Peter F. Drucker on Economic Threats

CHAPTER THIRTY-NINE

Needed: A Full-Investment Budget

ECONOMIC POLICY IN THE DEVELOPED non-Communist countries has largely been based these last thirty years on belief in John Maynard Keynes’ “invisible hand”: consumer demand automatically and dependably creates investment and employment. But the evidence of these thirty years—and of the New Deal policies twenty years before them—has failed to validate the Keynesian theorem. And in the last ten or fi fteen years the actual experience has been the very opposite from what Keynes postulated: policies to raise consumption have produced sharply lower capital formation, declining investment, declining ...