Question

Why does Keynes believe the private economy will not always provide sufficient employment? Why does he call government spending the “ Socialisation of investment”? How Much of his argument is analytical? How much political?

Answer 1

Keynes believed that private economies will not provide sufficient employment as the only people benefitting from it are the ones who are on the higher ranks. He calls government spending as a form of socialisation investment because he argues that during an economic depression, the government should not save but instead spend to enable more economic growth. He believes in this:

“For the engine which drives Enterprise is not Thrift, but Profit.”