Who did John Maynard Keynes believe had the largest influence on spending in an economy?

John Maynard Keynes argued that government plays a critical role in influencing spending in an economy, particularly during periods of economic downturn. He believed that government intervention through fiscal policy—such as increased public spending and tax adjustments—could stimulate demand and encourage economic activity when private sector spending was insufficient.

Keynes felt that in times of recession, when individuals and corporations might hold back on spending due to uncertainty, government action could help stabilize the economy. This perspective was rooted in his broader theory of demand, where aggregate expenditure is a driving force behind economic growth and employment levels. By investing in infrastructure, public services, and social programs, Keynes believed that the government could effectively boost aggregate demand and enhance overall economic performance.

In contrast, while individuals and corporations also influence spending, their behavior can be more volatile and less reliable during economic fluctuations. Non-profit organizations, while significant in their own right, typically do not operate on a scale that would match the government’s overall impact on national economic activity. Thus, according to Keynesian theory, government spending and policy are pivotal in guiding and stabilizing economic dynamics.