with Keynes was his failure to understand that the rent of land was claiming a higher and higher proportion of the wealth produced by labor and capital goods. The escalating price of locations in major cities should have given him cause to revisit Ricardo's work in developing the law of rent, expanded beyond agricultural land into all locations, rural and urban, and land-like assets (e.g., the broadcast spectrum and even take-off and landing slots at airports. His perspectives remained neoclassical, ignoring the fact that the price mechanism does not clear the markets for land as it does for labor and capital goods (and, depending on the extent of government control, for credit).
@@donkeypuncher81 it would be nice to see why and how they think politically, there could be parts to agree with and its always good to expose yourself to different thought and theory personally i like merging beliefs of each ideal bc they are all right in some way but if they were merged you could possibly create something that is both beneficial and works with/for the people. merging beliefs is better than sticking to one simple belief honestly
Keynes gets such a bad rap, when actually is the creator of the greatest economic policy of history. Thanks to his thought, capitalistic world (both developed and developing) grew fast and kept stable for 30 years. Severe recessions reappeared when his model was scrapped in the 1970s.
@@MrL702 Unhealthy is ambiguous here. What do you call what in the era that we are in? All due to an overreach of government. Example that’s comes straight from mind would be government back loans for student loans and for homeowners. This has created an permanent inflation on products that were essentially the same decades ago. But the reality is that if you create money out thin air and give to people to spend it. It then creates instabilities in the market that always fosters lag from retailers, wholesalers. Only to create inadequate responses in order to catch up to the market.
Just because the americans wanted to bound the exchange rates to gold in Bretton Woods. That system had to collapse, what it did in the 70s. But till this day Keynesianism was incredible successful. Today we have one crisis after another and economists who think there are non. And people who pray austerity in a crisis. Thats what got us in the biggest recession in history in the late 20s. Nowadays after every crisis neoliberals expand there theory, and still don't believe in the theory who can explain every crisis.
Most of the post war years to that point was Keynes getting into debates with Monetarists like Friedman. The school of economics we use today was a merging of the two debating fields (Keynesianism and Monetarism), into the neo-classical school. We also haven't had one crisis after another, and it's frustrating that you think so. In the last 15 years we've had one crisis, the Financial Crisis, and in the last 20 that number increases to two, with the Tech Bubble being added, but even that crisis was a minor one at best. Also what go us into the Great Depression was the gold standard. Keynes himself even said so. And, as data shows, it was leaving the gold standard that got us out of the depression. This is shown here: www.nber.org/papers/w6060 here:upload.wikimedia.org/wikipedia/commons/b/b5/Graph_charting_income_per_capita_throughout_the_Great_Depression.svg and Friedman's famous book 'A Monetary History of the United States'. That's not to say Keynesian policies didn't help our economy, they just weren't the force to push us out of the depression. Basically what I'm getting at is treating him like a messiah is only going to hurt your cause, and economics in general. He's human, he made mistakes. His biggest critic, Friedman, is also human and made mistakes. It's taking what they did right which is how we got to where we are today, with global poverty exponentially lower than it was even fifty years ago.
Keynes's ideas were prophetic. Behavioural economics (scientific evidence about how human actually think) supports and complements many of his initiatives.
I don't know too much about theses school but I know that orthodox economics has been criticized a lot for its view of rationality, homo-oeconomicus, and their hypothesis in general.
Holly Richter-White I work in a behavioral economics lab at my college, but apply these principles to drugs of abuse. I would definitely agree that there's a connection and application, but it depends what you're talking about. Some great behavioral economic literature includes Hursh and Roma (2015), Hursh and Silberberg (2008), and Bickel (2014). Usually behavioral economics in a drug context involves how responses change in relation to a certain unit price of a commodity, such as an animal responding on a lever for ethanol solution in an operant chamber. However, in these contexts it depends if a commodity is delivered in a delayed fashion, the price of the commodity, the individual, type of commodity, delivers multiple drugs, have substitutes or complements available, have environmental enrichment, etc., which is really applicable to how individuals with substance use disorders may behave to obtain drugs of abuse. :) It's really quite fascinating
It's rubbish. Academic pondering and meddling with no idea what actually occurs out in the real world. Technocrats governing is the greatest social disaster we have allowed in our history. Allowing economics to work out the drug problem...FMS. Please...Keynesian economics with it's utopian BS connected.
This is just such an awesome presentation on Keynes and Keynesianism, just look at FDR and USA growth in 1930's, 1940's pre world war 2, he was a witness to the madness of the Versailles agreement post WWI
The narrator was 'economical' with his explanation of how the increased public spending was to be repaid. Keynes clearly states that the borrowing was to be repaid by increased taxation - meaning higher rates of tax and not just by increased tax revenue from the increased economic activity. The higher rate of tax was necessary to avoid the economy overheating. Money was put into the economy in a downturn and was to be taken out on an upturn so as to level consumption and prevent inflation. No government anywhere has ever applied Keynes' principles in full. Almost all western governments borrowed and spent but none of them did the politically difficult bit of increasing the tax rate on the upturn.
Keynsian thinking always made sense to me because it was driven by the idea of preventing extreme economic failures. Neoliberal thinking just seems to rely too heavily on "markets will solve everything" - a very irrational and faith, rather than evidence based, thinking.
No it isn't. Keynes did not touch monetary policy at all and didn't have much faith in monetary policy. His book focused almost entirely on fiscal policy.
Whenever I get interested in a certain topic, that topic starts to pop up in various settings such as the school of life or some online magazines I follow. It was only yesterday I asked a friend of mine what keynes brought to economics. Weird.
If only Keynes had remembered what Winston Churchill had warned about the destructive impact of monopolies and monopoly privilege. In 1909, campaigning for a seat in the House of Commons Churchill told the British people that monopoly was the inherited enemy of democracy and of justice. He added that the monopoly of land is "the mother of all monopolies." Churchill's solution echoed the teachings of the Scot political economist Patrick Edward Dove. Government should impose an annual tax on those who control land equal to the potential annual rental value of whatever land is held. Keynes somehow managed to ignored the growing redistribution of wealth associated with the concentrated control over land (broadly defined). Land blessed with natural resources to exploit was climbing in value. The same pattern was occurring in the cities where commerce occurred and population was increasing.
As always, a bunch of people in the comments that don't know what the hell they're talking about. Much like religion, everyone has an opinion on economics.
bruno almeida he's both. It's also surprising that many libertarians I have met hated Keynesian economics because it required to much math rather than according to them logic.
