Essay #7
In his renowned book The General theory of Employment, Interest and Money, Keynes ends by asserting problems and strength of capitalist economy. The last chapter of the book, chapter 24 begins with the statement that the biggest and foremost problems of capitalism are “its failure to provide for full employment, and its arbitrary and inequitable distribution of wealth and incomes.” Keynes ends up suggesting an active role of government to intervene with fiscal and monetary policy to keep down the interest rate, which would ultimately lead to the “euthanasia of the rentier”. He considers this as a “transitional phase” that will disappear when it is done serving its purpose.
Keynes argues in his last chapter that the most important strength and positive effect of capitalism is that it offers the best initiation and protection of individualism which allows individual to have freedom of choice and personal liberty. Individualism would ultimately lead from self-interest to greater efficiency and innovation. However, on the other hand, a free unregulated market like to cause …show more content…
But before going into the explanation of the “euthanasia of the rentier”, it is important to understand what is the rentier class. Rentiers are those passive investors whose incomes come from their accumulated wealth or savings. The rentier may include people who live off their income in the form of dividends, interest or rent of real estate. Keynes actually portrayed the rentier as the “functionless investor” and criticizes them for actively discouraging economic and social change to protect their interests and income from accumulated property and money contracts. He believes that in order to eliminate crises, the institutional structure of capitalism itself needs to be changed. Specifically, he calls for the euthanasia of the
In his renowned book The General theory of Employment, Interest and Money, Keynes ends by asserting problems and strength of capitalist economy. The last chapter of the book, chapter 24 begins with the statement that the biggest and foremost problems of capitalism are “its failure to provide for full employment, and its arbitrary and inequitable distribution of wealth and incomes.” Keynes ends up suggesting an active role of government to intervene with fiscal and monetary policy to keep down the interest rate, which would ultimately lead to the “euthanasia of the rentier”. He considers this as a “transitional phase” that will disappear when it is done serving its purpose.
Keynes argues in his last chapter that the most important strength and positive effect of capitalism is that it offers the best initiation and protection of individualism which allows individual to have freedom of choice and personal liberty. Individualism would ultimately lead from self-interest to greater efficiency and innovation. However, on the other hand, a free unregulated market like to cause …show more content…
But before going into the explanation of the “euthanasia of the rentier”, it is important to understand what is the rentier class. Rentiers are those passive investors whose incomes come from their accumulated wealth or savings. The rentier may include people who live off their income in the form of dividends, interest or rent of real estate. Keynes actually portrayed the rentier as the “functionless investor” and criticizes them for actively discouraging economic and social change to protect their interests and income from accumulated property and money contracts. He believes that in order to eliminate crises, the institutional structure of capitalism itself needs to be changed. Specifically, he calls for the euthanasia of the