Final answer:
Modern liberals generally endorse a Keynesian style approach to capitalism, supporting more active government intervention in economic matters, especially during downturns. S
Step-by-step explanation:
The question asks whether modern liberals endorse a Keynesian style approach to capitalism. The answer to this question is generally yes. Keynesian economics is named after the economist John Maynard Keynes, who advocated for increased government expenditures and lower taxes to stimulate demand and pull an economy out of a depression.
Modern liberals often support Keynesian policies because they align with their belief in a more active government role in the economy, especially in times of economic downturn. This is contrary to classical liberalist views which emphasize minimal government intervention in economic affairs.
The "father of capitalism" is often considered to be Adam Smith, who is given this title because of his influential work "The Wealth of Nations," which laid the foundations for the study of economics and the importance of the free market. Contrastingly, Keynesian economics calls for government intervention to mitigate the disadvantages of a market-oriented economic system that were exposed during the Great Depression.
If the economy is experiencing rampant inflation, a Keynesian economist might advocate for stabilization policy that involves higher taxes and higher interest rates to cool down the economy. This intervention is meant to reduce spending and slow down inflation. However, the extent of governmental intervention that modern liberals support can vary significantly.