Political economy and globalization - Varieties of capitalism - Managed or unmanaged capitalism?
5 important questions on Political economy and globalization - Varieties of capitalism - Managed or unmanaged capitalism?
What is the central issue in economic policy?
"Does a capitalist economy work best when it is left alone by government, or can stable growth and prosperity be achieved only through a system of economic management?"
How can this question be answered?
Why was the credibility of Keynesianism damaged?
Keynes' ideas were undermined by their association with the 'tax and spend' policies that might have sapped enterprise and initiative, and undermined growth by creating permanently high inflation.
How has the rise of neoliberalism signalled a shift from government intervention and towards free market?
Neoliberalism therefore amounts to a form of market fundamentalism (absolute faith in the market to provide solutions to all economic and social problems).
How did neoliberals thought to achieve full employment?
Keynesian policies are designed to boost output and reduce unemployment, which merely fuel inflation by encouraging governments to borrow (print money).
Alternative: shift away from demand-side policies that encourage consumers to consume, and towards supply-side policies that encourage producers to produce. This invariably means deregulation and tax cuts.
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