Keynesian Economics is Socialism for Wall Street

Have you every wondered how China’s economy could grow so sustainably large after the 1980’s?

It’s because they never adopted Keynesian economics.

Chapter 2 of Keynes’ General Theory exposes his corruption of Classical Economics in order to promote his Neoclassical hacks.

Classical economics is based on real wages and doesn’t care about nominal money-wages. But Keynes imposes the supremacy of money-wages over real wages. He then blames Classical Economics for causing unemployment during the Depression.

He fails to understand that Classical Economics failed because ‘profit maximization’ (a non-Classical idea) unnaturally strangled the investments and spending that would have generated the employment needed to break out of the Depression.

The proper solution was to destroy profit maximization by letting the government nationalize a failed major company in each major industry. This would allow that company to gain all the market share unless the private firms dropped their profit maximizing behavior and started borrowing and spending to compete with that company. That would then raise employment and lead to natural multiplier effects.

Such a solution will not need much monetary easing, but will need public spending for the government to buy those failed companies. China does this through its state owned corporations which check against profit maximization.

Instead of this solution, Keynes pushes for liquidity preference (the love for money) which leads to easing and speculation. It solves one problem by creating new problems such as inflation, inequality, public debt, and volatility which are so common nowadays.

Keynes turns the economy into a socialism for Wall Street. The banking industry loves this and so they promote Keynes via quantitative easing, bailouts, and stimulus. These then led to so many financial crises: Latin American debt-crisis, Asian Financial Crisis, and the 2008 Financial Crisis, as well as stafglation and the current inflation.