1. It denies Say's law in traditional economics, that is, "supply will automatically create demand", so there is no economic crisis, and clearly recognizes the existence and serious destructiveness of the economic crisis.
2. Abandoning Adam Smith's "invisible hand" mechanism in traditional economics, not believing in the perfection and coordination of the market mechanism, believing that the economic crisis can't be restored to equilibrium through the automatic adjustment of the market mechanism, and insisting firmly that the serious economic crisis should be rescued by strong government intervention.
3. Denied the "external cause theory" of traditional economics in exploring the causes of economic crisis, turned to look for unstable internal structure, and thought that "insufficient effective demand" was the main reason. Starting from investigating the decisive factors of production, employment and income, the principle of effective demand and three psychological laws were established.
4. A modern macroeconomic analysis was initiated to study the total employment, total production and national income and the reasons for their changes, so as to distinguish it from the microeconomic analysis of the economic behavior of a single commodity, a single manufacturer and a single consumer family.
5. Abandon the traditional sound fiscal principle, advocate an expansionary fiscal policy, and advocate expanding government expenditure, deficit budget and debt expenditure.
it is undeniable that the implementation of Keynes's economic policies eased the economic crisis, reduced unemployment, promoted economic growth, and made the western world experience "prosperity" for 25 years. However, the long-term implementation of Keynesian expansionary economic policies brought about "stagflation" in the 197s, which forced Keynesianism to withdraw from the throne of "official economics" and give way to neoconservative economics. Even so, we can still see a strong Keynesian color in the economic policies implemented by various countries.
what kind of person was Keynes? The birth of John Mayoard Keynes (1883 ~ 1946) coincided with the death of Marx. Keynes is not a simple economic theorist, and some people blame him for spending too little time on economic research in his life.
Keynes had many friends and diverse interests, which was the case when he was still studying at Eton College and Cambridge University. Keynes served in the Indian Affairs Department of the government with outstanding achievements. He has engaged in practice, worked as a teacher at the Royal College and worked as a treasurer. These positions are also good opportunities to show his talents. This institution was on the verge of bankruptcy in 192, but by the year of Keynes's death, it had a net worth of 2 million pounds. Keynes was interested in drama, literature, music and ballet art, and his wife was a Russian ballet dancer. Keynes also studied mathematics. Before he graduated from college, he wrote a book on probability theory.
during the first world war, Keynes was an adviser to the advisory group of the royal Indian finance minister and a director of the bank of England. After the war, he participated in the Paris Peace Conference as the main representative of the British Treasury, but resigned soon because he was deeply unhappy with the contents of the Treaty of Versailles and did not advocate demanding compensation from Germany. In 1944, Keynes attended the Bretton Woods Conference as the chief representative of the British delegation and made great contributions to the establishment of the International Monetary Fund and the World Bank. In addition to the General Theory, Keynes also wrote many works in his life, such as The Theory of Currency Reform, The Road to Prosperity and How to Raise War Expenses. "and so on. But Keynes's main contribution is his main work, The General Theory, which reflects his basic theory and policy proposition.