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POLITICAL THEORY - John Maynard Keynes

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John Maynard Keynes was arguably the greatest economist of the 20th century. He discovered the idea that governments should stimulate demand during economic downturns – and was the creator of both the IMF and the World Bank. His ideas continue to underpin a lot of the modern economic system. If you like our films, take a look at our shop (we ship worldwide): https://goo.gl/C92mGs Join our mailing list: http://bit.ly/2e0TQNJ Or visit us in person at our London HQ https://goo.gl/VUCcPj FURTHER READING You can read more on this and other subjects on our blog, here: https://goo.gl/4vY9Wo MORE SCHOOL OF LIFE Our website has classes, articles and products to help you think and grow: https://goo.gl/fwVUx8 Watch more films on POLITICAL THEORY in our playlist: http://bit.ly/TSOLpoliticaltheory You can submit translations and transcripts on all of our videos here: https://www.youtube.com/timedtext_cs_panel?c=UC7IcJI8PUf5Z3zKxnZvTBog&tab=2 Find out how more here: https://support.google.com/youtube/answer/6054623?hl=en-GB SOCIAL MEDIA Feel free to follow us at the links below: Facebook: https://www.facebook.com/theschooloflifelondon/ Twitter: https://twitter.com/TheSchoolOfLife Instagram: https://www.instagram.com/theschooloflifelondon/ CREDITS Produced in collaboration with: Mike Booth https://www.youtube.com/somegreybloke Dr Chris Grocott http://www2.le.ac.uk/departments/management/people/chris-grocott https://leicester.academia.edu/ChrisGrocott #TheSchoolOfLife
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Text Comments (1167)
toseeornot2see (3 days ago)
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.
Marco Vinas (3 days ago)
The government provides corporations because they dont want to lose their money, so they invest government money, if they lose its government money, if they win it's corporations profits.
liltrollbox (3 days ago)
I guess this all hinges on your definition of "works".
liltrollbox (3 days ago)
4:59 this is where he completely loses me.
liltrollbox (3 days ago)
This fucking guy
kahwigulum (5 days ago)
Keynes was good, yes, but is not "arguably the greatest economist of the 20th century" as your description of him would suggest. He got a lot wrong and invokes the government (ie. reduce freedom at the point of a gun) whenever he can't figure out how to make his system work. He's a mediocre economist at best.
Daniel Ryan (6 days ago)
No Friedman? Hmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmmm?
Edward Dodson (7 days ago)
Keynes' most serious analytical failure was to discount out of hand the power of land markets and land speculations as a fundamental driver of cycles of boom-to-bust. He ignored changing land use; and, in particular, the rising rents extracted by owners of centrally-located or resource-laden lands.
Deniz Gunes (7 days ago)
at the end he *drops the mic*
Remco Bomhof (9 days ago)
too bad those debts never get paid.
TWICE MONO (9 days ago)
Milton Friedman please!
omfug (10 days ago)
Keynes was correct, the way that the world economy snapped back after the 2008 crash proves the basics yet again, for one thing, it is consumption that drives the economy and when consumers stop buying the government MUST step in for the short term, end of story. If he were alive now he might be appalled at the way that the United States is spending like there is no tomorrow when it had a chance to start paying off some of the debt however, I suppose that we will see how that plays out over the next couple of years.
sjewitt22 (14 days ago)
Looks great compared to the shit this Tory government has put the country through, though anything would look good next to this awful austerity.
DARIO (15 days ago)
This video makes me want to break windows
Vegard Fjeldberg (18 days ago)
9:00 Sick graph.
Nationalist (21 days ago)
I consider John Maynard Keynes to be among the best economist that ever walked on this planet if not THE best.
Conner Fields (22 days ago)
Great video.
Conner Fields (22 days ago)
I didn't know that the UK faced inflation in the 70s as well.
Will Nation-Dixon (1 month ago)
A Bancor would be such an amazing idea to put into practice
Belthazor22 (1 month ago)
So he was a tool?
Marc Jouannet (1 month ago)
temporal marginal propensity to import make 0 maximum salary per week for workers rest goes to government to maximise multiplier
Broombringer (1 month ago)
Do Anders Chydenius!
Bruno van Simon (1 month ago)
Brazil as of today has 17 million unemployed persons. Almost the same as US and Britain together in the 30s.
Michael Svoboda (1 month ago)
Still wating for Rothbard, Menschen!
