Page 25 - Azerbaijan State University of Economics

THE JOURNAL OF ECONOMIC SCIENCES: THEORY AND PRACTICE, V.73, # 2, 2016, pp. 21-26

hand) and without unemployment and inflation occurring. New Keynesian
economists reject this assumption and argue that this balance can not improve
market alone, but that the state interventions and regulations must politically ensure
purchasing power, effective demand, and full employment. If not, inflation fuelled
inflation parallel with declining purchasing power in terms of unemployment, social
dumping in employment and poverty. There arises a negative downward spiral. The
consequence will be a socioeconomic crisis as we see it in Europe today, with
declining investment, high unemployment and social deprivation in many countries.
A theory and policy alternative to neoliberalism theoretical foundation has
social democracy today. Option located in the state focused neo-Keynesian
macroeconomic approach, which now wins the vote in opposition politics in Anglo-
American countries and Mediterranean countries in crisis. In Norway, social
democracy in opposition - neo-Keynesian policy should fit their ideology and
rhetoric towards the election in 2017.
But it turns out not easy to refute the neoliberal orthodoxy, though we thus see
such trends in countries such as Canada. When the feudal system with the monarchy,
the church and nobility were forced to their knees in Europe 250 years ago, there
appeared an economic and political ideology directed against all monopoly power,
also with a rejection of strong state power. Market Liberalism called this ideology
and built on classical economic theory from the 17th and 18th centuries. Just like
rabbits conquered every corner of the Australian continent when it was introduced
there, gnawed neoliberalism down and soon spread to all the earth's cardinal points.
Market liberalism "gnawed" also in Norway. Today's blue government is
confident in his belief in neoliberalism, and leading active and unilateral policies
deregulated free markets and the marketization of public services [Veggeland, N.
2015]. The tightening welfare state and provide tax cuts to the wealthiest, contrary to
the Keynesian principle of social and economic cohesion as a justification for
including the preservation of purchasing power and effective demand. Also, the
social democratic coalition government policy between 2005 - 2013 was based on
(light) neoliberalism. - In the new Keynesian economic theory and policy, the
Norwegian Social Democracy retrieves a foundation as it did in classical
Keynesianism in the decades after World War II.
Norway is lucky and does not Keynesian deficits in order to create effective
demand and new jobs. Norway has oil fund, the Government Pension Fund - abroad
with a market capitalization of 7,500 billion, which invests in 9,000 different
companies in 75 countries worldwide. Today government money from the oil fund
to partly unnecessary privatization of reception and settlement costing billions. It
built up refugee profiteers of a Hero AS, which monopolize all operations from

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