How to refute demand side Keynesian economics?

[SeanEdwards]

Fresh tomatoes for $3.49 / lb in my local supermaket.

 

[amakris]

Broken window fallacy.

Agreed. In this parable, society as a whole is less a window. In your grocery store example, society is up the benefit received by the poor but *loses*:
1) the gains commerce or labor that the poor would participate in to have earned the capital on their own
2) the marginal gains from investing in something other than groceries by the rightful owner.
3) the marginal gains from commerce or labor by other parties interacting with the rightful owner of the initial capital
4) the deadweight loss of collecting and redistributing capital
5) the opportunity cost of the grocery lobby's efforts that were spent lobbying the government to give the money to the poor to help the grocers
6) the gains from labor and commerce that would have occurred but won't due to the disincentive to work that is created for others in society that observe this legal plunder
7) justice for crimes that are pushed underground and committed against businesses that circumvent tax law in response to the government's policy

I'm sure there are more costs. These just a few at the top of my mind and not an extensive list.

The point is that there are oftentimes subtle and numerous costs that don't get enough attention because they are more difficult to think about or more abstract.

 

[Richandler]

The example is laughable. So the poor person gets free money right. Investing 10,000 into the grocery store will allow them to hire the poor person. Where as if your money is given to the poor person for no reason, you are doing your job for a person who sits around and does nothing. By this logic you should be able to quit your job, become poor and get money from rich people for nothing.

 

[danastos]

Okay, what happens if there is a whole big economic depression... and there's no more investment, like in the 1930's? Keynesian's would advocate government spending to prime the economy.

Well you make sure you dont have a central bank that can cause a depression to begin with.
They cause it by increasing the money supply then decreasing it.

 

[Brutus]

Bah,

"He also mentions that the free market tends to be supply side..., which increases the divide between the rich and the poor."

A person's demand for other's goods and services is his own supply of goods and services. People who are very talented at meeting the needs of others will get very rich. This is good. It takes centralized capital to make factories, invent MRI machines, etc. The poor benefit from these things even without owning them because they 1) are hired to operate and maintain them 2) get to buy cheap goods which would be unavailable at any cost without them 3) have not had to risk any of their own wealth to get them.

It sounds like your friend is consumed with envy.