Analysis of Economists' Ideas in Buchholz Essay

Analysis of "New Ideas from Dead Economists" Essay
Todd G. Buchholz defines economics as the study of choice. Economists examine the consequences
of the choices people make. The creation and evolution of economics over centuries came from the
ideas of four economists: Adam Smith, Thomas Malthus, David Ricardo, John Stuart Mill, Karl
Marx, Alfred Marshall and John Maynard Keynes. These well respected economists help the theory
of economics grow and become what it is today. Economics started with the ideas of Adam Smith.
He is credited as the first true economist. He had never taught nor took a class in economics. In his
book The Wealth of Nations Smith alludes to the idea that self interest motives allows a nation to
prosper entirely. People do something in order to gain something. ... Show more content on
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Smith advocated for free trade for a country. A country should export more than it imports. This
stimulates the growth of the economy. Adam Smith was an optimist who sought the best for his
country.
On the other hand, Thomas Malthus had little hope for the future. He believed that the world's
population will increase faster than the production of food. The human race, he believed, would
starve and there would be periods of chaos. Malthus said that the population increases at an
exponential rate, nearly doubling amount. There is no way food growth would be able to catch up
with population growth. Malthus' solution was "War, Famine, and Plagues". He believed that was
the only way to decrease population and hopefully salvage the human race. These events would
increase death rates liberating the world of disaster. Malthus tried to persuade lower classes form
creating children and from marriage. At that time the lower classes were considered to be given
higher wages, which would increase the makings of children and marriages. Thomas Malthus
pleaded with everyone to make a change in order to decrease population. David Ricardo agreed with
both the ideas of Malthus and Smith. Ricardo strongly argued for free trade. The idea of
"cooperative advantage" emerged. The simply says that a nation should produce only the goods it
best produces, rather than it producing every necessity. Then the nation will be able to buy the good
that it needs for cheaper and
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The Great Depression Of The 1930 ' S
John Maynard Keynes was the most influential economist of the 1900's and many of his ideas were
adopted by Franklin D. Roosevelt to combat the Great Depression of the 1930's. With the passing of
the economic crisis in 2008, countless articles have been published supporting Keynes and his
economic thought. He originally investigated the origins of the Great Depression and remodeled the
field of economics with a basic conclusion: economies recover from downturns by spending money.
Keynes theorized that during financial downfalls, the public becomes frightened and decreases
spending, this leads to more layoffs, which in turn leads to an even greater decline in consumption,
creating a vicious cycle. Many of Keynes' theories in The General Theory of Employment, Interest,
and Money (1936) are accurate, but are often overlooked in the legislative sector, due to political
agendas triumphing over logic. "When the capital development of a country becomes a by–product
of the activities of a casino, the job is likely to be ill–done. The measure of success attained by Wall
Street . . . cannot be claimed as one of the outstanding triumphs of laissez–faire capitalism." I will
be addressing Keynes' concept of business cycles in The General Theory of Employment, Interest,
and Money–mainly focusing on the 2008 financial crisis–and analyze whether or not these
arguments are more or less accurate than his other conclusions. I strongly believe that many of his
ideas are true as he

Free Market In Von Hayek And John Maynard Keynes
Friedrich Von Hayek and John Maynard Keynes were colleagues and economists with opposing
views. Keynes saw the faults of free market in the postwar era and really thought that government
instruction of the economy, all those faults could be fixed. Hayek thought that free market was the
answer. In other words Hayek favored "free market" and Keynes favored "planned economy."
Commanding heights came from Lenin's speech, and those who disapproved of his changes about
the Marxist economics, that "as long as the government owns the commanding heights of economy
it is okay to let people have a little bit of their things." (Lenin). Keynes helped the connected
governments defend from freedom. Hayek thought that with the government interfering in the

Economic Theories and Policies After World War II
Throughout the United States' history, especially after World War I, there have been many
competing economic theories about government policy. The architects of the most referenced
policies tend to be John Maynard Keynes, Friedrich Hayek of the Austrian School of economic
thought and Ayn Rand (though it can be argued Rand's ideas are more philosophy than economic
theory.) These three theories seem to be always in the forefront of any economic discussions taking
place in the United States. Ayn Rand's main belief in the economic system is to have a completely
unregulated laissez–faire economy. She espoused the need for government to leave the people alone,
and let them try to fulfill their own desires. She argues that the government are "looters" that take
with threat of force the earnings of the people and then redistributes the ill–gotten capital to
"moochers", or people who depend on the government for some sort of assistance (Seabrook, NPR).
She contends that government interference will cause the producers or capitalist to pack up and
leave everyone else behind. She demonstrates her argument through her most well–known novels,
"The Fountainhead" and "Atlas Shrugged"(Ayn Rand, Wikipedia). Ayn Rand's theory tends to mesh
well with libertarian and conservative ideals, and has found a home with Congressman Rand Paul,
Congressman Steve King, and many Tea Party idealists (Seabrook, NPR). Friedrich Hayek's theories
are based more on the macro level than Ayn Rand's. Hayek

John Maynard Keyne Research Paper
Hello Professor & Classmates, John Maynard Keyne born on June 5, 1883 was born into a well–
educated family. His father was an economist as well as philosopher and his mother was the town's
first female mayor. His education was at Eton and Cambridge University majoring in mathematics.
In addition, as the article states, "Following the outbreak of World War One, Keynes joined the
treasury, and in the wake of the Versailles peace treaty, he published "The Economic Consequences
of the Peace" in which he criticized the exorbitant war reparation demanded from a defeated
Germany and prophetically predicted that it would foster a desire for revenge among Germans. This
best–selling book made him world famous." (BBC, 2014, P.1) Moreover, he was also