I think the original function of Keynesian policy was to put money into projects that had long term impact, not just short term benefits like building bridges. The policy only fails when the money is not spent wisely. Basically the government fails when it uses govt funds to line its own pockets and those of their friends.
These school of life videos are a revelation! Philosophy has always been beyond my ken but I see now that philosophers and theorists are as human as I am, only with slightly bigger brains perhaps.
no matter how much you austrian schoolers may hate him keynes will never die because you try getting political office in a recession then saying "we can't do anything believe in the free market" to a freshly unemployed person
No they did not. The basic idea is simple: government spending can increase short run aggregate demand. This is essentially an objective fact, proven again and again with data and research. But the more modern question is more so about the long-run effects and whatnot.
Keynesianism has its limitations, and is not the ultimate solution for all problems. That being said, politicians rarely follow theorical economics anyway. The change we saw during the 70s was politically fueled, and many of the solutions proposed were shown to be a failure, like monetarism. Economics is a complex matter, and it's very naive, or even worse, politically charged, to blame keynesianism alone as economic school for what happened back then. We've been watching for decades how inequality and growth has been worsening, and there's no current intenrion to change neoliberal policies. Why? Personal insterests.
HeresyTalk if I am not mistaken Samuel Samuelson solved the issue of stagflation that plagued Keynes. that being said Keynes is still pretty susceptible to supply shock, though that specific supply shock was manufactured for political means.
I almost commented that the same thing must be said about Adam Smith then I remembered he did live to see his theory not worked as plan, during the end of Adam Smith's life he had some regrets of his economic policies in fact one of the major schools of economic thought is called neoclassical and there is another school of Economics Called new Keynesian no one can be 100% right you always have to listen to the other side. That being said my biggest problem with his economic idea of stimulant packets is once the government stops stimulating the economy it isn't uncommon for the economy to go back into a recession.
+blownspeakersss hahahahah yeah, screw your children who cares?! Of course it works in the short run. Just like getting drunk works every time in the short run. Hangovers, alcohol poisoning, or liver failure... who cares? Getting drunk feels great every time!
It's so great you took the high road and stayed positive with both the Keynes and Smith videos. Very well done. Also you might wanna do an update after the stimulus of the Corvid bailout, haha.
Interesting choice of the verb 'discovered' in the description when referencing his ideas- it is a whole other philosophical argument whether ideas and mathematical laws are discovered or invented.
“The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.” ― Friedrich A. Hayek
"You admit here and there that it is a question of knowing where to draw the line. You agree that the line has to be drawn somewhere [between free-enterprise and planning], and that the logical extreme is not possible. But you give us no guidance whatever as to where to draw it. In a sense this is shirking the practical issue. It is true that you and I would probably draw it in different places. I should guess that according to my ideas you greatly underestimate the practicability of the middle course. But as soon as you admit that the extreme is not possible, and that a line has to be drawn, you are, on your own argument, done for since you are trying to persuade us that as soon as one moves an inch in the planned direction you are necessarily launched on the slippery path which will lead you in due course over the precipice." J. M. Keynes to Hayek, 1944.
I think you left out the part where he recommends that, in good economic times or upswings of growth, that governments should decrease spending, and allow the markets to do their thing, maintain or increase taxes and pay down its deficits...woeful and/ or willful obfuscation?
And this is where Hayek was right. The people making these decisions will always become corrupt at some point as we see with most politicians today. It's extremely wishful thinking, the boom and bust cycle lives on!
I don't find Keynes economical philosophy attractive but I did enjoy the video as well as the opportunity to view economics from another's perspective. Thank you kindly
He was indeed a great thinker -unfortunately his ideas are often twisted and abused by governments and modern economists, who naturally will stick to the theories that grant them more leeway and power, creating a good dose of human suffering in the process.
Keynesian economics believes that in times of a high business cycle(economy doing really well) we should raise taxes and cut spending so that we can stimulate in a low Business cycle(bad economy). Society, politicians and this video don´t focus on the first part. People like the goverment helping them but don´t want to pay extra tax for a possible downturn. If people can´t accept higher taxes during a high business cycle they won´t receive help during bad times. I hope people will vote more for politicians who promis to raise taxes and cut spending but that won´t happen.
Joey Von Frankfurt how the hell would anyone accept higher taxes when they barely have money to pay for the current taxes? I'm speaking as someone from a high tax low spending country that goes to shit because of imf. The way I see it tax is theft and a way to make economic slaves
blackearl7891 greece lol. taxes so high, even succesful businesses don't make profit. and no spending whatsoever. and we were fine before the imf decided to make a profit from us.
jonathanplanet Greece issue has less to do with austerity measures and more with the Euro. It's one of the countries that should leave the e.u due to economic reasons. As you may have noticed I am not a fan of the Euro, as I think it puts too much emphasis on the controlling economies such as Germany, and a country should have the autonomy to control it's currency and thereby reducing or increasing their dollars and such forth.
I partly agree, but my honest opinion is that euro and austerity go together. euro was made to force countries to take loans in order to then force austerity, and finally take control over the country's resources and governing. Greece didnt need any of the loans it took, it was all made up by corrupt politicians and the imf. Just my 2 cents..
Because of him, he spawned a banking system that perpetually feeds itself through a debt/growth paradox. Now every economy has a central bank To control : money employment and interest
Brilliant economist! Would rather deal with 40 years of prosperity with one bout of stagflation (late 70's) Then 40 years of the boom bust mentality, and a recession every 10 years of Milton Friedman which we adopted in the 1980's. Europeans, and Japan went back to Keynes, U.S. did not, and went ahead with putting the corporate state above the civil state, a reversion back to the 1920's. Loved the comment "I guess everyone's is a Keynesian in a foxhole" I also loved the fact he was able to change his views when certain parts of his theory's were unworkable. Something modern economist should never be afraid to do.
Uh, you might want to check your facts. It wasn't 40 years of prosperity and their were tons of recessions inbetween. For instance the US didn't recover from the Great Depression until about 1940 (the specific date changes). There was then a recession caused by the influx of new soldiers returning to the workforce combined with all the industries trying to retool themselves to a civilian economy. 1953 and 1958 due to overenthusiastic monetary policy tightening, and then another recession in 1961 caused by more monetary policy problems. Economic downturns happen every half decade to decade no matter what. There has never been a decade when the US hasn't had a downturn except for maybe the 2010's. Also I have no idea what you're talking about people "going to Keynes". The economic policies of the US, Western Europe, and Japan, and almost identical. If anything, Ironically it was European policymakers that rejected Keynes during the Financial Crisis, pursuing austerity measures over countercyclical policies. The UK was an infamous case of this. Economists today by in large follow neo-classical economics, which is the merging of Keynesianism, Monetarism, Classic Economics, etc into one unified school.
