Which economic philosophy advocates for government intervention in the economy?

Keynesian economics is an economic philosophy developed by economist John Maynard Keynes during the Great Depression. It advocates for active government intervention in the economy to manage economic fluctuations and promote full employment. According to this philosophy, the government should use fiscal policy—such as adjusting spending and tax policies—to stimulate demand during economic downturns. This approach contrasts with more laissez-faire attitudes that promote minimal governmental involvement in economic affairs. Keynesian economics suggests that during recessions, increased government spending can help to boost economic activity and reduce unemployment, making it particularly influential in shaping modern economic policies during times of economic crisis.

Capitalism generally promotes private ownership and free markets with less government intervention, while democracy refers to a political system rather than an economic philosophy. Laissez-faire policy specifies non-intervention by the government in the economy, directly opposing the principles of Keynesian economics.