The Relationship Between Keynes And Social Democracy Essay
Keynesianism is an economic theory believed to have been developed and propagated by John
Maynard Keynes, who was a British economist. Keynes postulated that economic growth and
reduced unemployment can be aided via the executive`s fiscal policies inclusive of spending to
reinvigorate the economy, tinkering with interest rates, and appointment of confirmed statutes on
market economics. This theory was developed in the 1930s as a way of better understanding the
Great Depression. Keynes championed for expanded government expenditures and reduced taxes to
energize demand in order to extricate the global economy out of the Depression. Since its inception
Keynesianism was connected to social democratic big–government policies. Scholars like (Barr,
2004) have realised that the relationship between Keynes and social democracy is more composite
than believed. Keynes can be referred to as the draughtsman of the main elements of social
democracy policy especially in regards to full employment but according to (Skidelsky 2010), he
did not believe in the enlargement of the welfare state and public ownership. Neoliberalism is based
on an economic and social policy that is driven by the market and the reduction of the size of the
government and giving more authority to local and state governments. Neoliberalism advocates for
the eradication of regulations imposed on the private sector by the government, including the
privatisation of services provided by the government which include

Adam Smith And John Maynard Keynes Summary
Modern macroeconomic theory can be traced back to the ideas of both Adam Smith, (1723–1790)
and John Maynard Keynes (1883–1946). Smith, a Scottish philosopher and economist, is most
famous for laying out the fundamental principles of economic theory in his book An Inquiry into the
Nature and Causes of the Wealth of Nations. In his renowned work, Smith developed the framework
of a classical free–market economy where consumable goods can be bought and sold with no
government restriction. Smith drew from the previous but scattered research of others to found what
was to become known as the field of economics. Following in Smith's footsteps, John Maynard
Keynes, a British economist, fundamentally changed the ideas and policies of modern economics.
Keynes transformed economics from an analytical tool into a policy oriented–system. John Maynard
Keynes built upon the works of Adam Smith to create an economic system that is still in place
today. Their contribution to the Industrial Revolution was not one of business or product, but rather
one of idea and policy; their product is "economics."
Adam Smith was born on June 5, 1723, in Kirkcaldy, Scotland. At the age of 14, Smith attended the
University of Glasgow where the lectures of Francis Hutcheson significantly impacted him. Three
years later, Smith attended Balliol College in Oxford. Smith attended Balliol for seven years before
receiving a bachelor of arts degree. Upon Graduation, Smith returned to Kirkcaldy for a few years

Critical Analysis Of Adam Smith, Karl Marx, And John...
The three business analysts profiled in this article – Adam Smith, Karl Marx, and John Maynard
Keynes – contributed generously to the advancement of financial aspects as a science. By and by,
contemplations of generation, dissemination, decision, shortage, and exchange utilizes far originate
before these men, to the soonest days of mankind. Ages before there was financial idea, there was
monetary conduct. Adam Smith, a Scot and a savant who lived from 1723 to 1790, is viewed as the
originator of current financial aspects. In Smith's chance, logic was a sweeping investigation of
human culture notwithstanding an investigation into the nature and importance of presence.
Profound examination of the universe of business undertakings drove Smith to the conclusion that
by and large the people in the public arena, each acting in his or her own self–intrigue, figure out
how to deliver and buy the products and enterprises that they as a general public require. He called
the component by which this self–control happens "the undetectable hand," in his weighty book,
The Wealth of Nations, distributed in 1776, the time of America's Declaration of Independence.
While Smith couldn't demonstrate the presence of this "hand" (it was, all things considered,
imperceptible) he exhibited many examples of its working in the public arena. Basically, the
butcher, the dough puncher, and the candle creator exclusively continue on ahead. Every deliver the
measure of meat, bread, and candles he judges

How Did John Maynard Keynes Influence The Modern World
John Maynard Keynes, is considered one of the heavy weights when it comes to modern economic
theory. In today's world there are two major schools of thought when it comes to economics,
Classical and Keynesians. This shows you the impact that he had in the world of economics. His
studies and writings have shaped our modern world.
Keynes got involved into economics because of the time period in which he lived in. He was seeing
the effects of the great depression in his home of Great Britain. The measures taken to stop the great
depression all fell within the school of classical economics. "Two events spurred Keynes'
development of his new model. The first was the inability of the British economy to overcome the
Great Depression.

John Maynard Keynes And The Classical Model Essay
Part One John Maynard Keynes is referred to as one of the most well known economists of his time.
Not only was he able to come up with a solution to essentially try to move the economy out of
recession and stop booms and busts, but his theory is still being used in todays day and age 70 years
later. One big question that has been asked repeatedly about Keynes theory is why did he not believe
in self–adjustment of the economy. Keynes rejected the idea that market economies would
automatically move towards full employment. He claimed to have found many flaws in the classical
model as a whole (Davidson). Overall Keynes rejected the classical models claim that markets self–
adjust to solve economic problem because his insight was the opposite of the classical model. He
was convinced that sometimes things don't sort themselves out. The economy would actually
continue to go into a downward spiral and the usual dynamic of supply and demand would
essentially break down. As far as policy prescriptions for a recession, Keynes stated that, "If all else
fails, the government can spend the money" (Davidson). Not only did he think this, he also was
convinced that they shouldn't raise taxes or try to balance the budget. If either of these things were
to be done, it would essentially cancel out any positive effect from spending. Keynes seemed to
have felt very strongly that his theory was bound to work, as well as the people who followed him
and his theories closely. However, economists

The Economic Life Of John Maynard Keynes
The Economic Life of John Maynard Keynes
Morgan State University
Julius Sesay
Social Science 101.002
Prof. J Mohan
October 4, 2016
Abstract
According to my studies, I'm going to talk about John Maynard Keynes and his economic life. He is
one of the most recognizable and influential economist of the 20th Century. For my research, I was
summarizing about the life–term history of the world's brilliant economist, who made economics
possible. The paper will be about how his economic life change the world and how is he well–
focused on his learnings from his teachers and professors. The way he was well–known as a wealth
expert on saving his money. The important facts about his creation on macroeconomics and what
Keynesian economics is all about. The whole aspect of Economics and the Holocaust is going to be
about what the true legacy of John Maynard Keynes. Even if I'm not 100 percent correct, as Keynes
would always say, "It is better to be roughly right than precisely wrong."
Keywords: economics, Holocaust, wealth, Jews, Germans, Keynesian, Maus, goals, predecessors,
familes, and bonds; etc.
John Maynard Keynes was a great inspiration knowledge profession because at critical times which
was the 1930's, when with the on–stock of the Market Crash, "The Great Depression", he saw very
little correspondence between orthodox theory and the challenges that society faced. He was born on
June 3rd, 1883 in Cambridge, England. His Father,