Jj Chen (1 month ago)
Solving the markets problems is easy. Especially when no one is working. Hitler never read a word of Keynes and he got Germany out of the depression by simply using military and social spending.
Jj Chen (1 month ago)
So much how poverty are you going to accept until the market corrects itself.
Jj Chen (1 month ago)
free market is brutal. Its all about eliminating the weak and poor when the money supply contracts.
Jj Chen (1 month ago)
Its not like milton's theories ever produced enough discipline to get the govts to stop printing money.
Jj Chen (1 month ago)
Milton Friedman's theories never changed Keynsian economics. america still prints money just like everyone else.
espeon91 (2 months ago)
Why are all the economists called Milton? :P
J M Keynes (1 month ago)
Haha! https://www.youtube.com/watch?v=KgUemV4brDU
theMightyWebb (2 months ago)
Keynesian economics became almost completely obsolete after Milton Friedman
Rose Knapp (2 months ago)
Given the current state of education in increasingly class stratified 🎺 ‘Merca, seemingly approaching pay to play for education etc...these vids, data, libraries & podcasts might literally become the new PhDs lmao
Voranart Sirisubsoontorn (2 months ago)
JMK , to me, was the starting point of negative forces of government in democracy nation.
Laura (2 months ago)
Idiot, his theory is stupid. Free market is the best, it balances things. His stupid idea of government interventionism, this is how the debt comes along. Super national economic planning is wrong.
fuck the alt right (2 months ago)
smart arguments there retard
Alexis Altamirano (2 months ago)
Hayek Wins!
fuck the alt right (2 months ago)
2008
Anthony Mays (2 months ago)
Why do rich people always think they're so much smarter than everyone else. So what he still died and turned into Worm poop.
Ruby Honey (2 months ago)
END THE FRACTIONAL RESERVE PONZI SCHEME end the FED
Daniel Dingeldein (2 months ago)
Keynes was a salesman....he was in the pockets of the banking class. his theory was designed for them, not us.
fuck the alt right (2 months ago)
oh hi there retard
complete moron, second after marx
LittleImpaler (2 months ago)
This is why Keynesian economic doesn't work. Why? Because it's not the job of the government to help the people. It's bunch of big government. Keynesian cause the great depression.
fuck the alt right (2 months ago)
wow what a retatd it's not always big government only when the demand no longer exists
J M Keynes (2 months ago)
The Great Depression began with the Wall Street Crash of 1929. Keynes main contribution to economics 'The General Theory' was only published in 1936 but wasn't really listened to by governments until the 1940s. Now, you might blame the economic problems of the 1970s on Keynes, but you simply can't blame those of the 1930s on him.
Noritos (2 months ago)
The great depression was caused by laisez-faire capitalism
ChicagoTurtle1 (3 months ago)
God. This “theory” is so naïve 🤦🏻‍♂️
Grant Beerling (3 months ago)
Brilliant, summary...'Not Dogmatic', when in discussion about economics its the phrase I use about Keynes, so thanks for the confirmation. Friends and I always agreed that "Philosophy should always be written in pencil', and so should economic theory, it maybe considered a science, but its not an absolute....yet...
The PTA Mom (3 months ago)
Keynes was the cause of the majority of our modern financial problems
ProlificThreadworm (4 months ago)
Q:How does the government decide where to spend its taxed money in a way that serves the contributors? A: Fuck 'em, me and my funders are all that matters!
R3L 3Z4 (4 months ago)
What do you mean by knee jerk policies?
J M Keynes (2 months ago)
Quickly made decisions that might in retrospect appear to be hasty.
Black Phoenix (4 months ago)
"Keynes' was not a static or dogmatic understanding of Economics" No, it was just wrong.
Wezizwe Ginindza (4 months ago)
Great video!
Philosopher King (5 months ago)
HENRY GEORGE!
1000Marcopeters (5 months ago)
What is a knee-jerk policy?
J M Keynes (5 months ago)
Quickly made
J. Fernandes (5 months ago)
And he was wrong.
jbond5150 (5 months ago)
We are all keynesians... stiil holds to this day.
Laban Loefling (5 months ago)
Keynes is literally more evil than Satan himself.
J M Keynes (5 months ago)
Must have missed that lost fragment of the Bible.
Eddie Crowley (6 months ago)
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.
