Despite the regular occurrence of slumps the general trend has been for the amount of wealth in the world, especially means of production, to increase. So will the growing demand of the State for buildings and equipment (schools and hospitals as well as armaments) to carry out this work. The foundation of Keynesian economics is built around driving business investment. Even if the State were itself to take over direct responsibility for all investment by establishing a state capitalist economy within its frontiers, it could still not escape the dictates of the world market. Keynes was saying in effect that there was no reason to believe that the system would always recover from a slump: the lack of market demand might be permanent and lead to a permanent slump, to state of stagnation. All rights reserved. He showed how, due to what amounted to hoarding of profits (which he called “liquidity preference”), there could be a lack of market demand. Seven years later, when Keynes’s The General Theory of Employment, Interest and Money was published, the world was still nowhere near its pre-Depression level of production. And Keynes enumerates four `conditions of stability' (ibid., pp. That’s fine except that it has a tendency to result in a world of haves and have nots. Unfortunately, some people have taken the idea of using some government to mean total authoritarian control via government. 3. In this article, we compare and contrast their ideas in the context of the current crisis of capitalism, to see if any of these figures and their writings really does have the answers to solve the problems facing society today. Slumps (during which total market demand falls short of existing productive capacity) are the opposite of booms (during which total market demand exceeds existing productive capacity). It follows, therefore, that, given what we shall call the community’s propensity to consume, the equilibrium level of employment, i.e. That States do in fact possess such a power is very much open to question. Which means that you have to create an environment which is friendly to entrepreneurship and those who want to take a chance at making it big in the market. They do not intervene in the capitalist economy from outside but rather are themselves essential parts of it, and have to rely for every item of wealth they consume on what they can obtain from enterprises, non-State as well as State. Since then the world exchange economy has resumed its growth, still punctuated by booms and slumps, misleadingly called “stop-go” to give the illusion that these fluctuations are the result of deliberate government policies rather than the normal working of the unplannable exchange economy. 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