To a large extent, the theoretical production and “praxis” developed in the second half of the 20th century would come to be based on the “magic triangle” Keynes/Schumpeter/Galbraith.
Keynes, with his “General Theory of Employment, Interest and Money” (published in the first half of the 20th century, but with very long-term effects), sought to explain that the automaticity of market rebalancing mechanisms does not always work, with there being, in various circumstances, the need to resort to State intervention in the Economy, which would explain the admissibility of implementing counter-cyclical public investment policies, which could imply resorting to deficit budget and Public Debt.
Keynes explained – and well – that the determining variable of investment is the expected evolution of demand, making clear the effects resulting from the implementation of contractionary policies.
Schumpeter produced a theoretical break with the Conventional School by distinguishing production factors into material and immaterial factors, including innovation and creativity (as well as, naturally, technological progress) among the immaterial ones.
For the author, the determining factors for growth, from a long-term perspective, were technological progress/innovation and the transformation of the power structure.
Schumpeterian thought would have a lot of influence on structuralist theoretical production, since those two factors had a significant influence on changing the profiles of demand and supply, as well as on the typology of productive combinations, leading to the incorporation of more technological progress and changes in the aforementioned structure of powers.
Schumpeter found the tendency towards a certain socialization of capitalism to be inexorable, based on transformations in the power structure and the need to mitigate the weaknesses of original capitalism, through planning, market regulation and new income redistribution mechanisms.
Galbraith explained something that many economists and politicians have not yet realized.
The thing is, development without “Good Governance” doesn’t make sense.
“Good Governance” at the State level, of course, but “Good Governance” also at the company level, seeking effective and, therefore, responsible management of resources and establishing a NEW ETHICS.
Without “Good Governance” in Public management, it is not possible to put the CDF – “Comprehensive Development Framework” approach into practice, nor is it possible to instill in Public opinion the idea of respect for the “ruling political class”.
Without “Good Governance” in the private sector, it is not possible for economic-social agents (and, therefore, the economic partners of the business technostructure) to accept the rules established by the market, something that is essential to the consolidation of existing structures and, therefore, to the creation of a true environment of consultation between the different parties involved.
KEYNES-SCHUMPETER-GALBRAITH: an important virtuous triangle.
However, it is necessary for those responsible for politics to understand the potential of this virtuous triangle.
And explain them to public opinion.
And that they realize the ideas that underlie them.
Otherwise, those three great authors will have wasted much of their productive creative time.
No more, no less…
Economist and university professor. Write without applying the new Spelling Agreement