I do not mean to impugn the social justice and social…
“I do not mean to impugn the social justice and social expediency of the redistribution of incomes aimed at by N.I.R.A. and by the various schemes for agricultural restriction. The latter, in particular, I should strongly support in principle. But too much emphasis on the remedial value of a higher price-level as an object in itself may lead to serious misapprehension as to the part which prices can play in the technique of recovery. The stimulation of output by increasing aggregate purchasing power is the right way to get prices up; and not the other way round.”
About This Quote
This interpretation was drafted with AI assistance. It is one reading of the quote, not the author's own explanation.
Keynes warns that focusing on high prices as a goal can mislead economic recovery; instead, boosting demand should raise prices naturally.
In simple terms: Higher prices should result from increased demand, not be the target.
Key Takeaway
Boost demand, not price levels.
Themes
economics
policy
inflation
recovery
Mood
analytical
cautious
Type
theoretical
policy
When to use this quote
- government stimulus
- business investment
- consumer spending
- inflation control
Key Concepts
aggregate demand
price mechanism
monetary policy
Questions to Reflect On
- How can policy ensure demand growth without causing inflation?
- What risks arise from targeting price levels directly?
A Different Perspective
If demand is insufficient, price targets may still fail.