@@wojtekthebear4958 Good points! Athough there are points you make, I have to disagree with. The entire point of the video is Keynsian philosophy "smooths out the edges, and abuses as well as the dizzying heights, and deep valleys of the wall street system" and this it does. Not that we didn't have recessions. Compared to the scope and scale from what went on before 1930, and after 1980, those you mentioned were fairly negligible. In the US for example spending remained high after the war (We were the only show in town, European and Asian factories were non existent) American soldiers were guaranteed by Congress to get there jobs back, although this did not fair well for female, and minority workers. The wealthy EU members did not abandon Keynsian philosophy on themselves, they heaved awful austerity measures on there poorer members Italy, Greece, so they can pay back there loans. Which you are right was catastrophic. There were far greater economic problems than recessions like inflation not linked to Keynes though that have occurred, for example inflation of the mid 60s due to Johnson's "guns and butter" philosophy. Unlike today though wages were attached to inflation so in comparison were also negligible.
@@sillysimion6079 The recessions weren't negligible the 1946 one was very significant, and the 1958 one was standard in terms of recessions. Also again, you can't just look at one policy and claim that not following it negates everything else. Yes, some countries pursued austerity policies during the Financial Crisis. This was done both domestically and internationally by countries by the countries. Policy-wise though, they still by and large followed standard economics.
John Maynard Keynes opposed the creation of the London Marathon. He thought we'd all die in the long run.
@Robert Binner Mattfeldt In the short run
Nice one.
Hhaaahmhhmaa...
Economics puns is what keeps me going in life.
Point of order: the London Marathon was first run in 1981, and JMK died in 1946.
ISo say the BOSTON marathon, which began in 1897, when JMK was 14.
people getting super salty in the comment section
I think we need to remember that this video is not attempting to say Keynes was completely right, but simply explaining the ideas in an easy to digest way. no economist worth his salt should insist one economic idea will always work.
that said, the very field of macroeconomics basically started from Keynes, and to ignore his contributions would be willfully ignorant.
*@Faust* the fact that you think Keynes basically started macroeconomics is exactly why videos like this are so sad. If you repeat a lie often enough people start to believe it.
Faust fishmans fuck yeah
Faust *"no economist worth his salt would insist one economic idea will always work"* what are you really saying here? It sounds like you're saying economics isn't science and therefore we can't talk about what's really true. Am I mistaken? If one practices "economics" detached from sound epistemology then I agree it's not really science and differentiating true from false can't be done rigorously and no doubt you'd find it difficult to apply economic ideas successfully. It's not clear at all this applies to economics generally so much as the subset of economics that isn't grounded in sound theory.
+BobWildlefish What is a sound epistemological ground for economics? For all purposes, the field works more like an advanced form of accounting rather than like an actual science. I mean, everybody acknowledges that measures such as the GDP and other aggregates are epistemological fallacies, but only heterodox thinkers from fringe left/right groups ever try to deal with this problem.
I think Keynes's greatest merit is that he never needed a coup-d'état to "prove" his theory. In science, you can't use political violence to force atoms to behave as your hypothesis expects. In economics, you can.
It is a science it's just hard to predict, I'm pretty sure he meant that you can't utilise any economic theory with every economic case and expect it to work
"When the facts change, I alter my conclusions. What do you do, sir?" 20th CENTURY BURN
avoqado89 Damn what a savage X3
It is October. As I type this, it is a fact. In a couple of weeks it won't be. Pluto is a planet. That was a fact pre-2006, then it wasn't. The truth and therefore facts change constantly.
gmackematix - "Alleged" facts. Adjectives matter
bob polo As time passes things change so the truth changes and so, by definition, facts change. Not alleged facts. Just facts.
gmackematix - Is there such a thing as objective truth?
This is a pretty good video on Keynes. Usually its hyperbiased one way or the other. I would like to see more economists.
Yes, the best video about Keynes i found on UA-cam
If I make a mistake at my job, I lose my job. If a economist make a mistake, he destroy a nation and you can't even blame on him. Great Britain was made by Adam Smith, and destroyed by this economist.
The School of Life's videos on Adam Smith, Hayek, and Karl Marx are good too.
"If the facts change, I alter my conclusions. What do you do, sir?"
I make up alternative facts.
Thanks for your insight Kellyanne
killer answer, Of course I am stealing it, LOL
That'd no solution. How can you factualize fiction? Turn lead into gold?
Never mind. I'll try to figure it out on my own. Gonna get me a magic set from K-Mart and see what happens.
@kl wies the facts are what makes me happy
I create facts on unheard and alternate logic-based As information that contradicts original hypotheses means the altercation of the entirety of hypotheses, as well as inherently stating as we suspected there is perhaps no set way to prosperity and that there are multiple perhaps some which will bring more satisfaction.
that last line was fire
We all need to be this open minded.
He didn't actually say that though: quoteinvestigator.com/2011/07/22/keynes-change-mind/
atenahena yeah... I wonder how long it took him to come up with it...
he meant 'fiyah'
@@matthew-dq8vk a guy that watches Shaun and hbomberguy is using homophobic slurs? Whew.
Not to be confused with Maynard James Keenan, singer of Tool
Lawrence Of Canadia pretty much the same guy
Bruh thanks for the heads up, I was all confused
@@ayumi5430 you're welcome. happy to assist
Thanks, that’s it! Couldn’t for the life of me remember the name of the guy that this guy isn’t
As a student of economics and a fan of progressive metal, I love em both
came on youtube to avoid my economic undergraduate studies and this comes on notif 😞
HalfBloodOtter esp. when you hated the prof :(
I didn't even take economics except for one class in graduate school. I should have also taken undergraduate economics, I think now. I like this. It won't function with without honourable intentions and the rule of law, though.
Calling all econ boffins. Who can put me straight? Modern Monetary Theory as espoused by Randall Wray, Warren Mosler, William Mitchell, Stephanie Kelton:
What are the flaws in Modern Monetary Theory?
Micro or Macro?
why do you hate your prof?
"Practical men who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back"
-John Maynard Keynes
The full quote is even better : "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of
some defunct economist. Madmen in authority, who hear voices in the air,are distilling their frenzy from some academic scribbler of a few years back."
Sick quote , don’t remember that from his biography.
what i hear " everyone is stupid but me and my economic theory" this is just inflammatory insults right
@@HardStickman ok this makes it sounds like a morew practical statement ty for the full quote.