Essay on John Maynard Keynes Versus Friederich A. Hayek
Two major economic thinkers of the of the early twentieth century, John Maynard Keynes and
Friedrich A. Hayek, hold very different economic viewpoints. Keynes is among the most famous
economic philosophers. Keynes, who's theories gained a reputation during the Great Depression in
the 1930s, focused mainly on an economy's bust. It is where the economy declines and finally
bottoms–out, that Keynesian economics believes the answers lie for its eventual recovery. On the
other hand, Hayek believed that in studying the boom answers would be provided to lead the
economy out of the bust that was sure to follow. Hayek backed the Austrian school of economics.
John Maynard Keynes fostered a school of thought that came to be known after him, ... Show more
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This is almost the textbook definition of money illusion, which of course classical economics
assumes people are not fooled by. Still, Keynes ideas gained popularity and President Franklin D.
Roosevelt's New Deal was directly influenced by the Keynesian point of view. Keynes held that the
way out of a depression was to increase an economy's aggregate demand(AD). Roosevelt's New
Deal contained huge federal expenditures and government jobs programs, all designed to boost AD.
These programs, including direct relief, were paid by taxpayers dollars and the tax rates rose
dramatically multiple times during the Great Depression. F. A. Hayek, the "other" economic thinker
of the twentieth century, believed that the way to stabilize a broken economy was to find solution
from the boom that preceded the current bust. The Hayek–supported Austrian theory sought a
connection among business cycles, capital theory, and monetary theory. Hayek believed an economy
started going downhill when people did not coordinate their actions. The spontaneous order of the
free market and price system usually does a fantastic job of coordinating people's actions. Hayek
said that the credit market becomes distorted when the money supply increases, interest rates go
down, and the credit becomes artificially cheap (Friedrich). This causes an artificially high rate of
investment and malinvestment." [Malinvestment is ]...too much investment in long–term projects
relative to short–term ones, and the

The Economists ' Economic Theory Essay
Jovanny Ibarra
Mr.Nasr
Economics
2 December 2016 The Economists What is the best way to earn money. To entrust on someone else
like the government or yourself? Two economists, John Maynard Keynes and Friedrich von Hayek
had two contrasting views on how the government should handle the market. Keynes believe on the
government controlling the market while Hayek wanted the government to stay away from it.
Hayek's economic theory is right because it focuses on us as citizens to have responsibilities towards
our money. To be utilized fully in a decentralized market system with free competition and pricing.
(1) Then to be able to save money rather keeping money being spent from Keynes' belief. First,
Friedrich Von Hayek was an economist born in Austria. His work was involved with business
cycles, the term of periods of growth and decay. Capital theory and monetary theory.(2) He believed
that if the government were to stay away from the market, then the business cycles would be
removed or at least won't be having recession. Then there also the problems governments had with
the economy such as depressions. If the citizens would had authority towards it, then the money
would've been spent in different things such as today. U.S spending money on the military rather
than education. Hayek accused Keynes of insufficient attention to the nature of capital in
production. (3) Meaning the labor that is used for making business. How these investments are
being used for keep up with a

Keynesian Theory And Aggregate Demand
THE KEYNESIAN THEORY AND AGGREGATE DEMAND
By Riley Lennon
The great depression in the 1930's devastated the economic market, but also produced two of the
greatest economists to ever live, John Maynard Keynes and Friedrich August Hayek. Why did the
economist John Maynard Keynes advocate for the government to have an active role with
influencing the level of economic activity. This is because Keynes believes that this will stimulate
the economic activity and bring the country out of economic drought. Keynes' theory leads to the
government influencing the level of aggregate demand, and how it effects inflation and output.
Although Keynes was known as the greatest economist of this era, there was another economist by
the name of Friedrich Hayek, whose beliefs were completely opposite to those of Keynes. Hayek
wanted no government intervention and for the markets to control themselves.
The Keynesian theory was developed by John Maynard Keynes in attempt to understand the great
depression. Keynes Wanted lower taxes and higher government spending witch both of these
methods would stimulate economic activity and demand in the economic cycle in an attempt to
heave the global economy out of financial depression. This economic theory was only created after
the economic boom in the 1920's. During the 1920's every economist thought that it was going to
continue forever, this boom was caused by several factors such as lower tax rates which would
encourage people to

Library Of Economics And Liberty: John Maynard Keynes
According to Library of Economics and Liberty, "So influential was John Maynard Keynes in the
middle third of the twentieth century that an entire school of modern thought bears his name. Many
of his ideas were revolutionary; almost all were controversial. Keynesian Economics serves as a sort
of yardstick that can define virtually all economists who came after him." (Library of Economics
and Liberty, n.d.).
John Maynard Keynes was born in Cambridge, England on June 5, 1883, into a moderately
prosperous academic family. His father, John Neville Keynes was an economist, philosopher, and
later an academic administrator at the King's College in Cambridge. His mother was a philosopher,
one of the first female graduates at the same university ... Show more content on Helpwriting.net ...
During these wars, Keynes impacted the role in negotiations shaping the post–war international
economic order, and in 1944, led the British delegation to the Bretton Woods conference in the U.S.
planning of the World Bank and the International Monetary Fund. Best known for his proposal that
government should borrow and spend money to boost economic activity when national economies
suffer a downturn and the results from the economic growth should repay the

Critique Of John Maynard Keynes's Theory Of Demand For Money
CRITIQUE OF KEYNES THEORY OF DEMAND FOR MONEY.
Demand is the amount of goods and services that consumers are willing and able to buy at a
particular price and place. It is the desire to purchase goods and services. Money is anything that is
generally accepted as a means of payment for goods and services in a particular place. Several
theories have been derived concerning the demand for money. Some of the economists that have
postulated theories concerning demand for money includes: Irving Fisher, the Cambridge cash
balance approach (put forward by Pigou and Marshall), Keynes theory, Milton Friedman's theory
and so on. But this deals with the critique on the theory of demand for money by Keynes. Before
one knows the critique to a theory, the theory needs to be understood itself. John Maynard Keynes
wrote a book titled, The General Theory of employment, interest and money and here he gave in
detail theory of demand for money. The theory postulated by Keynes is basically an extended
version of the Cambridge Cash Balance approach. According to him, the demand for money is not
the actual money balances held by people but what amount of money balances they want to hold. He
believed people were not suffering from money illusion. Keynes said the demand for money
depends on three motives. These are: transactions, precautionary and speculative motives.
... Show more content on Helpwriting.net ...
It takes a while before asset or stock can be converted into liquid cash. This makes people hold
liquid cash so that they are relieved from that stress and also ensuring that money is readily
available.
Precautionary Motive: This is the demand for money for unforeseen situations and events. An
example of an unforeseen situation is an accident or an opportunity to invest in financial assets.
Some people hold money to meet up with emergencies that may occur while carrying out certain

