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MOST IMPORTANT SCIENTIFIC DISCOVERIES
Keynesianism. History and essence of scientific discovery
Directory / The most important scientific discoveries In 1936, John Keynes' book "The General Theory of Employment, Interest and Money" appeared, which immediately became famous. This glory is connected, first of all, with a new look at the role of the state in the economy, formulated in the work. Prior to this, theoretical views on the development of the economy were completely based on the discoveries of the great Adam Smith. According to his teachings, the economy had an absolute capacity for self-regulation. The main role of the state was to ensure that free market development does not interfere. The crisis twenties and thirties of the twentieth century made adjustments to these theoretical constructions. During this difficult period, Keynes proposed in his fundamental work a recipe for the treatment of serious social ailments. The father of John Maynard Keynes (1883–1946) was an economics professor, which may have predetermined his life path. Already at the Eton private school, John showed outstanding mathematical abilities. In 1902 he went to study at King's College. The next place of study was the University of Cambridge, where he could listen to a course of lectures by Alfred Marshall, whom he always revered. In 1909, John came to work at King's College, Cambridge. Here, among other things, he managed to provide the college with a significant financial income. In the period from 1912 to 1945, Keynes edited the "Economic Journal", in 1915-1919 he worked in the British Treasury. Interestingly, his responsibilities also included economic contacts with Soviet Russia. Keynes visited our country in 1925, making a number of reports in Moscow. In 1929 he returned to public service. During World War II, Keynes held a high position in the Treasury. Keynes was also successful in his personal financial affairs. Playing on the stock exchange, he made two million dollars. B. Russell said about him this way: "Keynes's intellect was distinguished by such clarity and sharpness that I have never seen before ... It sometimes seemed to me that such a great sharpness of mind could not be combined with depth. But I think that these my feelings were wrong ". An obvious recognition of his scientific reputation was his appointment as one of the directors of the National Bank of England. However, Keynes entered history primarily as the head of a new scientific school. Today, many of the provisions formulated by Keynes are generally accepted. For their time, they were a revolutionary discovery in economics. At the time Keynes's book was being written, the unemployment rate in the Western world was over ten percent. Many economists, believing that unemployment was caused by insufficient consumption and low demand, have suggested using public works as a lifesaver. The money spent by the state, in addition to a direct impact on the level of employment, was supposed to serve to create other jobs related to the production of goods and services for those who already got a job. So gradually the economy will come out of stagnation. Since such proposals did not receive support from governments, Keynes conceived his book as support for this thesis. In The General Theory, Keynes showed that in a market economy there is no miraculous mechanism that automatically leads to full employment. The economy may remain in a state of depression for a long time to come. However, the state must certainly increase spending in order to increase production, employment, and pursue an active investment policy. V.N. Kostyuk notes in his book: “The great classics of the past did not distinguish between micro- and macroeconomic aspects of the economy. However, since the conditions for the prosperity of an individual company are not identical to the efficiency of the economy as a whole, the macroeconomic approach cannot but differ from the microeconomic one. Therefore, the further development of economic science required the construction two different levels of economic analysis... ...Keynes introduced into the theoretical use of economic science macroeconomic models based on the relationship of a small number of observable variables, and the general equilibrium of the economy - to the equilibrium of the commodity market, money market, bond market and labor market. The reason for the possible instability of the economy, he considered fluctuations in income caused by unexpected changes in the volume of investment. The latter, if they reach a dangerous limit, cannot be corrected only by the forces of market self-regulation and require additional (but not replacing the market) government intervention. Thus, Keynes proposed a new paradigm of economic analysis, improving not only the methods, but also the language of economic theory. Perhaps Keynes' greatest achievement was the creation of a new language of economic theory. This language deals with a small number of aggregated values that change little in a short period of time, which made it possible to reduce the entire economy to the functioning of four interconnected markets: the market for goods and services, the labor market, the money market, and the securities market. Given the achievements of the marginalists, a two-story world of micro- and macroeconomic theory emerged, in which mathematical modeling became possible not only at the micro level (Walras), but also at the macro level. The first such model