Thats quite ironic quote, if you just put "Keynes" instead of "fefunct economist", no? :P
When I began college in 1957 I was taking a course in Economics 101...and I subscribed then and I subscribe now; to the John Maynard Keynes macro economics theory....it still rings true today!
@left-wingers-are-terrorists explain please
@left-wingers-are-terrorists A fucking joke which still ridicules the deception of what we have now as our holy frigging cow.
@left-wingers-are-terrorists yet, it took your ass out of the 2008 recession. Read a book.
@@userytx it made it happen which is different. IT create big bubble by priting and stimulating the economy which was not real economic progress but just growth in some sectors due to excesive debt. When that broke up people said "o its due to lord keynes oo yeahhhh". For you to know even keynes when he grew older starting doubting his theory he said that as he grew older he tended to belive more firmely in the invisible hand. That his students had taken the model to far but yet post-keynesian economists ignore the master and just use the theory.
@@cidagus1518 It produced a great amount of inflation which is one of the tool of Keynes! Very destructive in the long run and extremely socialistic in nature!
The issue with Kaynes ideas, and why they cannot be implemented, especially in a world today was mentioned in the very beginning of the video: Corruption; or as it is more commonly refered to today: Lobbyism.
Keynes has this idea that the state is some sort of omniscient beign, not simply an institution run by a lot of individuals. He argues that the state will do what is best for the nation, and that makes sense, if you percieve the state as an almighty and benevolent organ. But it is not. The state is run by people, who are just as prone to corruption as anybody, that has grown up in a capitalist society, where self-interest and profits are centerpage. Think about it: Would you decline an enormous sum of money, offered in trade for simply implementing some policies that a certain company or industry was asking of you?
In the recent years, lobbyism has only increased, and we will never see the return of Keynesianism as a dominating economic model, or the wellfare state. Yes, modern economists might propose Keynesianistic ideas these days, but the bankers and CEOs of the multinational corporations care little for the effect their profiteering ventures leaves on the different nations.
So hayek and self sovereign anarchy then?
this is pure corruption thé no1 cause of all troubles anywhere .
It is not the "issue with Keynes" it is the issue with society itself. Corruption is present also alongside corporations run by individuals. Some ppl against Keynes ideas would say: leave it in the capable and invisible hands that govern the market.. ok right.. nothing different to any bullsh*t coming from religion. An election can potentially change who runs office, but no democracy can change the board of a bank that oversold and repackaged mortgages while making taxpayers hand the aid for the fatcats bailouts.
@@fedelang It is the issue with Keynes, because he doesn't factor that into his theory. This should be obvious..
GIGO
Could you do one on Hannah Arendt? Her work is forever fascinating and ever more necessary.
I love it when you talk about people.
would love to see more videos like this!
theyve been doing it forever so go look through their past videos. There is a lot waiting for you there. Like, loads.
yeah! why doesn't the channel make any more videos about great minds and personalities of the world anymore? please, make more videos os these series!
I am so greatful to live in a time and place where I have free access to such intellectual knowledge. Thank you very much
"When the facts change, I alter my conclusion. What do you do, sir?" if only more people would think that way...
Keynes didn't believe government spending in recessions paid for themselves, neither do modern economists. He, like modern economists still do, believe governments should run surpluses during normal times to make up for the debt incurred during recessionary periods.
Also, Keynes didn't give a shit about the levels of regulation or size of the state in general. In fact, he was quite conservative. He wanted to smooth the business cycle, that is all. The whole last 2-3 minutes of this video is pretty bad. Keynes idea's weren't "discredited". They were simply updated/changed, as any incomplete scientific theory is.
Thank God, someone who isn't a complete lunatic! The only people in this comment section seem to be either ancaps or literal Marxists.
Yeah marxists like talking about economics. SURPRISE!
There are over 20,000 economists in the US. Almost zero of them are marxist, like a couple dozen. I wonder why? Because marxism is dead and irrelevant and the only people who still believe in it are economic illiterates.
So at what point, when governments fail to ever run surpluses, do we stop believing these myths?
The fact that governments don't run surpluses is a failure of the government. It is not a failure of Keynes idea that you SHOULD run surpluses then to smooth the business cycle. The government not doing what the theory suggests isn't a failure of the theory it is a failure of the government.
Could you do one on Noam Chomsky? Maybe not even on his politics but on his contribution to cognitive science and the philosophical implications of Universal Grammar. Thanks.
Daniel everett debunked Chomsky's idea of universal grammar when he was with the pirahas for 20 years and got attack by chomsky publicly for it.
@@frederick6650 such arrogance from someone who praised Chavez isn't a surprise.
@@derplol1612 I am no fan of chavez's policy, I simply recognize the coup d'état inflicted upon him and his people by the USA's CIA as disgusting
@@frederick6650 I totally agree, in against us intervention. But we cant blame all of Venezuela's failure on that fact
@@derplol1612 absolutely, I really hope they find a political system that works for them in the near future so they can benefit from all their crude ressources without US sanctions
I love the school of life.
As much as I like these videos, I love the comments section more!!. Many have commented that economics is not an exact science like science/engineering. I'm an engineer myself with R&D experience. I say even science/engineering is not so exact. Most of our models don't fit the experimental data which we overcome by 'calibration' that requires feedback from experiments. There are many problems that are inherently unstable and chaotic. It is impossible to develop an accurate model for them. Fluid dynamics is one such example. Any predictive model needs correction inputs from the system. There is no model that is absolutely predictive simply because you don't know all the actors and their behavior a priori or even posterior. So is economics especially when it involves as fickle as human actors involved in it. As Albert Einstein once famously said, "All models are wrong; Some are useful". When the greatest scientist waves his hand at modeling, it deserves some credit.
Indeed.To paraphrase Comte "The only science is of humans".All our thoughts and perspectives of the world are subjective,but some like science and philosophy understand that and modify themselves to the subjective world,while dogmatism shapes the world to it's narrow pigeonhole
Right! Only the quote is from George Box, not A.E. apparently
I've seen a few Engineer/Science folk try and make similar statements about the inherent uncertainty of the models/theory used.
The difference with Engineering/Science: it actually works, even when we don't fully understand.
The problem with Mainstream Economics in particular? : It doesn't work and they never understand. The assumptions involved are for more unrealistic than those of Science/Engineering etc - Homo-economicus being the biggest example. The most obvious problem with the school of thought that should have sent it to its grave was that: not only did it not forsee the Global Financial crisis 2008, it couldn't see it because of the heavily mathenatical nonsense models and assumptions associated.
