John Maynard Keynes (1883 -1946) studied Politics and Economics at Cambridge university in England. He rose to prominence prior to World War 1 and his major contributions to economics arose out of his analysis of the economic depression of the 1930’s. He published The General Theory of Employment, Interest and Money in 1936.
Keynes ideas were focussed on macroeconomic theory. Macroeconomics looks at the economy as a whole. Macroeconomic policies allow the government the ability to stabilize markets through changes in government spending (fiscal policy) and the money supply and interest rates (monetary policy) in an economy. For example if the economy is sluggish, the government may decide to stimulate the economy by creating jobs through government projects and infrastructure improvement (fiscal) as well as increase the more supply by lowering interest rates as well as buying government bonds (monetary). Conversely if the economy is growing too fast and causing high inflation, it may reduce government spending and increase interest rates and sell bonds to reduce the money supply.
Keynes was not against Capitalism. He saw and appreciated the benefits of Capitalism. He wanted above all to ensure that these benefits be shared as widely as possible. His ideas gained popularity after the Great Depression. Keynesian intervention is meant to ameliorate the human impact of unhealthy inflation and unemployment during the economic cycle.
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