Keynesian economics

Keynesian economics or Keynesianism refers to the economic policies espoused by Lord John Maynard Keynes, particularly those contained in his The General Theory of Unemployment, Interest and Money. In general, these policies are a restatement in new terminology of a number of previously refuted economic fallacies. Keynes denied Say's law of markets, believed general overproduction possible, disparaged savings, and advocated both increased consumption and deficit spending as a remedy for recessions or depressions. His remedy for unemployment, created by the ability of politically protected labor unions to raise the wage rates of their members above those of the free market, was to lower the value of the monetary unit by credit expansion and inflation. He believed such an increase in the quantity of money would stimulate employment by increasing purchasing power, which he called "effective demand." For a refutation of Keynesianism, see Henry Hazlitt's The Failure of the "New Economics", W. H. Hutt's Keynesianism: Retrospect and Prospect, and The Critics of Keynesian Economics edited by Hazlitt.