John Maynard Keynes Essay examples
John Maynard Keynes
John Maynard Keynes was born in 1883 which means he lived around the same time period as the
seven creative individuals which Howard Gardner chose to focus on in his book Creating Minds. I
chose to look at the life of Maynard Keynes because it is such a fascinating and diverse one. While
entailing some of the same features found in the lives of those Gardner focused on, Maynard's life
includes a lot of differences and adds some interesting twists as well. It can only be beneficial and
interesting to see how this creative individual fits into Gardner's model. Keynes was one of the most
influential economists of the twentieth century, and one of only a handful of social scientists who,
through their writings, have ... Show more content on Helpwriting.net ...
Through her willingness to depart from the traditional, she was one of the earliest influence on
Keynes. She broke out of the traditional role placed on women during that period, thereby setting an
example for Maynard who was very close to his mother.
Now we must take into the account the Keynes' colorful and distinguished ancestry. The early
Keynes' were people of high standing whose influence can still be seen in the names of places in
England such as Horstead–Keynes. Both the maternal and paternal side of Keynes ancestors were
non conformists who remained steadfast Roman Catholics during a time of religious persecution.
Maynard studied his ancestry extensivly and was very proud of it. As a student he drew up a family
tree, and in later years wrote an introduction to one of his books based on it.
The Pride of ancestry has in great measure passed away, for the fast rising wave of democracy day
by day obliterates the old land marks and traditions that were once held dear. Some, however, I trust
there are, to whom the great names of the past remain in living memory, who shape their course in
the world under a deep sense of responsibility of bearing them; and fill their appointed position and
do their appointed work commanded by the gaze of all their ancestors. (Hession 363)
Some speculate that this was an introduction to an autobiography Keynes was writing at the time of
his death. This passage shows how noteworthy his ancestry was to Maynard and how it provided

Milton Friedman And Milton Keynes
There have been different views from John Maynard Keynes, Milton Friedman and central banks
when it comes to inflation. However, what both John Maynard Keynes and Milton Friedman can
agree on is the fact that inflation is seen to be a great evil. Moreover, the central banks interpret
inflation as moderate being the fact that some inflation is seen to them as tolerable. Historically,
Friedman and Keynes have had disputes on a better system for the control of inflation. For instance,
Friedman put forward the monetary policy for the government to use in order to keep interest rates
to stabilize an economy, whereas Keynes believed the government should be in control of inflation
by the amount of spending produced between goods and services. Central banks have viewed both
reasoning's to Keynes and Friedman's theories and decided the monetary policy is the best route for
an economy to take. A great example of this can be illustrated in Canada with inflation rates only
being kept between 1 and 3 percent. The other factors that central banks might have to deal with in
other countries would be the change in political views and how much power the government has
over central banks to control cash flow throughout their respective countries. The central banks must
also avoid dealing with poor decisions made by government leaders which could affect the economy
tremendously. In many underdeveloped countries, there have been a lot struggles even until present
day where government leaders

Essay on Economic Philosophies
Economic Philosophies
How much should we let the government interfere with our economy? Do we trust the government
to take on the enormous responsibility of caring for our economy? Our economy is a precious thing
and we must take great care of it, for it can make us powerful and prosperous or it could be the
demise of our nation. Three economists – Karl Marx, Adam Smith, and John Maynard Keynes – all
had opposing views on how much government interference should be present upon the economy.
Karl Marx believes that the government should control the economy. This means that every aspect
of the economy is controlled directly by the government. Marx says that if the government plays no
part in the economy, then the economy will ... Show more content on Helpwriting.net ...
Adam's idea of society is that each person can do whatever they want to advance themselves and
each person can pursue happiness in whatever fashion they believe to be the best. Technology
creates new and better ways to do things which allows society to grow and become more advanced.
Smith says that new technology creates new jobs by expanding the limits of manufacturing and
science. With new technology people can do things they never could do or even imagine before.
Adam Smith says that the government should stay out of the economy all together. The economy is
like a boat – it goes up and down. Smith believed that the economy would fix itself; therefore, the
government shouldn't interfere with the economy. He said one has to have "faith" because the
economy will fix itself. Things may not be going great right now, but the economy will rise on it's
own. The result is graphically represented as a vertical aggregate supply curve.
John Maynard Keynes believed that it was necessary for the government to intervene in
the economy. He felt the government played an essential part in maintaining the economy and
keep it from going into a depression. The Keynesian view sees the causes of unemployment and
inflation as the failure of certain fundamental economic decisions. Also, product prices and

John Maynard Keynes 's Economic Theory And Policy After...
At the start of the Great Depression, people in all affected countries believed that a free market –
based on supply and demand with no government control – would deliver full employment. John
Maynard Keynes came up with a theory as a counterargument: that aggregate demand is the single
most powerful force in any economy. Keynes explains that free markets are not able to balance
themselves out enough to lead to the full employment everyone was waiting for. The 1930s gave rise
to Keynes' ideas, especially after the publication of his revolutionary book The General Theory of
Employment, Interest, and Money in 1936. "Keynesian economics dominated economic theory and
policy after World War II until the 1970s," when the issue of stagflation introduced itself to a
disappointingly unprepared Keynes. (CITE JAHAN P.54)
Keynes and His Theory
John Maynard Keynes was a well–known British economist, and is credited with the establishment
of modern macroeconomics. One must remember that the concept of macroeconomics already
existed, but Keynes' addition includes a "systematic approach to aggregate economic phenomena."
(CITE SNOWDON/VANE P 13) While The General Theory of Employment, Interest, and Money
might be his most famous work, he also had two other important works released before it. The first
was The Economic Consequences of the Peace in 1919, arguing that the Versailles Treaty would
lead to another war in Europe. The second, released just six years before General Theory, was A

