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The Keynes Solution: The Path to Global Economic Prosperity
Today's financial crisis has led to a widespread lack of confidence in the laissez faire style of economic policy. In The Keynes Solution author Paul Davidson provides insights into how we got into the crisis―but more importantly how to use Keynes economic philosophy to get out of this mess. John Maynard Keynes was committed to making the market economy work―but our current system has been a dismal failure. Keynes advocated for an interventionalist government role, in cooperation with private initiative, to mitigate the adverse effects of recessions, depressions and booms. His economic policy helped the world out of the great depression and was an important influencer in the thinking behind FDR's new deal policies. In this book Keynesian expert Davidson makes recommendations and details plans for spending, monetary policy, financial market rules and regulation, and wages―all to reverse the effects of our past policies. Keynes renewed influence can be seen in Barack Obama's planned stimulus package, for example―and this book explains the basic tenet of Keynesian economics as well as applied solutions to today's critical situation.
208 pages, Hardcover
First published September 1, 2009
About the author
Paul Davidson
184 books8 followersLibrarian Note: There is more than one author in the GoodReads database with this name. See this thread for more information.
Davidson did not originally choose economics as a profession. His primary training was in chemistry, for which he got a BSc from the University of Pennsylvania. In 1951 he worked in that same university as an instructor in physiology and chemistry. He soon switched to economics, receiving his MBA from the City University of New York in 1955, and completing his PhD at the University of Pennsylvania in 1959.
He has taught economics at University of Pennsylvania, Rutgers University, Bristol University, University of Cambridge, and the University of Tennessee. He is a Visiting Scholar at the Schwartz Center For Economic Policy Analysis at the New School for Social Research and is currently an Emeritus Holly Professor of Excellence at the University of Tennessee, Knoxville. He is especially known for promoting a Post Keynesian school of macroeconomics. He and Sidney Weintraub founded the Journal of Post Keynesian Economics in 1978. He is the Editor of the Journal of Post Keynesian Economics.
Davidson did not originally choose economics as a profession. His primary training was in chemistry, for which he got a BSc from the University of Pennsylvania. In 1951 he worked in that same university as an instructor in physiology and chemistry. He soon switched to economics, receiving his MBA from the City University of New York in 1955, and completing his PhD at the University of Pennsylvania in 1959.
He has taught economics at University of Pennsylvania, Rutgers University, Bristol University, University of Cambridge, and the University of Tennessee. He is a Visiting Scholar at the Schwartz Center For Economic Policy Analysis at the New School for Social Research and is currently an Emeritus Holly Professor of Excellence at the University of Tennessee, Knoxville. He is especially known for promoting a Post Keynesian school of macroeconomics. He and Sidney Weintraub founded the Journal of Post Keynesian Economics in 1978. He is the Editor of the Journal of Post Keynesian Economics.
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Displaying 1 - 8 of 8 reviews
August 27, 2014
This little book is a convincing argument that 1) John Maynard Keynes was the smartest economist of the twentieth century, 2) American "Keynesians" like Paul Samuelson profoundly misunderstood Keynes's analysis, 3) the "victory" of the free-market theories of the classical libertarians Friedman and Hayek over the "Keynesians" after the breakdown of Bretton Woods was a victory over inconsistent and misunderstood versions of Keynes's theories, and 4) Keynes's actual analysis provides brilliant explanations for a) the crashes of 1929 and 2008, b) the inflation of the 1970s, and c) why the neoclassical equilibrium theories of Walras and many followers are false (hint: it anticipates the "reflexivity" of George Soros).
Keynes rejected the absurd hypotheses upon which neoclassical economics are based: 1) the "ergotic hypothesis" the we can predict the future based on the past, 2) that unemployment is the result of rigidities in wages caused by minimum wage laws (it is rather caused by a liquidity preference by capitalists who fear a drop in the demand for their wares), and 3) that a penny saved is a penny earned (actually it is a penny spent that is a penny earned). Throw in that Keynes's plans at Bretton Woods, had they been adopted (they weren't), most likely would have prevented the gross imbalances in international trade that we have today with the world's hegemon (the USA) also the world's greatest debtor and you have confirmation of Keynes's brilliance and the lack of sense in what passes for most economic theory. (For this story read The Battle of Bretton Woods by Steil and The Global Minotaur by Varoufakis.) Not bad for a 180-page book that you could read in an afternoon!