Accelerationist (6 months ago)
Please do a video about Thorstein Veblen.
Lord Horatio Nelson (6 months ago)
Governments shouldn't inject money into the economy to stimulate growth or create employment. The market is more competent than the government. Keynesians have some level of trust in a government that I can't muster. The only way a Keynesian based economy can truly function is under a Keynesian based dictatorship that one can genuinely trust to make "wise regulations."
Lord Horatio Nelson (5 months ago)
Das Kinophile ENTP When have I ever licked a wealthy person's boot (as in to act in order to gain their favour, which is what bootlicking is) and when did I say I trusted the wealthy?
Das Kinophile ENTP (5 months ago)
I'll never understand how/why some refuse to trust the government, but bootlick the wealthy and trust that they'll do the right thing for the people.
Yuriel Astillero (6 months ago)
DO Milton Friedman
the Alien8or (6 months ago)
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?
Rozma (6 months ago)
You had me until you blamed the 2008 crisis on neo-liberals, in which you clump the classic liberal Milton Friedman, which is laughable. If things were so wonderful under the keynesian system, why the switch? And LBJ was not Keynesian by your initial definition. He didn't create a deficit in order to create jobs, he provided a welfare state.
a dangerous idea
Yuriel Astillero (6 months ago)
Keynes only believe that governments would save economies from recessions, stagnations, and crises because, in his own argument, the free market had gone through unexpected pace, which in the end, the markets were out of control.-
Tyler Callahan (6 months ago)
The guy said he died at age 62, but the article says he died at age 63. Which is more reliable?
Luciano radice (7 months ago)
Keynes economics are ok for lifting a country out from depression, but once the country recovers economic growth spending has to be lowered, government can't just run deficits forever
gjs67 (7 months ago)
Record levels of debt for our grandchildren
Gary P. (7 months ago)
Please do Peter Kropotkin or Max Stirner
DD BB (7 months ago)
your channel is just amazing
Michael Replogle (7 months ago)
Bruh...why all ur vids look like alt indie music vids. The Shins must watch this shit and learn stuff, but also, like low key, be super jelly. But 4 real, supply side for lyfe. #Reaganator
KanMan (7 months ago)
The second a country adopts Keynes' ideas is the second it is no longer capitalist
Rodrigo Carneiro (7 months ago)
Keynes: globalist slaver dumbass
Rodrigo Carneiro (7 months ago)
Basically he teached the world how do create more poverty using the State (a coercitive and imoral institution) to manipulate the economy. Unfortunately people do not try to understand the real effects of his method of "solving the market problems"
Carlos Chau (7 months ago)
10:05 who is the guy next to Clinton?
Carlos Chau (7 months ago)
09:00 that is some achievement isnt it!
Gin (7 months ago)
Better than fucking Trickle down, made me realized how retarded, COMPLETELY RETARDED, it is, and now we're fucked
Marwen Juini (7 months ago)
Do Milton Friedman
Joe Smith (7 months ago)
when has the government ever saved a penny? oh yeah, never. and even if they did, how would that help? think about it. if the government had a 50% flat tax during "good times" (doing this for easy math) and packed all of it away in a piggy bank it would drive prices down, so that they would be approximately half what they would be if there were no taxes (not exactly, as people have savings), but since people only have 50% income nothing really changes. but the thing is, static money, is in some ways nonexistant. the government saving money is identical to the government reserving the right to print massive amounts of money. literally the exact same thing, effectively. when you try to reintroduce that money into the system it doesn't produce any more goods, instead it will cause inflation. The real reason people like Keynesian economics is because it gives the government power over who wins and who loses, instead of that being decided by society as a whole through voluntary transactions. the most important point is how the "saved up money" is distributed once the time comes. who payed into that savings fund vs who receives money out when things get bad. THAT RIGHT THERE IS THE KEY(nesian). it is a wealth redistribution scheme just like any other. It can be more akin to socialism, where the unproductive reap the rewards of the productive in return for votes, or more often than not, crony capitalism, where those who lobby government get first grabs on the "stimulus". Its pretty simple once you think about it for a few minutes. and also explains why Keynesian economics has received a surge of popularity in gov subsidized schools... The one thing i do find interesting about it though is the psychological aspect of it. if the economy looks healthier than it truly is due to this stimulus people will invest more into it which should ACTUALLY make it stronger. or it might just create bubbles which is kind of the opposite of what keynesian is supposed to do. Its like if you are playing poker and you think you are playing with better cards than you really are. yes, you will put more money in (so have the potential to get more out), but the question is, will you win?