appeared already in 1937. Keynes gives one of the key roles to assumption in economic behavior. “When a rise in prices is expected and economic life conforms to this, then this is quite enough to cause a rise in prices for a while, and when the expectation is justified, the rise is even more intensified. The same is observed when a fall in prices is expected. cause a significant decrease. Keynes introduces the expectation-related notion of the marginal efficiency of capital mec, the ratio of the expected income from capital property to the supply price of this property. The indicator mec decreases - with an increase in the supply of capital, and increases with new opportunities for its use, when a good economic situation is expected. The classical theory suggests that unemployment is possible if the economy deviates from a state of perfect competition. Keynes allows a different situation, for example, an equilibrium with high unemployment. This becomes possible because different levels of income now correspond to different admissible equilibria. Hence, according to Keynes, an equilibrium may arise that is different from the desired one. Rejecting the classic postulate that thrift lies at the heart of capital growth, Keynes establishes a link between income growth and the amount of investment, called the investment multiplier. The basis of this concept is the following idea: the more people spend on new investment, the greater will be the further increase in income generated by new investment. "...Keynes rejects the doctrine of laissez faire and believes that the state should influence aggregate demand if its volume is insufficient," notes V.N. Kostyuk. "He considers monetary and budgetary policies as tools for regulating the magnitude of demand. "monetary policy acts to increase demand by lowering the interest rate, thereby facilitating investment. This requires an increase in the money supply. Will this cause inflation? No, says Keynes, if the amount of demand is insufficient (and, therefore, if unemployment is high). Inflation and a high level unemployment are incompatible with each other ... ...As an effective means of increasing effective demand in the face of severe unemployment, Keynes proposed the use of public works financed by the state, which should compensate for the decline in employment in the private sector. However, it is necessary to stimulate only those regions that actually have additional resources; otherwise, stimulus will only increase inflation. During an upswing, economic policy should be the opposite of that applied during a recession. Keynes considered the policy of laissez faire (let things go as they are) true for the XNUMXth century, but not for the XNUMXth century, but he rejected the economic policy of labor unions, because he stood for economic individualism and freedom. The main goal of economic policy according to Keynes is to reduce the excess burden imposed by the volatility and uncertainty of the future. The decrease in monetary uncertainty is expressed through support for domestic price stability. Employment uncertainty is reduced through government intervention in investment and stability in the rate of interest. In overcoming the crisis, the role of monetary policy is important, but the efforts of monetary policy alone are clearly not enough. “With the present organization of markets and the influences that govern them, the market estimate of the marginal efficiency of capital may be subject to such enormous fluctuations that they cannot be adequately compensated by corresponding changes in the rate of interest ... On this basis, I conclude that the regulation of the volume It is not safe to leave current investments in private hands." Keynes considered the expansionary budgetary policy of the state to be the most important during the crisis. It should take over the direct organization of investments. However, "if we completely eliminate the ability to self-heal from our system, then we can only hope for occasional improvements in the health of the economy, but never wait for a full recovery." A sound economic policy of the state, although not able to eliminate the alternation of booms and recessions, can weaken the recession or strengthen the recovery. Speaking about the role of the state, Keynes, however, was a resolute opponent of state ownership. “It is not the ownership of the instruments of production that is essential for the state. If the state could determine the total amount of resources intended for increasing the instruments of production and the basic rates of remuneration for the owners of these resources, everything that is necessary would be achieved.” “In the history of economic science, Keynes is rightfully in the forefront of scientists who have had the greatest influence on the development of contemporary society,” R. Belousov and D. Dokuchaev write in their book. “Keynes became famous and revered during his lifetime, and fierce disputes over about his views do not subside until now. Keynesianism has become a prominent scientific school, relevant to this day. Keynes's ideas were widely disseminated and actively used in practice, in particular by US Presidents Franklin Roosevelt and John F. Kennedy. Even though not confirmed in everything, they helped many developed countries create new mechanisms for regulating the market economy in the second half of the 1930th century, preventing crises like the terrible depression of the XNUMXs. Author: Samin D.K.
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