KIMS Keynesian Institute of Management and Sciences Claimed

The ideas of economists and political philosophers are more powerful than is commonly understood… Practical men, who influence, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.” The most important ‘defunct economist’ of the twentieth century is the man who penned these words – John Maynard Keynes. Over the twenty-five years following the end of the First World War, Keynes transformed the way in which Economics was viewed as a discipline and as an aspect of government policy.

During the 1920s, Keynes studied European finance and wrote The Treatise on Money (1930). It was due to this accomplishment that he was nominated as British representative to the 1944 Bretton Woods conference on international monetary policy. At the same time, Keynes amassed a considerable sum by speculating on the stock market, handling his transactions by telephone before getting out of bed each morning.

It was in 1936, in the midst of the Great Depression, with millions throughout Europe and the United States unemployed that Keynes’s masterwork, “The General Theory of Employment, Interest, and Money” appeared. The market is not a self-regulating mechanism, Keynes argued. To bring the economy quickly out of depression and end high unemployment, some way of stimulating investment and capital expansion is needed; only by maintaining ‘effective demand’ – a desire for goods and services among people who have the money income to pay for them – can recessions be warded off. The natural entity to stimulate aggregate demand, Keynes asserted, is the government using a combination of deficit spending and regulation of tax-rates and money supply.
Just as Keynes predicted, his theories (those of an academic scribbler) were not really utilized by government policy-makers for many years after the publication of his “Magnum Opus”. But Keynesian Economics, as it is called, has, since the 1950s, been a dominant force in government policy-making all over the world.