Keynesian theory holds that idle savings rather than spending retard capital accumulation

Evidence

17 One of Th e General Th eory’s main points of contention against the mainstream framework was the rejection of the idea that investments = savings (the socalled Say’s law). For Keynesians, what capital accumulation needs is not more (potentially idle) savings, but rather an incentive for investors to invest— that is, high enough profi t expectations. High profi t expectations come with the expectation of selling more goods that can be guaranteed by high aggregate demand— especially more government spending. — Clara E. Mattei, The Capital Order, 1683

Categorization

• DEFINE: Concise statement of the Keynesian rejection of Say’s law, useful as the theoretical foil to austerity doctrine.
• XREF: Grounds the reader’s whole analytic arc: the Keynesian vs. austerity clash that runs from this era into modern debates. — connects to: Keynes’s 1929 pamphlet first articulated that saving does not drive investment — Mark Blyth, Austerity: The History of a Dangerous…, 333; Savings do not necessarily produce investment and can instead produce hoarding — Mark Blyth, Austerity: The History of a Dangerous…, 342; Keynesians held deficit spending only causes inflation after full employment — Clara E. Mattei, The Capital Order: How Economists…, 1683 (+2 more)

Broader Connections

• Keynesians held deficit spending only causes inflation after full employment #expands (0.78) — Clara E. Mattei, The Capital Order, 1683
• Scarcity of savings stems from scarcity of loans, not vice versa #expands (0.75)