To understand the divergent views relating to Keynesians and Neoliberals, it is first important to define the two economic groups. (Princeton) regards Keynesianism as “the economic theories of John Maynard Keynes who advocated government monetary and fiscal programs intended to stimulate business activity and increase employment” defines Neoliberalism as a “Late-twentieth century variant of theory that competition among businesses in market with limited state regulation best fosters growth; specifically, advocacy of free enterprise in competitive global markets and movement of goods and capital unburdened by tariffs and regulations...” (Bourdieu; cf. Treanor). To understand the divergent views on finance, economics, politics and social policies of Keynesians and Neoliberals, these four policies therefore need to be broken down, explained and analysed.
Table of Contents
- Introduction
- Finance
- Economics
- Politics
- Society
- Conclusion
Objectives and Key Themes
This text aims to explain the differing viewpoints of Keynesians and Neoliberals regarding finance, economics, politics, and society. It seeks to clarify these diverging perspectives by defining each economic school of thought and analyzing their approaches to key policy areas.
- Keynesian vs. Neoliberal approaches to government finance
- Contrasting economic philosophies and their impact on employment and growth
- Divergent political strategies and the role of government intervention
- Social implications of Keynesian and Neoliberal policies
- Comparison of short-term versus long-term economic goals
Chapter Summaries
Introduction: This introductory section defines Keynesianism and Neoliberalism, setting the stage for a comparative analysis of their differing views on finance, economics, politics, and social policies. It highlights the need to examine these four areas to understand the fundamental divergence between these two economic schools of thought.
Finance: This chapter contrasts Keynesian and Neoliberal approaches to managing government finances. Keynesians prioritize government spending to maintain high employment, often supporting public sector industries. Neoliberals, conversely, focus on stimulating competition and creating a business-friendly environment to foster growth and increase employment through private sector initiatives. The chapter contrasts Keynesian preference for control over capital outflow (e.g., through import controls as advocated by the Alternative Economic Strategy) with the Neoliberal emphasis on free markets and reduced state intervention.
Economics: This section explores the core economic goals and strategies of Keynesians and Neoliberals. Keynesians aim for full employment to drive economic growth, advocating government spending, tax cuts, or budget balancing to achieve this. Neoliberals prioritize improving overall well-being through competition and entrepreneurship, believing that private sector profits will fuel innovation and create jobs. While both groups desire high employment and growth, they differ significantly in their approaches, with Keynesians emphasizing consumption-driven aggregate demand and Neoliberals promoting private sector investment and competition.
Politics: The chapter analyzes the political implications of Keynesian and Neoliberal policies. Keynesian policies, prominent from the Great Depression to the late 1970s, emphasize government intervention, including interest rate manipulation to stimulate borrowing and investment, and maintaining a large public sector. The rise of Neoliberalism under Thatcher utilized monetarist policies, focusing on interest rates to control inflation and reducing the size of the public sector through privatization. This chapter highlights the contrasting political approaches to managing the public and private sectors, and the contrasting use of government tools like interest rates.
Society: This chapter examines the social impact of Keynesian and Neoliberal policies. Keynesians prioritize full employment, believing that government intervention is crucial to support the population. They emphasize consumption as a key driver of economic growth. Neoliberal policies, while aiming for long-term growth and employment, may lead to short-term social costs like increased unemployment due to restructuring and cost-cutting measures. The chapter highlights a potential tension between short-term social welfare priorities (Keynesian) and long-term economic growth objectives (Neoliberal).
Keywords
Keynesianism, Neoliberalism, government finance, economic growth, full employment, government intervention, free market, competition, privatization, interest rates, public sector, private sector, social welfare, aggregate demand, consumption, investment, short-term, long-term.
Frequently Asked Questions: A Comparison of Keynesian and Neoliberal Economic Approaches
What is this text about?
This text provides a comprehensive overview of Keynesian and Neoliberal economic philosophies. It compares and contrasts their approaches to finance, economics, politics, and society, highlighting key differences in their policy prescriptions and objectives.
What are the main topics covered in the text?
The text covers the following key areas: Keynesian and Neoliberal perspectives on government finance; contrasting economic philosophies and their impact on employment and growth; divergent political strategies and the role of government intervention; social implications of both economic schools of thought; and a comparison of short-term versus long-term economic goals.
What is the difference between Keynesian and Neoliberal approaches to government finance?
Keynesians prioritize government spending to maintain high employment and often support public sector industries. Neoliberals focus on stimulating competition and creating a business-friendly environment, emphasizing private sector growth to increase employment. Keynesians may favor control over capital outflow, while Neoliberals emphasize free markets and reduced state intervention.
How do Keynesian and Neoliberal economics differ in their approach to economic growth?
Keynesians aim for full employment to drive economic growth, advocating government spending and tax cuts (or budget balancing) to achieve this goal. Neoliberals prioritize improving overall well-being through competition and entrepreneurship, believing that private sector profits fuel innovation and job creation. Both seek high employment and growth, but employ different methods – Keynesians emphasizing consumption-driven aggregate demand and Neoliberals promoting private sector investment and competition.
What are the differing political implications of Keynesian and Neoliberal policies?
Keynesian policies, dominant from the Great Depression to the late 1970s, emphasized government intervention, including interest rate manipulation and a large public sector. Neoliberalism, as seen under Thatcher, utilized monetarist policies focusing on interest rates to control inflation and reducing the public sector through privatization. The contrast lies in the level and type of government intervention and the relative size and role of the public and private sectors.
What are the social consequences of Keynesian and Neoliberal policies?
Keynesians prioritize full employment and believe government intervention is crucial to support the population, emphasizing consumption-driven growth. Neoliberal policies, while aiming for long-term growth and employment, might lead to short-term social costs such as increased unemployment due to restructuring and cost-cutting. A key tension exists between short-term social welfare priorities (Keynesian) and long-term economic growth objectives (Neoliberal).
What are the key terms used to describe these economic approaches?
Key terms include: Keynesianism, Neoliberalism, government finance, economic growth, full employment, government intervention, free market, competition, privatization, interest rates, public sector, private sector, social welfare, aggregate demand, consumption, investment, short-term, and long-term.
What is the purpose of the chapter summaries?
The chapter summaries offer concise overviews of the key arguments and comparisons presented in each section of the text, providing a structured understanding of the core differences between Keynesian and Neoliberal economic thought.
What is the overall conclusion of the text?
The text concludes by highlighting the fundamental differences in philosophy and approach between Keynesian and Neoliberal economics across four key areas: finance, economics, politics, and society. It underscores the need for understanding these distinct perspectives to analyze economic policies and their effects.
- Quote paper
- William Garner (Author), 2015, The divergent views of finance, economics, politics and society held by Keynesians and Neoliberals, Munich, GRIN Verlag, https://www.grin.com/document/323338