John Maynard Keynes
Alyssa Savinovich Social Inequality
John Maynard Keynes Social Theory
Although much of his ideas were often misunderstood throughout his life, Keynes offered bright
new insights into the nature and origin of financial theories. In his most well known writings, The
General Theory of Employment, Interest, and Money, which was published in 1936, Keynes worked
to break down the prior ideas of traditional economics and point out its inadequacies, which became
obvious during the downturn of the economy. He felt a new approach was needed, and through his
work in The General Theory, he sought to bring this transformed stance to light and make sense of
the economic crisis that surrounded him. Keynes entire social ... Show more content on
Helpwriting.net ...
This liquidity preference usually comes in the form of cash, or other quick and readily available
forms, which do not present much effort in the retrieving of funds. People with this liquidity
preference simply like to have the security of having their money more quickly available to them
and within their
control at all times. These forms of liquid money bring the investor a sense of security and control
over their assets something that will comfort them in times of uncertainty. According to Keynes,
there are two types of moneys of account, first, there s normal money, or money proper, then there is
bank money. These are just two different forms the amount of exchange value can take in the form
of the dollar. Whenever ones actions with money projects their expectations into the future there is
always a higher level of uncertainty, with loaning having a considerable level of uncertainty. With
this uncertainty, the expectations of the investor, or that of effective demand, may often require
some form of disquietude in order to feel more comfortable and safe dealing in such uncertain
terms. This disquietude can often be offered in the form of the rate of the rate of interest on ones
investments. It is the amount the interest that will greatly determine whether or not one will be
willing to give the loan, for the rate of interest works to deter ones propensity to hoard. The higher
the rate of interest, the more likely an individual would be to let go of some of

The Theory Of Keynesian Economics
Introduction
During the Great Depression in the 1930's "classical theory had difficulty in explaining why the
depression kept getting worse" (Cheung, n.d., para. 1). Many economists have attempted to develop
theories that help to explain changing circumstances and why things kept getting worse. John
Maynard Keynes, a British economist also known as the founder of macroeconomics, saw this as an
opportunity and began to develop alternative ideas. His alternative ideas led to the idea of Keynesian
economics.
What is Keynesian Economics? Keynesian economics was used to manage the economy for roughly
forty years until around 1970. "The main plank of Keynes's theory, which has come to bear his
name, is the asser–tion that aggregate ... Show more content on Helpwriting.net ...
3). In order for there to be full employment or lower unemployment
rates the demand of goods needed to remain constant. In order for demand to increase it had to come
from the economy's output of goods and services. "An economy's output of goods and services is the
sum of four components: consumption, investment, government purchases, and net exports (the
difference between what a country sells to and buys from foreign countries)" (Jahan et al., 2014,
para. 4). If savings was more than that of investments, there would be inflation. On the other hand,
Keynes stated that if more went into investments than savings there would be a recession in the
economy. This would mean that consumers would spend less, causing businesses to invest less in the
market. Other well–known economist, such as Adam Smith who felt that government should play no
role in the market, Keynes felt that state intervention was the solution to this problem. According to
Keynes, state intervention was necessary to "moderate the booms and busts in eco–nomic activity,
otherwise known as the business cycle" (Jahan et al., 2014, para. 4). Keynesian felt that state
intervention would promote full employment and price stability and more specifi–cally,
"governments should borrow money and boost demand by pushing the money into the economy.
Once the economy recovered, and was expanding again, governments should pay back the loans"
(John

A Discussion Of Keynesian Economics
One type of economic belief is called Keynesian economics. This belief or theory is in favor of total
spending in the economy. It also agrees with total spending output and inflation, prices of goods
rising consistently. This form of economics was developed in the 1930's by a economist, John
Maynard Keynes, in hopes of gaining a better understanding of the Great Depression. Keynes was
for more government spending and lower taxes that would possibly pull the U.S. out of the
depression. Basically, this gave hope that America's government could get out of its low production
time by stabilizing goods. Before the idea of Keynesian economics, people believed that the
fluctuations in the output of manufactures would handle itself. The flaw in this ... Show more
content on Helpwriting.net ...
Before the depression when economics was at a low they would soon rise again in fluctuation. The
depression put an end t this because there was such a shortage of jobs. This made Keynes start to
think about how to help people and handle economy in a real crisis. The thought that life as people
knew it was never going to return causing a "boom and bust" system. Keynes' suggestion about this
was that when the government was going good they should raise taxes and spend less money, and
when they were in a bust they should lower taxes to retain money to the people. Keynes did not just
expect the government to cycle money, but for the people to as well. He thought that unless you
were putting money back for the future that you should keep your money cycling in the economic
system. One of the biggest factors that had a part in Keynes' style of economics was something
called multiplier effect (which is essentially banks making money from lending money). He was
strong in the belief that if the government spent and invested, then they would make more money. If
people were willing to spend their money as well then, the PD would eventually begin to

Economics Essay
Economics is an ever–changing field of study. Within that area of interest, there are many people
who have influenced the world with their individual economic point of view. Some of those people
have made a fundamental impact upon not only the United States of America, but also upon the
world. Adam Smith, David Ricardo, John Maynard Keynes, Friedrich Von Hayek, Milton Friedman,
and Fengbo Zhang are six men who have accomplished just that. Their opinions, actions, and words
have forever changed the world of economics.
Adam Smith
The "father of economics" was born in Scotland. His birth occurred during the year of 1723. Adam
Smith's renowned book The Wealth of Nations examined the idea of capital and money, the progress
of industry, ... Show more content on Helpwriting.net ...
He felt that, except for certain extreme instances, the government should not interfere with the
market. Adam Smith died in 1790, but his economic ideas have lived on. Adam Smith and his
pioneering ideas and opinions are the basis on which economics has been built upon.
David Ricardo
David Ricardo was born in 1772 and was submerged into politics and government at a very young
age. After he finished his schooling, Ricardo's father placed him at the London Stock Exchange,
where David had a full time job at the early age of fourteen. In 1819, by the advice of James Mill, a
close friend, Ricardo joined the British Parliament. This opportunity, introduced Ricardo to the
world of economics.
He first became interested in economics due to Adam Smith's 1776 book The Wealth of Nations
when he was approximately twenty–seven years old. Thanks to his friend James Mill, Ricardo began
recording his own economic ideas onto paper. Following in Smith's footsteps, he was a classical
economist, having a very strong idea that markets can regulate themselves.
In 1815, Ricardo wrote the Low Price of Corn on the Profits of Stock Essay. In this Essay, David
Ricardo discussed his hypothesis that as a company hires more labor with a fixed amount of land
and capital, eventually there will be a point where hiring more workers will be less efficient. This is
theory later became known as the law of diminishing marginal returns. The law of diminishing
marginal returns can be

