Keynesianism And Neoliberalism Analysis

The modern world has become economically characterized by the widespread expansion of capitalism through the embrace of competition within the free market. Two ideologies that attempt to achieve economic prosperity are Keynesianism and neoliberalism. Keynesianism, envisioned by John Maynard Keynes, attempts to provide equality of opportunity, in the pursuit of the common good by allowing the government to intervene in the economy (Mintz, Croci, & Close, 2014). In opposition to Keynesianism, neoliberalism is an ideology whose proponents advocate for limited government intervention with the economy (Mintz et al., 2014). Varying degrees of opinion rise as to the extent to which the government should intervene in the economy. Keynesians would advocate
The neoliberal perspective originates with Fredrich Von Hayek. It became popular in the 1970s “New Right” movement through Milton Friedman, who held the position that the only purpose for the government was to maintain the rule of law (Friedman, 2002). In order to attain economic prosperity, even if running in a deficit, government involvement is necessary in order to achieve the common good through regulation of the free market. By doing so, the government is providing a basis for the pursuit of Keynesianism, while simultaneously rejecting the principles of neoliberalism. Many influential figures throughout history have utilized Keynesianism. Two such examples are the policies enacted by American President Franklin D. Roosevelt, as well as Canadian Prime Ministers William Mackenzie King and R.B Bennet, both of which led to sustainable
Through government involvement, nations as well as nation-states, have been able to achieve economic revitalization, sometimes even after global market failure such as that of the Great Depression. An example of this idea is clearly evident in the United States before to World War II. Prior to the New Deal’s enactment, the United States followed a mostly laissez-faire model in order to pursue individualism to a fuller extent. In 1929, Herbert Hoover was elected as the Great Depression began. As his predecessors before him, Hoover pursued minimal taxation. He also believed in little governmental involvement in the free market, which is very similar to that of neoliberalism. However, it was of little benefit. His policies, in coalition with the Great Depression, led to an unemployment rate of 25%, and the gross domestic product (GDP) fell by 30% (Van Giezen, R., & Shwenk, 2003). The result was widespread hunger, and destruction of all social culture. Ultimately, the unemployment led to political dissatisfaction with the Republican government, and the election of Franklin D. Roosevelt. Roosevelt introduced reform liberal polices, which were able to stimulate the economy. Influenced by Keynes, Roosevelt set up a series of Keynesian polices collectively known as The New Deal. The New Deal had four major objectives: to stimulate the market system, decrease unemployment, create public works, and to renew a sense of