Economics: What Would Keynes Say Today?

Keynes believed that everyone stood to gain from public investments that could foster collaboration between employers and workers based on shared gains from national growth.

In today's global economy, however, employers have less incentive to collaborate with workers than they once did. Multinational firms can easily relocate to low-wage, low-tax havens. With one click of a mouse, shareholders can move their capital out of the United States into mutual funds invested entirely in emerging markets, including China.

In other words, the cross-class coalition that supported strong state participation in the United States economy in the post-World War II has come undone.

He would explain our current shortfall of aggregate demand as the result of a tragic shortfall of national solidarity.

For more, see What Would Keynes Say Today? by Nancy Folbre, October 4, 2010 at Exonomix Blog, New York Times.