Economics is a Social Science and nothing can get around that. It needs to take into consideration the other Social Sciences in order to be effective and allow different theories applicable to different times to come forward.
Physics is not dependent on other Sciences - which is what Mainstreamers really mean when they say Economics is a "hard" science, they believe it to be equivalent in status to Physics which essentially overlords all Physical Science and Engineering - the very issue with Neo-classical Economics - and most schools - is they ignore other social sciences.
What a wonderful explanation! So easy to understand and it all comes alive in the pictures :) Thank you for your videos!
Wow, I love your videos! Maybe you could make some about history? I think it's very important to understand historical developments to get what is going on currently in the world.
Just a little interesting fact - the house shown at 1:25 is 46 Gordon Square in London, which is about a five minute walk from The School of Life. Even closer is 36 Tavistock Place, where Lenin once lived, which is about thirty seconds away. I'm lucky enough to work in this area, hopefully Alain will have his own blue plaque here one day.
"We all die in the long run" also means "we have to think about those who will come after us and how many Hitlers and Stalins they's face in their lives" (paraphrased). Keynes is the creator of modern economics. He was also a real scholar in the field - "when the facts change ...". Among the greats like Karl Marx and Adam Smith. Marx, btw, had profound admiration for Smith and he wrote this in "The Notebooks" (that was published only in 1932 and is where he describes the methods and sources for writing The Capital). Marx understood the facts Adam Smith had were different than the facts he had like all honest scholars should do. Socialists and neo-liberals are members of faith based cults who select only the facts that prove their faith right.
'Socialism' here is the classic definition of "ownership of means of production by the workers etc .." and not the definition that is often used by Bernie Sanders, for instance (imho, the best politician alive) meaning "a preoccupation with the dignity of all people in a society". BTW, Adam Smith is blamed for things he never said like "free markets" since he was for State intervention and regulation of the economy because he believed in "free and fair competition" - the "free" means "free from distortions like monopolies and other unfair advantages".
A system that relies on the absence of corruption, shortsightedness and kneejerk policies is kind of faith-based
@@naemfield I think calling them knee-jerk policies is shortsighted. Adapting to change based on new information is perhaps one of the most commendable traits of mankind, since it permits us to thrive in situations where we would otherwise perish. It is telling that we turn to Keynesian economics when things get tough. But I suppose even an atheist will turn to god in a pinch, so maybe you weren't wrong about calling it 'faith based', just had the wrong motivations.
Have you even read one book of either marx or adam smith?
That last line brings it home so well.
8:03 I imagine this complex system of accounting is a bit more complicated than quadratic equations ;)
He is the main reason I became so enamored with Economics as a high schooler. The mere fact that he focused on the middle ground between socialism an capitalism is what made his work so appealing to me.
Could you do Friedman next ? To complete the, Marx, Keynes and Friedman economics trilogy :)
You want to see how Friedman was utterly wrong? Read 'Tuscans and Their Families: A Study of the Florentine Catasto of 1427' by David Herlihy. It's amazing how an almost 600 year old tax study utterly disproves Friedman.
Deregulate, privatize, and slash government spending. There that's Friedman.
I would say Marx, Keyness, Mises
Oh dear, Milton is the worst economist there is. He basically doesn’t give a single shit about the poor. Keynesianism provide stability while Laissez-Faire type just closes their eyes and crossed their fingers.
@@tyrush7649 I was interested in reading "Capitalism & Freedom", but I've read a lot of bad reviews about it, I've read "Wealth of Nations" and "Road to Serfdom", and I'm looking to read a third one. Do you recommend reading Friedman or Keynes?. I study Public Administration, but I love economics, in a way that I consider that's essential to my career because the State Policies related to economics tend to heavily interfere in the market decisions and also in the people's economy, because the first one "gives them job", and if the governments tend to make strictly or restrictive economics policies (taxes and regulations especially) many of them just close and go to other countries looking for some good opportunities, also considering the high tensions due to the so called "social strike" and the complete uncertainty that my country (Chile) will live during these next two years.
Do one on Milton Friedman !!!
A moron who brought povertry to every country where his ideas were tried (see Pinochet's Chile).
what the fuck are you talking about? chile pre-Friedman had a 4000 USD percápita. now is 24.000 USD percápita with the same GINI and if you see by cohort the youth are more equal and rich than ever! our HID is super high unlike the rest of latin america. check your facts before to talk.
Facts are everywhere
www.latercera.com/voces/chile-segun-pnud-mas-prosperos-e-iguales/
PNUD
CEPAL
FMI
etc.
since 2000-2015 the 10 decil growth their income by 150% and the 1st decil by 30% this means that the poorest increase 500% fastest their income than the richest. Stop talking little boy.
Lol, just because the amount of money per capita has increased does not mean that ordinary people are better off, just that the rich are richer.
Read this to see how disastrous Friedman was for Chile:
anarchism.pageabode.com/afaq/secC11.html
You source an anarchism site? lol
Just a few extra comments to add to this succinct summary on Keynes. His "Economic Consequences of the Peace" has remarkable psychological insight into Lloyd George, Clemenceau and Wilson and predicted the inevitability of WW2 nearly 20 years before it happened. A brilliant beautifully-written Tour de Force. On the minus side, he was pretty dismissive about Social Credit with economic remedies similar to his own. I think that he was rather mean in the General Theory to Henry George et al - and sneakily diverted attention from them by going back to Mandeville's obscure and ancient Parable of the Bees as a primitive progenitor of Keynesianism. He well knew the workings of Social Credit because when working on the 1929 Liberal Party manifesto he collaborated closely with a leading Social Creditor - Eimar O'Duffy - one of the few authors whose empathy and savage wit exceeded even the great Keynes himself.
Still wating for Rothbard, Menschen!
Keynes was correct that governments do have it in their power to bring about sustainable economic growth, but the mechanisms he advanced were critically flawed. A main problem with Keynes was his failure to understand that the rent of land was claiming a higher and higher proportion of the wealth produced by labor and capital goods. The escalating price of locations in major cities should have given him cause to revisit Ricardo's work in developing the law of rent, expanded beyond agricultural land into all locations, rural and urban, and land-like assets (e.g., the broadcast spectrum and even take-off and landing slots at airports. His perspectives remained neoclassical, ignoring the fact that the price mechanism does not clear the markets for land as it does for labor and capital goods (and, depending on the extent of government control, for credit).
