Democratic Economics: Keynes

The modern ideal of the democratic economic system has been described best, I believe, by John Maynard Keynes, in his most famous work, The General Theory of Employment, Interest and Money. Consider the following passages:

Book VI., Chapter 24, III.
...“The State will have to exercise a guiding influence on the propensity to consume partly through its scheme of taxation, partly by fixing the rate of interest, and partly, perhaps, in other ways. Furthermore, it seems unlikely that the influence of banking policy on the rate of interest will be sufficient by itself to determine the optimum rate of interest....
“The central controls necessary to ensure full employment will, of course, involve a large extension of the traditional functions of government. Furthermore, the modern classical theory has itself called attention to various conditions in which the free play of economic forces may need to be curbed or guided. But there will still remain a wide field for the exercise of private initiative and responsibility. Within this field the traditional advantages of individualism will still hold good.”
[Great Books of the Western World, Mortimer J. Adler, Editor in Chief. Volume 57, pp. 454-5]

Keynes identified the traditional advantages of individualism as being [1] the efficiency achieved by decentralized decision-making and [2] the safeguarding of personal choice and variety of life. He was opposed to authoritarian systems on the grounds that such systems resulted in inefficiency and loss of freedom. But he believed it would be necessary to enlarge the government’s functions to include adjusting consumption and investment both to avoid “the destruction of existing economic forms in their entirety” and to promote the “successful functioning of individual initiative.” The economic system he envisioned was therefore a democratic system controlled where necessary for the public good.