Keynes rejected the absurd hypotheses upon which neoclassical economics are based: 1) the "ergotic hypothesis" the we can predict the future based on the past, 2) that unemployment is the result of rigidities in wages caused by minimum wage laws (it is rather caused by a liquidity preference by capitalists who fear a drop in the demand for their wares), and 3) that a penny saved is a penny earned (actually it is a penny spent that is a penny earned). Throw in that Keynes's plans at Bretton Woods, had they been adopted (they weren't), most likely would have prevented the gross imbalances in international trade that we have today with the world's hegemon (the USA) also the world's greatest debtor and you have confirmation of Keynes's brilliance and the lack of sense in what passes for most economic theory. (For this story read The Battle of Bretton Woods by Steil and The Global Minotaur by Varoufakis.) Not bad for a 180-page book that you could read in an afternoon!
December 20, 2018
Well communicated but the whole critique sounds more ambitious than practical.
September 4, 2009
One Lucid Diamond…
America’s seminal economist, Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date. Not since the 18th century’s true mathematical logicians, De Morgan, Jevons, Clifford, Peirce and Veblen, have scientific ideas of logic, money and math mechanics been laid so clearly before our eyes. Mr. Davidson begins with a simple explanation of a true scientific method, any high school student can easily understand, then exposes the fallacies in relation to and of the classical economists’ and mathematicians’ mistakes, of economic model mis-applications and mis-interpretations of. He reveals his entire thesis in a simple dialectic method any gifted 5th grade student could understand, by keeping the technicalities to his other 22 published books, and some 200 articles. Never before, in the history of economics, has so much been revealed by such a simple, yet scientific, method.
As an example, Mr. Davidson, shows how the ‘universal’ facts, habits and ambitions of money, control the ‘particular’ events of all economic history. He does this by revealing Keynes’ true vision of how all nations’ balance of payments’ imbalances and hoarding, actually starves the world of its productive employment potential. This is truly where all macro-economic theses should start, yet sadly almost all other classical macro-economists see not the forest for the trees. It’s taken America’s yet unrecognized genius, Paul Davidson, to point this very fact out. He further exposes this first and foremost generating problem, creating the other unrecognized problems’ mechanics with and in ‘the ergodic theory’, ‘the neutrality of money theory’, ‘comparative advantage theory’, ‘free-trade theory’, ‘efficient market theory’, ‘the incompatibility theory of mobile money and full employment’, and all really generated from the fundamental ‘balance of payments’ imbalances and hoarding theory and facts’, just as Keynes originally stated and implied them, in his total works, published and unpublished, private and governmental letters, etc.
After clearly and succinctly showing the relationships between true Keynesian theories and facts, against classical mis-interpretations of the same theories and facts, Davidson easily explains his extended Keynesian solution, to the world’s present problems. This is done through his recognition of the world’s need for not only a new ‘re-regulation of financial markets and trade’, but also his, as it was Keynes’, call for a new ‘international financial architecture’, to re-balance the world’s prices, money and currency contracts. Davidson has updated Keynes’ ideas to a 21st century feasible plan of fundamental economic and highly possible political actions, the world sorely needs.
Never before has an economic book impressed me as much as this little treatise, as I see it having the potential of reaching not only the academic economists, but most all political, academic and intellectual elites, along with many private citizens. This is what the nation and world really and truly needs__a clear and concise manual to explain and solve the world’s massive problems. Davidson has succeeded as no other in accomplishing this job…
L.A.Gillespie
…autodidactic, polymathic economist, logician, etc…
----------------------------------------------------------
America’s seminal economist, Dr. Paul Davidson, has written the clearest vision of money and math mechanics, to date. Not since the 18th century’s true mathematical logicians, De Morgan, Jevons, Clifford, Peirce and Veblen, have scientific ideas of logic, money and math mechanics been laid so clearly before our eyes. Mr. Davidson begins with a simple explanation of a true scientific method, any high school student can easily understand, then exposes the fallacies in relation to and of the classical economists’ and mathematicians’ mistakes, of economic model mis-applications and mis-interpretations of. He reveals his entire thesis in a simple dialectic method any gifted 5th grade student could understand, by keeping the technicalities to his other 22 published books, and some 200 articles. Never before, in the history of economics, has so much been revealed by such a simple, yet scientific, method.