I will have to watch this a few more times. Thanks, I feel inspired by you all the time to make a report on a variety of topics just for fun.
Education is key to success. NICE
Would love to see School Of Life cover Anarchism.
There’s not really much to cover
@William Magee it never works long term and is just generally a very stupid idea in the first place. Nobody really wants anarchy.
@William Magee keep hoping he will make the video one day bro
@@donkeypuncher81 it would be nice to see why and how they think politically, there could be parts to agree with and its always good to expose yourself to different thought and theory personally i like merging beliefs of each ideal bc they are all right in some way but if they were merged you could possibly create something that is both beneficial and works with/for the people. merging beliefs is better than sticking to one simple belief honestly
I love how this video marks the passage of time with the use of Automobiles. Such a nice touch.
Nice, have been waiting for a Keynes video.
I missed those maracas
Same.....😆
Keynes gets such a bad rap, when actually is the creator of the greatest economic policy of history. Thanks to his thought, capitalistic world (both developed and developing) grew fast and kept stable for 30 years. Severe recessions reappeared when his model was scrapped in the 1970s.
Never heard of inflation???
@@alphaohenriquez good luck experiencing inflation during a recession 👍
@@MrL702 not following
@@alphaohenriquez Reread the OP. Unhealthy amounts of inflation had not been experienced during the times of implementation of Keynesian economics.
@@MrL702 Unhealthy is ambiguous here. What do you call what in the era that we are in? All due to an overreach of government. Example that’s comes straight from mind would be government back loans for student loans and for homeowners. This has created an permanent inflation on products that were essentially the same decades ago. But the reality is that if you create money out thin air and give to people to spend it. It then creates instabilities in the market that always fosters lag from retailers, wholesalers. Only to create inadequate responses in order to catch up to the market.
You should do Nassim Nicholas Taleb. His legacy is still being written
I agree with this!
when you get attacked in the comments from both the far left and the far right you're doing something right
Nah, it's the idealogues on both sides exerting their stupidity.
that’s stupid and doesn’t make any sense
You guys dont get the joke do you?
Well change it to "you may be doing something right" for the far right and left also fight one another.
r/enlightenedcentrism
I was waiting for one on Keynes! yay! finally
A genius in my mind! Way ahead of todays economists.
A genius, sure? Ahead of today's economists? Not really, especially since some of his ideas had to be later fixed by contemporary economists.
Just because the americans wanted to bound the exchange rates to gold in Bretton Woods. That system had to collapse, what it did in the 70s. But till this day Keynesianism was incredible successful. Today we have one crisis after another and economists who think there are non. And people who pray austerity in a crisis. Thats what got us in the biggest recession in history in the late 20s. Nowadays after every crisis neoliberals expand there theory, and still don't believe in the theory who can explain every crisis.
Most of the post war years to that point was Keynes getting into debates with Monetarists like Friedman. The school of economics we use today was a merging of the two debating fields (Keynesianism and Monetarism), into the neo-classical school. We also haven't had one crisis after another, and it's frustrating that you think so. In the last 15 years we've had one crisis, the Financial Crisis, and in the last 20 that number increases to two, with the Tech Bubble being added, but even that crisis was a minor one at best.
Also what go us into the Great Depression was the gold standard. Keynes himself even said so. And, as data shows, it was leaving the gold standard that got us out of the depression. This is shown here: www.nber.org/papers/w6060 here:upload.wikimedia.org/wikipedia/commons/b/b5/Graph_charting_income_per_capita_throughout_the_Great_Depression.svg and Friedman's famous book 'A Monetary History of the United States'. That's not to say Keynesian policies didn't help our economy, they just weren't the force to push us out of the depression.
Basically what I'm getting at is treating him like a messiah is only going to hurt your cause, and economics in general. He's human, he made mistakes. His biggest critic, Friedman, is also human and made mistakes. It's taking what they did right which is how we got to where we are today, with global poverty exponentially lower than it was even fifty years ago.
how are you liking the inflationary fruits of his ideas?
was literally about to ask you a few days ago to make a video about this guy. you must have read my mind
Keynes's ideas were prophetic. Behavioural economics (scientific evidence about how human actually think) supports and complements many of his initiatives.
How? I would seriously like to see some connections between BE or BF and Keynesian economics.
I don't know too much about theses school but I know that orthodox economics has been criticized a lot for its view of rationality, homo-oeconomicus, and their hypothesis in general.
Holly Richter-White I work in a behavioral economics lab at my college, but apply these principles to drugs of abuse. I would definitely agree that there's a connection and application, but it depends what you're talking about. Some great behavioral economic literature includes Hursh and Roma (2015), Hursh and Silberberg (2008), and Bickel (2014). Usually behavioral economics in a drug context involves how responses change in relation to a certain unit price of a commodity, such as an animal responding on a lever for ethanol solution in an operant chamber. However, in these contexts it depends if a commodity is delivered in a delayed fashion, the price of the commodity, the individual, type of commodity, delivers multiple drugs, have substitutes or complements available, have environmental enrichment, etc., which is really applicable to how individuals with substance use disorders may behave to obtain drugs of abuse. :) It's really quite fascinating
holylightbulb sounds like marketing to me
It's rubbish. Academic pondering and meddling with no idea what actually occurs out in the real world. Technocrats governing is the greatest social disaster we have allowed in our history. Allowing economics to work out the drug problem...FMS. Please...Keynesian economics with it's utopian BS connected.
I think you should be awarded for your lovely voice.
"In the long run, we are all dead"
In the short run we get the results of previous long runs, ergo that is a stupid falacy
This is just such an awesome presentation on Keynes and Keynesianism, just look at FDR and USA growth in 1930's, 1940's pre world war 2, he was a witness to the madness of the Versailles agreement post WWI
A video about John Stuart Mill in the "political theory" playlist would be great
So good. Loved this video, the story, the animation, the delivery. Quite excellent!
My man Keynes!!!
Been waiting on this one for a while
The narrator was 'economical' with his explanation of how the increased public spending was to be repaid. Keynes clearly states that the borrowing was to be repaid by increased taxation - meaning higher rates of tax and not just by increased tax revenue from the increased economic activity. The higher rate of tax was necessary to avoid the economy overheating. Money was put into the economy in a downturn and was to be taken out on an upturn so as to level consumption and prevent inflation. No government anywhere has ever applied Keynes' principles in full. Almost all western governments borrowed and spent but none of them did the politically difficult bit of increasing the tax rate on the upturn.
Your videos are a godsend for capping off High School economics lessons.
