ABSTRACT
The economic foundations of the stakeholding approach can be found in a variant of the competitive market model known as 'Rhenish' capitalism. The doctrine of free enterprise and the analysis of unfettered market dynamics that underpins it have played an important part in conventional economic thinking over the last two centuries. Keynesian argues that natural business cycle behaviour results from perfectly natural individual responses to unexpected shocks experienced by the economy due to sudden changes in aggregate demand. Keynes revealed the in-built tendency for markets to self-destruct in a particular set of circumstances and postulated that a free market economy with no government intervention would eventually and inevitably generate a situation in which prolonged and significant unemployment would become the natural state. Despite the dominance of the Keynesian approach in the late 1950s and 1960s, market economists never fully accepted the defeat of the orthodox view.