As an example, Mr. Davidson, shows how the ‘universal’ facts, habits and ambitions of money, control the ‘particular’ events of all economic history. He does this by revealing Keynes’ true vision of how all nations’ balance of payments’ imbalances and hoarding, actually starves the world of its productive employment potential. This is truly where all macro-economic theses should start, yet sadly almost all other classical macro-economists see not the forest for the trees. It’s taken America’s yet unrecognized genius, Paul Davidson, to point this very fact out. He further exposes this first and foremost generating problem, creating the other unrecognized problems’ mechanics with and in ‘the ergodic theory’, ‘the neutrality of money theory’, ‘comparative advantage theory’, ‘free-trade theory’, ‘efficient market theory’, ‘the incompatibility theory of mobile money and full employment’, and all really generated from the fundamental ‘balance of payments’ imbalances and hoarding theory and facts’, just as Keynes originally stated and implied them, in his total works, published and unpublished, private and governmental letters, etc.
After clearly and succinctly showing the relationships between true Keynesian theories and facts, against classical mis-interpretations of the same theories and facts, Davidson easily explains his extended Keynesian solution, to the world’s present problems. This is done through his recognition of the world’s need for not only a new ‘re-regulation of financial markets and trade’, but also his, as it was Keynes’, call for a new ‘international financial architecture’, to re-balance the world’s prices, money and currency contracts. Davidson has updated Keynes’ ideas to a 21st century feasible plan of fundamental economic and highly possible political actions, the world sorely needs.
Never before has an economic book impressed me as much as this little treatise, as I see it having the potential of reaching not only the academic economists, but most all political, academic and intellectual elites, along with many private citizens. This is what the nation and world really and truly needs__a clear and concise manual to explain and solve the world’s massive problems. Davidson has succeeded as no other in accomplishing this job…
L.A.Gillespie
…autodidactic, polymathic economist, logician, etc…
----------------------------------------------------------
November 9, 2016
No longer as fresh on the shelf as it was meant to me and sometimes dumbed down. TKS still is good for some enriching surprises. For instance: according to the author, the general perception of Keynes - arguably the most prominent economist in the last hundred years - is based on misconstruction and misinterpretation. And, while the analysis of the (neo)classical theory, which, again, according to the author, counts as the current wisdom is often insightful, Davidson's/Keynes' prescriptions vary from weak, e.g., requiring "public health warnings" that assets may become illiquid to horrible, e.g. requiring the government to make unlimited funds available to ensure orderly change in asset pricing. (Lots of people would have fun gaming that system).
Overall: somewhat worthwhile. but I am still in doubt whether I accomplished my goal of gaining a reasonably accurate notion of what Keynes really stands for. I came here since, like PD says, Keynes' General Theory is too obscure and difficult for the likes of me.
Overall: somewhat worthwhile. but I am still in doubt whether I accomplished my goal of gaining a reasonably accurate notion of what Keynes really stands for. I came here since, like PD says, Keynes' General Theory is too obscure and difficult for the likes of me.
June 10, 2014
The most important facet of this book that the reader should immediately be aware of is that it is NOT written for the general reader. This fact becomes obvious around the second chapter where Davidson begins dropping complex economic terms like "liquidity analysis". Nevertheless, even if you are completely dumbfounded when it comes to economics, Davidson's arguments are still advantageous to learn and hear-out. I personally found his insights into international trade very enlightening and interesting. Of course, for those who subscribe to the classical schools of economic thought (including the "pseudo-Keynesian" schools Davidson describes), the book will bring nothing but a headache. Overall, it's a very profound and in-depth account of how orthodox Keynesian policies can and could be beneficial to the economy, particularly in the case of the recent financial crises in America and Europe.
Want to read
August 16, 2010Hi all,
Anyone has this ebook, may you share with me? Many thanks in advance for your all assistant.
Have fun.
Anyone has this ebook, may you share with me? Many thanks in advance for your all assistant.
Have fun.
Read
July 27, 2011If you're going to write a book on how people have misunderstood Keynes you need to put in your book what Keynes actually said
July 16, 2015
Not the best book of Paul Davidson
Displaying 1 - 8 of 8 reviews