Joe Smith (7 months ago)
and you think that makes it better? when the government pays for things it doesn't have the money for all it does is cause inflation which is essentially a tax on anyone with a savings account. this is also why the real tax rate is actually much higher than it would appear.
J M Keynes (7 months ago)
But Keynes isn't suggesting that the government should save money, not least of all because government doesn't pay for things out of money on deposit, it pays for it via loans from central banks which it then pays back with taxation.
Ivan Wotan (7 months ago)
The best system
Pukka Decor (7 months ago)
Yet again...an example of how Britain produced far more egalitarian minded economists versus the malignant guerrilla vulture capitalist minded Americans bent on unfettered free market capitalism ...corporate greed has stars and stripes written all over it
Zero Fox Given (7 months ago)
Your bias is showing.
J M Keynes (7 months ago)
In which direction do you think the video is biased?
ArseneGray (8 months ago)
The fuck.... So nobody did figured out a functioning economic system where people do not suffer periodically since the dawn of humanity?
Rod96 (8 months ago)
Tragically for the world, Keynes' ideas are impossible to correctly execute. He assumed that politicians would use reason to adapt it's policies to the cycle. In reality, government expansion is always easier than shrinking government. His theory has caused big harm because of the political aspect.
shidoink (8 months ago)
good rundown! im gonna have to read that essay about the grandchildren. it seems to me in the war of ideas, the nation centric idea of economy has sailed, and globalism has won. i hope for good reason. i do not like to see my country backsliding on more primitive ideas, and nothing to me is more primitive than chanting over and over 'America first' sure buddy look out for yourself. who will look out for the vietnamese rice farmer, themselves? or is it supposed to be vietnam? i guess they should be in charge of pulling the still active mines out of their country, too. sucks to suck, bucko.
Dean Di Mola (8 months ago)
Poor Keynes will be spinning in his grave after learning you CANNOT manipulate markets to try push them in any particular direction... it’s a natural trend based on human confidence.. look at the stupid quantity of money theory. QE 1, 2, 3 & 4 yet they didn’t get the inflation they wanted.. Keynes could have just looked back in history to the panic of 1840 to see this wasn’t gonna work. What a massive deficit making, shortsighted, government manipulating, baby eating, disaster his Marxist academic theories have caused us.
Kale Mussel (8 months ago)
As Richard Thaler puts it JM Kaynes is father of modern macro economics. Mr. Thaler won Nobel award for his work which is basically govts gotta give a nudge, I wonder what Frideman would say about Thaler if he was still alive or how Amazon, FB and Google's monopoly and free marker
Isaac Castro (8 months ago)
World needs another keynes
Henri Callegari (8 months ago)
Thank u so much for this video.
KONSERVATIV_ORK (8 months ago)
John Keynes is better than what history says of him. Eton, Cambridge, India and then the British treasury.
Derek Blackwell (9 months ago)
So let me get this straight, the government basically gives the money to the people creating debt for government. And in return, they get the all the money back to pay off the debt and then some. And boom, the economic problem is fixed?
Derek Blackwell (8 months ago)
Wojtek The Bear thanks man
Wojtek The Bear (8 months ago)
Well the government funds projects which creates jobs for people in the short term, hoping the people will use the money to increase consumer demand. Then, when consumer demand eventually increases again to a pre-downturn point and the economy enters another period of growth, the government pays off its debt with taxes.
Derek Blackwell (9 months ago)
So what happens if the government can’t fund or find projects to put people to work?
Jj Chen (1 month ago)
You print it. People are dumb. They dont know that the govt prints money.
Wojtek The Bear (8 months ago)
IF the government doesn't have the money, it should acquire money through government bonds (debt). And the government can always find projects for people to work. There are always ways of improving our infrastructure or repairing and fixing housing and other buildings.
Zachary Weaver (9 months ago)
Hayek > Keynes
Andi Jack (9 months ago)
Hayek has lose the first fight against keynes in the 1940s. In the 1970s - 1980s Hayek has won the Struggle of the Ideas. Since that time we are living in the libertarian World.