Keynsian thinking always made sense to me because it was driven by the idea of preventing extreme economic failures. Neoliberal thinking just seems to rely too heavily on "markets will solve everything" - a very irrational and faith, rather than evidence based, thinking.
Thanks! Right a week before my economic studies exam!
This guy was brilliant. This is where MMT comes from
No it isn't. Keynes did not touch monetary policy at all and didn't have much faith in monetary policy. His book focused almost entirely on fiscal policy.
@@wojtekthebear4958 I am very late indeed but Mike is talking about Modern Monetary *Theory*, not monetary policy.
Hello, thank you for good content! I highly appreciate your channel
Whenever I get interested in a certain topic, that topic starts to pop up in various settings such as the school of life or some online magazines I follow. It was only yesterday I asked a friend of mine what keynes brought to economics. Weird.
In the long run we are all read
That's iconic
It's not something we can say everytime but in some situation it is important
Well explained. Thank you!
Missed this kind of videos, the ones that actually brought me to the channel 😃
Thank you for making this video! I am an Economics undergrad and Keynes is one of my heroes.
Maybe we're screwed then.
If only Keynes had remembered what Winston Churchill had warned about the destructive impact of monopolies and monopoly privilege. In 1909, campaigning for a seat in the House of Commons Churchill told the British people that monopoly was the inherited enemy of democracy and of justice. He added that the monopoly of land is "the mother of all monopolies." Churchill's solution echoed the teachings of the Scot political economist Patrick Edward Dove. Government should impose an annual tax on those who control land equal to the potential annual rental value of whatever land is held. Keynes somehow managed to ignored the growing redistribution of wealth associated with the concentrated control over land (broadly defined). Land blessed with natural resources to exploit was climbing in value. The same pattern was occurring in the cities where commerce occurred and population was increasing.
Stagflation could have had nothing to do with the OPEC oil embargo...
GREAT video!!! Well explained and easy to understand - and from what i know of Mr. Keynes's ideas, accurate!! Kudos.
As always, a bunch of people in the comments that don't know what the hell they're talking about. Much like religion, everyone has an opinion on economics.
bruno almeida he's both. It's also surprising that many libertarians I have met hated Keynesian economics because it required to much math rather than according to them logic.
lol Keynesian-ism doesn't require difficult math, it's just a bunch of stimulus and money printing.. take a basic economics course
"The only function of economic forecasting is to make astrology look respectable." - John Kenneth Galbraith
I think the original function of Keynesian policy was to put money into projects that had long term impact, not just short term benefits like building bridges. The policy only fails when the money is not spent wisely. Basically the government fails when it uses govt funds to line its own pockets and those of their friends.
khloe38 Well said!
Was waiting for so long for this video!
A video to introduce Hayek's economy will be interesting now...
I'm just going to watch the Keynes video and then the Hayek video back and forth until I solve all of the world's economic problems.
Won't happen until they make on Friedman too.
I thought I was a free market capitalist, but now sir, I believe that I am nothing other than a Keynsian in a foxhole.
Word.
banditoooranntttiitooo
to the bird
Nice vids.
Genius Fucking Christ , latter.
truth and lies are too Grey these days. the basement is a bunker
These school of life videos are a revelation! Philosophy has always been beyond my ken but I see now that philosophers and theorists are as human as I am, only with slightly bigger brains perhaps.
no matter how much you austrian schoolers may hate him keynes will never die because you try getting political office in a recession then saying "we can't do anything believe in the free market" to a freshly unemployed person
That's why neoliberals make the claims that democracy is a bad thing...
This is such an amazing video.. Gave me a whole different way of thinking economically. Thank you
I AM THE SENATE!
hahahahahaha
Comic Fever ???
Lol
Do it.
Great video! There should be a post about him in your website, i couldn't find it.
I wonder how Keynes's views would have changed had he lived another 30 years. The 70s really turned a few of his ideas upside down.
No they did not. The basic idea is simple: government spending can increase short run aggregate demand. This is essentially an objective fact, proven again and again with data and research. But the more modern question is more so about the long-run effects and whatnot.
Keynesianism has its limitations, and is not the ultimate solution for all problems. That being said, politicians rarely follow theorical economics anyway. The change we saw during the 70s was politically fueled, and many of the solutions proposed were shown to be a failure, like monetarism. Economics is a complex matter, and it's very naive, or even worse, politically charged, to blame keynesianism alone as economic school for what happened back then. We've been watching for decades how inequality and growth has been worsening, and there's no current intenrion to change neoliberal policies. Why? Personal insterests.
HeresyTalk if I am not mistaken Samuel Samuelson solved the issue of stagflation that plagued Keynes. that being said Keynes is still pretty susceptible to supply shock, though that specific supply shock was manufactured for political means.
I almost commented that the same thing must be said about Adam Smith then I remembered he did live to see his theory not worked as plan, during the end of Adam Smith's life he had some regrets of his economic policies in fact one of the major schools of economic thought is called neoclassical and there is another school of Economics Called new Keynesian no one can be 100% right you always have to listen to the other side.
That being said my biggest problem with his economic idea of stimulant packets is once the government stops stimulating the economy it isn't uncommon for the economy to go back into a recession.
+blownspeakersss hahahahah yeah, screw your children who cares?! Of course it works in the short run. Just like getting drunk works every time in the short run. Hangovers, alcohol poisoning, or liver failure... who cares? Getting drunk feels great every time!
It's so great you took the high road and stayed positive with both the Keynes and Smith videos. Very well done. Also you might wanna do an update after the stimulus of the Corvid bailout, haha.
I mean, why wouldn't they be? Both of them were mostly right and modern economics still uses many ideas which were popularized by both men.
Interesting choice of the verb 'discovered' in the description when referencing his ideas- it is a whole other philosophical argument whether ideas and mathematical laws are discovered or invented.
For Kant,Mathematics is synthetic
Great video.
I didn't know that the UK faced inflation in the 70s as well.
How often do you read and can you give a tour of your library/what you read.
Also can you talk about Neoliberalism.
Keynes said that in a depression we should pay people to dig holes and then fill them in. Richard Nixon said, "we are all Keynesians now."
I love pragmatic economists.
“The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.” ― Friedrich A. Hayek
"You admit here and there that it is a question of knowing where to draw the line. You agree that the line has to be drawn somewhere [between free-enterprise and planning], and that the logical extreme is not possible. But you give us no guidance whatever as to where to draw it. In a sense this is shirking the practical issue. It is true that you and I would probably draw it in different places. I should guess that according to my ideas you greatly underestimate the practicability of the middle course. But as soon as you admit that the extreme is not possible, and that a line has to be drawn, you are, on your own argument, done for since you are trying to persuade us that as soon as one moves an inch in the planned direction you are necessarily launched on the slippery path which will lead you in due course over the precipice." J. M. Keynes to Hayek, 1944.
