Mr. Keynes' Experiment.

Before I start, I like to clarify my comments that may have led SOMEPEOPLE to believe that I said that economics is not a worthy field of study. Put it this way, SOMEPEOPLE, economics, while a worthy field of study, does not arouse me intellectually. Put it this way, economic theory was to me nothing but a set of rules proposed by convincing writers (most of whom I assume were quite rich being able to afford education during those times) that have come to form the foundations on which modern economies are built on. Nothing more, nothing less - even taking into consideration of the newly founded field of behavioral economics.

Not that I know enough about the field to say this, but I find that the the foundations on which early theorists of economics (Smith apart) based their opinions on were in large motivated by the need of a structural change in the economies which concerned them - inevitably basing those theories on the models of extreme economic scenarios.

Ergo, brilliant reasoning and formulations aside, economic theories weren't independent of what was happening in society during their conception - A scenario ubiquitious acroos various fields of social science. Keynes' General Theory (which a few years ago I tried and failed to digest completely) came right after the Great Depression in the 1930s. As widely accepted as his suggestion of tightly implemented government facilitation the economy was, it was still after the painful experience of the collapse of a completely free economy that the world has learnt it's "lesson" (as i firmly hold on to me belief that the spread of Communism, even Nazi Germany is Great Depression related and are therefore contributions of the U.S.A. itself)

I am not a hater of Keynes' theoretical work. For although I am yet to be assured that Keynesian economics have contributed to mankind's management of their own greed (a.k.a. one's pursuit of self-interest), the world has seen drastic improvements since General Theory was published in 1936 - at least we won't have the collapse of a few companies bringing the whole world to an economic Ice Age ... Ooops !

In a guist, Keynes says that economics cannot survive on their own without an appropriate degree of federal intervention. His idea was mainly the reason why you see governments today issue bailouts. Simplified, his masterpiece is about his broader, more realistic views of Employment, Interest and Money.

1. The level of employment and it's components (wages to assess demand and prices to reflect it) not being a direct product (or indicator) of economic activity (Stickiness!!) *labour regulation required
   
2. Interest rates not neccesarily having the intended course of effect on capital returns. (Speculation, I think) *suggesting a more sophisticated process underlying interest rate decisions
   
3. Differentiating, from both macroeconomical and microeconomical perpectives, the economic characteristics of savings and investment * suggesting that goveernments need to dwelve deeper

While not necessarily the most updated of theories, Keynesian economics has always been assumed to have sown the seeds of a more regulated, and thereby "safe" global economic environment..... Thing is, a good seventy decades after it's conception we were loosely regulated going into the current potential collapse of the global economy as we were before the Great Depression except for the fact that the former involves a system of fucked up financial institutions whose disintegration would signify the end for the hopes and dreams of countless individuals of different ethnicity and religion in different geographic regions (it's no longer oil and railroads!!) . Unless, ofcourse, we assume that it's a mere flaw in the financial system and that the economic recession is periodical - a rather dangerous position considering the rate of government bailouts across the globe.

(Dinner!! I'll continue tomorrow)