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What are some criticisms of Keynesian economics?

What are some criticisms about Laissez Faire economics?

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    Economic models that show that the market will reach an efficient equilibrium on its own rely on assumptions that do not hold true (ie the Arrow-Debreu model), and it would be very hard to argue against this. Economic theory suggests that public goods will be under-provided (so will not exist at their efficient level) if it is left to private hands to provide them. They are generally better off being provided by governments. Laissez-faire suggests that competition will make the market outcome efficient. However it is quite generally agreed that patents are required for there to be incentive for industry to be innovative, and I'd say innovation is one of the main drivers of economic growth. So you have a situation where government enforced monopolies are required to allow the economy to do its best. Not only this stuff, but in a world where firms often have market power, what stops them from mistreating consumers or other firms? There needs to be regulation (but well thought out regulation) to ensure that the lack of competition in these situations does not lead to a bad outcome (like the sub-prime mortgage crisis). Foolcow, that's an opinion, not an argument. If what you are saying is right then you would be able to say why the criticisms aren't valid, and seeing that you haven't, it looks like you can't. You would have done more to promote Laissez-faire economics by keeping your mouth shut.

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The term was first used by the classicalest who believed that in the long run full employment is guaranteed and the velocity (the amount of time money changes hands) was consent. So they came up with an equation to figure out output. MV=PY call the Fisher equation. Named after the early 1900 economist that first came up with it. Y is output V is velocity, M is money supply and P is price. So since V is consent and money is set. You could then set Normal GPD (py is normal GDP). Keynes proved that employment is not always full and that velocity is not consent. Then the equation fall part and so does the whole of the classicalest argument about output and just leaving the economy alone. He proved that it may be necessary to increase the money supply to push employment back to it optimal level. That the market may fail to do so. Keynes once said that while employment is guaranteed to be full in the long run "we will all be died in the long run". He talking about a liquidity trap. This has to do with the IS-LM model (which is rather complex). It is a point were interest rate can no longer be lower and the market fails to recover back to full employment.

SmithtoMalthus

One reason i know is because in alot of Laissez Faire most of the time it leads to market failure =/

minimum wage can be ridiculously low workers can be treated like crap the divide between working class and middle class can be made even more wider due to middle class being able to be as greedy as they like.

A n t o n i o ;'D

they say it doesnt work, it takes too long to fix the problem when the gov't thinks if they quickly jump in they can change things faster.

°o° mnm-ish °o°

Most of the criticisms aren't really valid, they just boil down to "I'm not happy, so I want the government to do X for me by force."

Arminius

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