Compare And Contrast The Ideas Of Adam Smith And John...
NAME: Amritpal Singh (7969389)
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True or False
Please answer the following questions by indicating TRUE or FALSE. 1 mark each.
1. Social Sciences use various types of research depending on the type of social science and the
nature of the subject matter. ☒TRUE or ☐FALSE
2. Social Sciences consist of many different disciplines and those disciplines can be in conflict
(disagreement) ... Show more content on Helpwriting.net ...
1. Compare and contrast the ideas of Adam Smith and John Maynard Keynes regarding
capitalism/economic systems. (5 marks)
Ans. Adam Smith trusted that in Laissez Faire framework government does not meddle in the
activity of the economy and Smith said that economy will accomplish the best useful for the best
number however this is just conceivable if everybody takes after self – intrigue. Where Keynes'
feelings for private enterprise were comparable as Adam Smith and Keynes said that legislature
need to intercede with a specific end goal to leave the monetary droops.
2. Explain what is meant by the Bourgeoisie and Proletariat. How does this relate to inequality?
Explain. (5 marks)
Ans. The methods for Bourgeoisie is, the individuals who possessed the methods for generation like
proprietors of manufacturing plants while low class, who worked for the proprietors of creation like
as specialists on shop floor. Manager controlled to low class and they were misused in light of the
fact that they needed to pitch their work to get a wage this is a case of

John Maynard Keynes Was An Economist Who Served As An...
John Maynard Keynes was an economist who served as an economic adviser for the British
delegation at the Paris Peace Conference in 1919. Soon after, Keynes resigned from his position and
wrote The Economic Consequences of the Peace. A very influential work detailing the major pitfalls
of the Treaty of Versailles. Keynes discusses the economic consequences of the Treaty of Versailles
on all of Europe. He claims not to question the justifications of the treaty but rather to bring to light
how Its aims will cement the economic downfall Europe. He asserts that the treaty's provisions were
constructed through a veil of contempt and aimed to ensure "the future enfeeblement of a strong and
dangerous enemy" as well as to exact revenge, and ... Show more content on Helpwriting.net ...
He asserts that France was spiteful of Germanys superior economy before the war, however, France
feared that under the "fourteen points" Germany would surely recover quickly, surpass France, and
use those resources to war with France once again. France's aim then, was to wreck Germanys
resources and claim as many of them for France as possible. Therefore, the purpose of the treaty was
to obliterate Germanys power, physically, and economically and build up the French economy.
Keynes then lays out the provisions specifically designed to cripple Germanys economy and line
France's pockets at the expense of not only the German people, but Europe as a whole. According to
Keynes, Germanys successful economic operations were reliant on overseas commerce, Coal and
Iron, and transportations and tariffs, all economic systems that the treaty specifically attacked.
For example, he discusses the provision requiring Germany to cede "all her rights and titles over her
oversea possessions" as well as any positions or assets located in former German areas ceded to the
Allies. Keynes specifically points out that this includes railways, private property's, and companies,
however, not any debt that these properties or companies may have accrued. These provisions not
only would result in a considerable loss of revenue and overseas relations, but also considerable
economic enterprise. In addition, to this severe loss of property and assets,

John Maynard Keynes And The First World War
Introduction
Since the industrial revolution in the 1800s, the European economy changed for the first time. John
Maynard Keynes, a well–known English economist, was a member of the British delegation to the
peace conference in Versailles in 1918. He offered an opinion in which would cause the reparation
against Germany to have negative economic consequences for Germany and Europe as a whole.
[cite text pg 341]. This paper will discuss in depth the life and approach John Maynard Keynes used
when analyzing the Treaty of Versailles. To do this, one must consider the effect of the First World
War and the imposed reparations on the German economy and the European economy as a whole, as
well as the effect on the United States economy, as they issued ... Show more content on
Helpwriting.net ...
By 1914 all the European Powers had elected lower houses of parliament, and a majority of the
adult male population was enfranchised. The press was relatively free, and citizens could form
parties and pressure groups." Prior to the 19th century, most European citizens were under complete
ruling of a king or queen, meaning they have final say over any and all political, financial, legal, and
economic decisions. With the democratization of Europe, citizens could now participate in important
political decisions, which in turn, makes the European economy much more vulnerable.
Democratization of Europe makes the European economy more vulnerable because a king/queen
makes economical decisions based solely to make themselves more wealthy while furthering the
nation. On the other hand, a political leader who makes economical decisions to satisfy the needs of
citizens, keeping the future and wealth of the nation as a lower priority. Also, a king/queen is more
likely to be more experienced and might have more attachment to important decisions, due to the
fact that they are taking over the role of the rulings of a previous family member in the country.
They also make decisions that impact the nation long term, rather than just for the amount of time
for which they are in power. Alternatively, in the consideration of democratic leaders, there
generally is a lot of leaders to make decisions for the country, allowing

