Question

describe the thought of economist John Maynard keynes during the Great Depression

Answer 1

The "Keynesian State" is a name we give to the regulatory mechanisms of world capitalism which operated, fairly successfully, from the end of the Great Depression to the late 1960s. During that period the old mechanisms which had always regulated the economy --especially the business cycle-- were replaced by new ones. With something of an adaptive lag, economic theory also changed as classical economics with its rationalization of laissez-faire (based on the belief that markets will automatically bring about necessary adjustments) came to be seen as inadequate to the new situation and was replaced by "Keynesian" economics with its new emphasis on the role of the state in managing the economy.

The death of the business cycle as a regulatory mechanism was not immediately obvious in the 1930s. But in the wake of the great financial crash of 1929, as the economy plunged into crisis, the cycle went down and did not come up again by itself. It stayed down. The financial crash became generalized economic downturn, recession became depression, yet there was no restoration of growth.