Failure of Keynesian economics

[oneday]

Please explain the failure of Keynesian economics. David Harvey and others argue that as soon as Keynesian and welfare state economics are implemented, the capitalists begin work at undoing the reforms, what we call neo-liberalism is class warfare against the working class.

But what are the deeper structural problems inherent in Keynesian and welfare state economics that eventually cause crisis?

[Antiochus]

Well I think its quite simple. Neo-liberalism is more or less capitalism unchained, unrestrained and "natural", so to speak. It is homologous (though the key thing it is not necessarily structured the same way; i.e there is a lot of state-to private sector- collaboration in neo-liberalism that didn't exist in 1850s Manchester) to the Capitalism of Marx and so on.

The problem with Keynesian economics is that it doesn't permit for full capital accumulation; crumbs are giving to the starving masses. It is exploitative; but it does contain certain ameliorating factors that make life a little bit more tolerant (less unemployment; greater social programs etc...).

The key thing is that Keynesian economics are only implemented if there is a strong worker's movement as a way to stave them off. In the late 19th and 20th centuries, that existed; it no longer does. Hence the death of Keynesian economics. Should there be another USSR for example, or another worker's movement spurred on by a crisis, it will probably resurface in most of the developed nations.

[Sinister Cultural Marxist]

Please explain the failure of Keynesian economics. David Harvey and others argue that as soon as Keynesian and welfare state economics are implemented, the capitalists begin work at undoing the reforms, what we call neo-liberalism is class warfare against the working class.

But what are the deeper structural problems inherent in Keynesian and welfare state economics that eventually cause crisis?

From what I understand, Keynesian economics controls or limits the crises of Capitalist economies, but they tend to reduce the rate of profit over time for Capitalists by increasing employment and the price of labor, not to mention taxation. Capitalists become increasingly dependent on access to government largess, instead of being free to seek profits wherever they can find them. This means that firms will be more vulnerable to things like price shocks, exemplified by the oil crisis of the 70s which coincided with the rise of neoliberalism. When rates of profit are so small, there's very little freedom for firms to respond to sudden increases in commodity prices. "Free" the labor market, and suddenly the price of labor goes down, and you are able to extract more surplus value.