Karl Striepe (9 months ago)
Ah, the "multiplier effect": the liberal alternative to the conservative shibboleth of prosperity "tricking down." Politics by phrases, if you ask me, but that's democracy. Still, as the man said, better than the alternatives.
Wojtek The Bear (9 months ago)
Wow, you're comment is so misinformed it's kind of funny. First: No economist actually thinks trickle down economics is a thing. That phrase came from a misinterpretation of the policies of Republicans like Reagan. The original idea was to offer tax incentives to the upper class in order to get them to perform actions that the government deemed good for society. For example, one could get a tax break if they invested more in green energy for their manufacturing plants or opened up a new plant. A lot of news outlets didn't understand this though, and just assumed that the money was supposed to trickle down to the lower class, which was never the intention: https://fee.org/articles/there-is-no-such-thing-as-trickle-down-economics/ The fiscal multiplier is like was not an alternative to the tax incentives. For one: It's only ever supposed to be preformed during economic downturns. The rest of the time the government is supposed to be running a budgetary surplus under Keynes. You also put the phrase in quotes, implying to me that you don't think it exists. This is far from the case. There is no doubt that the fiscal multiplier does exist: https://www.imf.org/external/pubs/ft/wp/2014/wp1493.pdf and http://www.nber.org/chapters/c12634 The only question is whether these multipliers are large enough to warrant the government spending.
ben boragine (9 months ago)
20 trillion in debt later and some people still haven't realized how much of of clown keynes was
Wojtek The Bear (9 months ago)
Yes, because our economy totally imploded due to our debt. First, nominal debt means nothing. Debt to gdp is the only statistic that really matters and, according to that, we're alright. Not great, but not horribly off. Furthermore, Keynes only wanted government deficits during downturns. During economic growth he wanted the government to run a surplus. You can't blame the stupidity of policymakers on an economic school they decided not to follow.
R Zappa (9 months ago)
Leo Strauss would be excellent
Jordan London (9 months ago)
Blockchain tech in conjunction with parts of keynesian and other economic theories could be exactly what this planet needs. We are just waiting for somebody to come along and put the puzzle pieces together.
Max Coyle (9 months ago)
The way he says 'neo-liberals'. So good.
rodrigo (9 months ago)
Just in case someone walks in here distracted: KEYNES IS NOT THE REASON THE WORLD`S PRODUCTION GREW SO FAST IN THE LATEST CENTURY, ITS JUST CAPITALISM.
Jj Chen (1 month ago)
Because as long as the people are enslaved by fake money. People will keep making stuff and contribute to the economy.
Jj Chen (1 month ago)
If we print fake money. We go to jail. If the govt and banks print fake money. Its considered good. This is how govts and banks keep the economy growing. Its also how they keep the people enslaved.
Jj Chen (1 month ago)
Have you ever taken a job that didnt pay you fake money? Of course not. Everyone of us has been conditioned that fake money is real money. So as long the govt keeps printing fake money. People will continue to have jobs.
Jj Chen (1 month ago)
It wasnt capitalism unless you are referring to infinite money growth due to fractional reserve lending. People dont work unless banks are spitting out fake money.
Wojtek The Bear (9 months ago)
And globalization.
Petr Rini (9 months ago)
A genius in my mind! Way ahead of todays economists.
Wojtek The Bear (9 months ago)
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: http://www.nber.org/papers/w6060 here:https://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.
Petr Rini (9 months ago)
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.
Wojtek The Bear (9 months ago)
A genius, sure? Ahead of today's economists? Not really, especially since some of his ideas had to be later fixed by contemporary economists.
Crimson Corsair (10 months ago)
Centrism
Gabriel 1 (10 months ago)
Well intentioned idealists are often historically prone to be manipulated unbeknownst until too late! Keynesian economics is a busted model!
Wojtek The Bear (9 months ago)
Yeah, so busted that it's offspring are considered the standard models for contemporary economics and Austrian economics is laughed at my a vast majority of economists.
Gabriel 1 (10 months ago)
Please do one on Austrian Economics?
Edward Dodson (11 months ago)
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).
Kyle Anderson (11 months ago)
Don't watch the video, ill sum this clown up in one sentence. Keynes believed during economic downturns, the government should pay people to dig holes in the ground and then pay other people to fill the holes back up.
daniele one (11 months ago)
Keynesian economics were inactivated in Post World War 2 in Europe and America and the economy was not only booming but the middle class was born. Then people started listening to Friedman.....

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