John Milton Keynes Vs John Maynard Keynes
Friedman vs Keynes
Within this informative essay there is information based on two economist. The two economists
mentioned would be John Maynard Keynes and Milton Friedman. Topics that would be mentioned
would be about Keynesian economics and monetarism and the differences between the two. Within
the paragraph the information is taken from electronic sources. The purpose of this informative
essay is to mention the differences and similarities between the two economists. John Maynard
Keynes and his achievements during his life
John Maynard Keynes was an economist born on June 5th 1883 in Cambridge, England(John
Maynard Keynes 1883–1946, 2008, para. 1 and 5). In the 1920's Keynes was a believer in theory of
money known which is today called ... Show more content on Helpwriting.net ...
These macroeconomic theories impact the way lawmakers create fiscal and monetary policies.
Keynesian economists believe that a troubled economy continues in a downward spiral unless
something is done to drive consumers to buy more goods and services which would cause the value
of money to retain the same or to be of higher value.Monetarists believe in the control of the supply
of money in the economy and allow the rest of the market to fix itself hopefully leading towards the
same as what Keynesian Economist hope to achieve. The only differences would be which view is
more reliable and on what cases would both need to be used or would a specific one need to be

John Maynard Keynes : Multiplier Effect
John Maynard Keynes: Multiplier Effect
In 1931, a British economist named Richard Kahn introduced what is known as the multiplier effect.
In Kahn's article, "The Relation of Home Investment to Unemployment", he first introduced the
multiplier effect which in turn ended up being his most notable contribution to the field of
economics ("Richard Kahn, Baron Kahn."). The multiplier effect can be defined as how aggregate
expenditure, for example government spending, causes an increase in output. According to
Investopedia, the multiplier effect showed that any type of government spending results in cycles
that increase employment and prosperity, no matter what kind of spending it is Beattie, Andrew).
With that being said, how much money should ... Show more content on Helpwriting.net ...
Although Keynes passed away in 1946, he is considered arguably the most influential economist of
the 20th century and event today we continue to see some economic ideas originated from Keynes.
The primary concept surrounding the multiplier is that once money is filtered into the economy,
people will continue to spend that money. Theoretically, if people saved no money, by Keynesian
Economics, the economy would be a perfect, unstoppable engine running at full employment
(Beattie, Andrew). Unfortunately, people do save money and the economy isn't perfect. Keynesians
argued that the more that the government can get people to spend all of the income, the closer to
perfection the economy would be. With that being said, Keynesians attempted to counteract savings
by taxing savings. This would ultimately cause more people to spend their money rather than save it,
because why would people save if they have to pay to save?
Keynes' defined the multiplier to be 1/(1–MPC), where MPC stands for the Marginal Propensity to
Consume. Although, what does "Marginal Propensity to Consume" mean? When a person gets
money, let's say $500, the person will either spend that money or save that money. The rate of how
much the person spends is the Marginal Propensity to Consume. So, if the person spends $450, that
means that essentially they save $50, because it is assumed that all of the money is going towards

Comparing John Maynard Keynes And F. A. Hayek
In the face of a complex world, it is often difficult for both individuals and governing bodies to find
the best way to live and rule. Many great thinkers have attempted to make sense of the world with
organized systems that raise the question of what role humans hold within that structure. Friedrich
Nietzsche creates an overarching view of existence in which individuals are responsible for their
own lives, subsequently creating their own realities. For Nietzsche, human agency is the only
system. On the other hand, John Maynard Keynes and F. A. Hayek create financial systems that take
opposing stances on whether free will helps or hurts the economy. In this essay, I will show how
both economic authors temper Nietzsche's radical and existential ... Show more content on
Helpwriting.net ...
He acknowledges that his system isn't going to be ideal, saying, "Of course, these adjustments are
probably never 'perfect' in the sense in which the economist conceives of them in his equilibrium
analysis" (Hayek 527). This is important because, while the structure may have its flaws, Hayek
doesn't rely on natural balance like classical theory or the government as an ever–present safeguard
like Keynes. Instead, Hayek is realistic about the ups–and–downs of the economy, saying that
people must swallow the "bitter pill" of tough times in order to keep their free will (Wise). A strong
government infrastructure helps the economy persevere through its struggles and thus his economic
structure finds a realistic approach to stabilize individual power and

Economist: Milton Friedman And John Maynard Keynes
Economist, Milton Friedman and John Maynard Keynes disagree on many of the economic policies
and theories created by each individual. Each financial analyst has their own opinion when it comes
to the Theory of the Consumption Function, monetary policy, and the free market. Friedman, a
capitalist economist lays out of the benefits and importance of spending and earning money. While
Keynes, a man who has more of a socialist view, finds many of Friedman's theories ineffective. The
Theory of the Consumption Function, was written by Milton Friedman, in 1957. In this piece he
speaks on the topic of spending decisions. Friedman believed that individuals will base their
spending arrangements on future income, Friedman called this "permanent income."

Biography of John Maynard Keynes Essay
Throughout the history of economics, there have been many experts and professors whose ideas and
theories have fundamentally affected our thoughts and practices, but none has been as influential on
this subject as John Maynard Keynes. He was a British economist who revolutionized economic
thinking and to this day his work continues to be appreciated and utilized by many into what is
known as "Keynesian Economics."
John Maynard Keynes was an Englishman born in 1883, who went on to become one of the most
influential economists of the twentieth century. We know this economist best for Keynesian
economics which is described as the economies success is predicated on aggregate demand,
meaning that there is complete spending in the economy in ... Show more content on
Helpwriting.net ...
On the other hand, Robert Skidelsky, another British economist, seems to have a different view on
Keynes' work and the view of the economy. Skidelsky states that in today's economic climate
"Reforms should not be pressed prematurely, because they may cut off recovery by denting business
confidence, and they should follow a deep, not superficial, attempt at understanding what went
wrong." (Skidelsky, 2009) He also stated "Keynes was very clear about this in the early 1930s. It
might even be necessary to have a 'conservative' budget, he told a Swedish correspondent, if that
would help to get lower long–term interest rates." (Skidelsky, 2009) However, he goes on to imply
that although Keynes is correct in his thinking he backtracks on his notion that Keynes is still
relevant today as he states "the problem is the same today: how to carry out a Keynesian policy
when most of the key actors have a non–Keynesian model of the economy." (Skidelsky, 2009)
Skidelsky goes back and forth on Keynesian economics and again states that Keynes has influenced
current policies but continues to contradict himself by stating, "Keynesianism can at best be a
common element in very different systems of mixed economic