I think you left out the part where he recommends that, in good economic times or upswings of growth, that governments should decrease spending, and allow the markets to do their thing, maintain or increase taxes and pay down its deficits...woeful and/ or willful obfuscation?
All politicians left and right are wankers.
And this is where Hayek was right. The people making these decisions will always become corrupt at some point as we see with most politicians today. It's extremely wishful thinking, the boom and bust cycle lives on!
@@ricksanchez243what an idiot😅😅
great work. really. outstanding!!
could you please mention the references too?
Hayek under Regan/Thatcher gave us all the greatest rebellion against the establishment we have ever seen. Early punk rock. :)
Very true my friend - it also gave us a global recession, stratospheric income inequality and a new oligarchic superclass
And the Punk Rockers are now selling butter on TV. Go figure.
I thought I was a free market capitalist, but now sir, I believe that I am nothing other than a Keynsian in a foxhole.
I don't find Keynes economical philosophy attractive but I did enjoy the video as well as the opportunity to view economics from another's perspective. Thank you kindly
He was indeed a great thinker -unfortunately his ideas are often twisted and abused by governments and modern economists, who naturally will stick to the theories that grant them more leeway and power, creating a good dose of human suffering in the process.
❤
Thanks for this video, very helpful for my economics essay!
Doing an essay on the National Minimum Wage and I'm doing a section on Keynesian Wage Theory. This was extremely helpful, thank you School of Life :D
Excellent! Well done! YES, flexibility AS WELL as stimulus is often required!
"I UNDERSTAND THE ECONOMY"
your channel is just amazing
His theory is like inflation with extra steps
I love this channel so much that i use these videos for college
Keynesian economics believes that in times of a high business cycle(economy doing really well) we should raise taxes and cut spending so that we can stimulate in a low Business cycle(bad economy). Society, politicians and this video don´t focus on the first part. People like the goverment helping them but don´t want to pay extra tax for a possible downturn. If people can´t accept higher taxes during a high business cycle they won´t receive help during bad times. I hope people will vote more for politicians who promis to raise taxes and cut spending but that won´t happen.
Joey Von Frankfurt how the hell would anyone accept higher taxes when they barely have money to pay for the current taxes? I'm speaking as someone from a high tax low spending country that goes to shit because of imf. The way I see it tax is theft and a way to make economic slaves
jonathanplanet which country follow those policy?
blackearl7891 greece lol. taxes so high, even succesful businesses don't make profit. and no spending whatsoever. and we were fine before the imf decided to make a profit from us.
jonathanplanet Greece issue has less to do with austerity measures and more with the Euro. It's one of the countries that should leave the e.u due to economic reasons. As you may have noticed I am not a fan of the Euro, as I think it puts too much emphasis on the controlling economies such as Germany, and a country should have the autonomy to control it's currency and thereby reducing or increasing their dollars and such forth.
I partly agree, but my honest opinion is that euro and austerity go together. euro was made to force countries to take loans in order to then force austerity, and finally take control over the country's resources and governing. Greece didnt need any of the loans it took, it was all made up by corrupt politicians and the imf. Just my 2 cents..
In short: governments are not households, they are companies
might I suggest a book: 'Keynes: The Return of the Master,' by Robert Skidelsky
“In the long run we’re ok. The next generation are dead” - Keynes on how the debt burden of his model is paid by a cost of living crisis in future.
Because of him, he spawned a banking system that perpetually feeds itself through a debt/growth paradox.
Now every economy has a central bank
To control : money employment and interest
Brilliant economist! Would rather deal with 40 years of prosperity with one bout of stagflation (late 70's) Then 40 years of the boom bust mentality, and a recession every 10 years of Milton Friedman which we adopted in the 1980's. Europeans, and Japan went back to Keynes, U.S. did not, and went ahead with putting the corporate state above the civil state, a reversion back to the 1920's. Loved the comment "I guess everyone's is a Keynesian in a foxhole" I also loved the fact he was able to change his views when certain parts of his theory's were unworkable. Something modern economist should never be afraid to do.
Uh, you might want to check your facts. It wasn't 40 years of prosperity and their were tons of recessions inbetween. For instance the US didn't recover from the Great Depression until about 1940 (the specific date changes). There was then a recession caused by the influx of new soldiers returning to the workforce combined with all the industries trying to retool themselves to a civilian economy. 1953 and 1958 due to overenthusiastic monetary policy tightening, and then another recession in 1961 caused by more monetary policy problems.
Economic downturns happen every half decade to decade no matter what. There has never been a decade when the US hasn't had a downturn except for maybe the 2010's.
Also I have no idea what you're talking about people "going to Keynes". The economic policies of the US, Western Europe, and Japan, and almost identical. If anything, Ironically it was European policymakers that rejected Keynes during the Financial Crisis, pursuing austerity measures over countercyclical policies. The UK was an infamous case of this. Economists today by in large follow neo-classical economics, which is the merging of Keynesianism, Monetarism, Classic Economics, etc into one unified school.
@@wojtekthebear4958 Good points! Athough there are points you make, I have to disagree with. The entire point of the video is Keynsian philosophy "smooths out the edges, and abuses as well as the dizzying heights, and deep valleys of the wall street system" and this it does. Not that we didn't have recessions. Compared to the scope and scale from what went on before 1930, and after 1980, those you mentioned were fairly negligible. In the US for example spending remained high after the war (We were the only show in town, European and Asian factories were non existent) American soldiers were guaranteed by Congress to get there jobs back, although this did not fair well for female, and minority workers. The wealthy EU members did not abandon Keynsian philosophy on themselves, they heaved awful austerity measures on there poorer members Italy, Greece, so they can pay back there loans. Which you are right was catastrophic. There were far greater economic problems than recessions like inflation not linked to Keynes though that have occurred, for example inflation of the mid 60s due to Johnson's "guns and butter" philosophy. Unlike today though wages were attached to inflation so in comparison were also negligible.
@@sillysimion6079 The recessions weren't negligible the 1946 one was very significant, and the 1958 one was standard in terms of recessions.
Also again, you can't just look at one policy and claim that not following it negates everything else. Yes, some countries pursued austerity policies during the Financial Crisis. This was done both domestically and internationally by countries by the countries. Policy-wise though, they still by and large followed standard economics.