One of the reasonings, as pointed out to me, Keynesianism’s lack of favour is that the theory rejects the laissez-faire aspect of liberalism. Heaven forbid that we should actually regulate society, or so the monetarists would claim. But what the neo-liberals claim and what they do are two vastly different things.
Just this week a number of leaders overseeing monetarist economies have spoken out, for example, against the fast food fatties. No doubt they are right, but doesn’t it seem odd that they are even suggesting regulating the industry?
To be fair, they don’t use the term regulate, and they would not impose restrictions themselves, that would come through qangos (quasi autonomous government organizations), at arms length from government.
Smoking is another area of discrepancy, with a wide range of regulations imposed. Rarely by central governments it is true, but they are still vocal about the need for restrictions.
Taxation is an obvious area as well, but most of the obvious current regulations fall broadly under ‘health and safety’ policy.
I’m not sure why this is, but my best guess is that is involves the powerful and wealthy insurance lobby. Let me say, I don’t believe, in practice, that there is such a thing as insurance, and certainly no voluntary aspect for the companies.
Another interesting anomaly with monetarist governments is their willingness to subsidise so many aspects of big business, while extolling that laissez-faire at the lower end of the scale. Whether through massive tax ‘incentives’, direct subsidies or vehicles such as untendered contracts, the big winners are invariably big.
One of the practical aspects of Keynesianism is a certain flexibility to regulating markets, and perish the thought, government’s own commercial activities.
I guess if the economy called for it, the system would provide incentives to business, but generally to produce an economically efficacious outcome – like more jobs.
Intervention is to Keynesian economics as laissez-faire is to monetarism. It’s just a case of how far the peanut butter is spread.
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They want laissez-faire when it comes to environmental regulations for example, but they claim strategic necessity when it comes to subsidies for steel and agriculture.
The central bank claimes laissez-faire when it comes to exchange rates, but they tinker with interest rates trying to produce the best economic conditions (or at least the ones that best serve capital, thus the hard-line stance against inflation).
The health and saftey thing is a little hard to figure out. I think the insurance lobby is an important factor, but I also think it is backlash from the auto industry in particular who sacrificed the public safety for profit until people like Nader came along and shed light. Now, I think, the safety lobby is a force unto it's own. It is a dangerous road that one. Of course no one wants to get hurt or killed, but how much enjoyment are we expected to give up to be "safe?"
Well, just as homeland security about that one. I think, "all of it" might be a good answer.
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