John Maynard Keynes And Joseph Alois Schumpeter During The...
Keynes versus Schumpeter Among many economists throughout the world, especially two
ambitious figures, John Maynard Keynes and Joseph Alois Schumpeter, stood out vividly. Although
both of the economists ideologies differ greatly, each figure had contributed to the betterment of the
society throughout the world, especially the United States of America. Keynes, a command
economist, was in favor of government interference while Schumpeter, a free market economist, was
in favor of determining prices and goods by the consumers. In order to distinguish differences
between command and free market economy, three components are used as a guide. First, the
influence of John Maynard Keynes during the Great Depression. Second, the influence of Joseph
Alois Schumpeter during the Great Depression. Third, the rise of Keynes and Schumpeter.
Ultimately, the practices of the command and free market economy are the fundamental part of any
economy. Hence, Joseph Alois Schumpeter was the eminent figure that enlightened the benefits of
letting the economy flow without government intervention for the betterment of the society.
Monetarism
When looking into Keynes' and Schumpeter's introspective opinion on monetary spending, both
economists shared many similarities and differences. First, Keynes (1936) creates a contrast
between a cooperative – real wage – economy and an entrepreneurial – money wage – economy
while Schumpeter (1934) creates a contrast between the circular flow and economic

Compare And Contrast Classical And Classical Macroeconomics
Classical versus Keynesian Macroeconomics
UoPeople: BUS 1104
Macroeconomics
Professor Woldie
(Written Assignment: Week 2)
Brief:
Compare Keynesian and classical macroeconomic thought, discussing the Keynesian explanation of
prolonged recessionary and inflationary gaps as well as the Keynesian approach to correcting these
problems.
One of the many wonders of the internet is that it is possible to directly access and easily search the
major works of David Ricardo and John Maynard Keynes, rather than just reading what later
thinkers have read into them. Doing this emphasises the point that they are not the respective
champions of 'classical macroeconomics' and 'keynesian macroeconomics', engaged in a live debate
as to whose theory ... Show more content on Helpwriting.net ...
There are mass trends that act as laws, irrespective of an individual actor or a single government.
This can be seen as an analogy to physical laws. Gravity always acts to make things fall downwards.
Goods get more expensive when demand rises for scarce items. Economic man always seek to
maximise his advantages. To say that classical economists like David Ricardo believed that
governments could never have a beneficial effect on an economy would be like saying that
governments can never pick anything off the floor and put it back on a shelf. Ricardo never said
that. A full century after Ricardo, Keynes showed that governments could act to mitigate the effects
of a recession by stimulating demand. He did not claim that he could flatten the economic cycle so
that markets never expanded or

John Maynard Keynes Essay
What was Keynes' theory and how did he influence the world| economy in the 19th century?
Before the 1930s the US economy had been ruled by the forces of supply and demand and with as
little government interference as possible and it seemed if everything went smooth.
But in reality the system favorite the middle– and the upper–class, so about half of the American
population did not participate in the economic growth. Wealth and purchasing power were uneven
distributed and over production in industry and agriculture became a severe problem. In addition,
speculation in stocks had driven the value of the stocks up to unrealistic heights. All this is said to be
some of the causes for the Great Depression that reflects the 1930s. What ... Show more content on
Helpwriting.net ...
What was missing was purchasing power. If the workers got money then they would spend it and the
money would change owner and eventually create willingness to invest. But the government had to
start the process, and use money, increase the salary and take up loans even though it could lead to
deficit budgets. The most important thing was to get people back at work. It is clear to see that
President Franklin D. Roosevelt and the U.S. administration adopted Keynes' theory, known as the
"General Theory", in their recovery plan, "New Deal". The government became actively involved in
creating jobs and economic activity. One example is the Tennessee Valley Authority (TVA), where
the government built reservoirs and power stations. Women were now also allowed into the
government and the administration. The goal was to get one of the family members a job. To get
better control over the economy Roosevelt got the Congress to pass a law which was called the
National Recovery Act. Its intention was to regulate prices and wages. Even though USA had
adopted his theory, it was until the postwar era Keynes' theory about an active government really got
approval in the industrialized countries. Even when conservative governments were in control they
kept their economies under close surveillance. In Britain, France and Italy the postwar governments
nationalized number of the

The Change Of The East India Company Monopoly
In the four months that he was in England, Say was confronted on the things he saw, the things he
admired and those that he deplored. Still in England, Say was able to make crucial friendship
networks with well–known economist such as, David Ricardo, Jeremy Bethem, James Mill and
Thomas Malthus. At the time, he visited Glasgow; he got a chance to sit on the professorial chair of
Adam Smith, and this marked an emotional period in his life. Without a doubt, his perspective of
England could not go without observation and criticism of his fresh acquaintances, particularly their
view on the East India Company monopoly, as well as, the agricultural protectionism of England via
the Corn Laws. However, both of the problem eventually came to an ... Show more content on
Helpwriting.net ...
It would help them create the basis in which they would get to criticize the decisions of the state.
Say gave lectures at the conservatory for about ten years. It was in the acceptance that he coexisted
in a government that was doubtful of academic critics. During this time, some of the people who
talked about things that the state was not pleased would have their course closed.
Finally, prior to his death, about a year or less, Say was given a political economic chair at the
France College. Say was for the thought that, his discipline should have the name "social economy,"
as economic policies, and economic laws impacted the society as a whole.
Even though he was not feeling well in his last years of life, Say was still productive and was still
writing, overseeing and lecturing the fifth version of his famous book 'Treatise ' which was
published in 1826. Say 's wife died in 1830, which led to Say' being depressed and lonely. In 1832,
weeks later after his opening lecture at the France College for the opening term, Say died at the age
of sixty–five.
Say got credited with more than what came to get known as Say 's Law of Markets. Say was neither
the first person nor one of the first people to introduce unique economic concepts into the paradigm
of the classical school. Examples of such concepts are entrepreneur, services, and utility. Since he
was fluent in the English language, Say

What Do John Maynard Keynes, Richard Norgaard, And Fred...
What do John Maynard Keynes, Richard Norgaard, and Fred Block and Margaret Somers have in
common? They all challenge widely accepted economic thinking and support thoughtful,
progressive government action in the midst of social crises. In the 1930s, Keynes debunks a
rationale for a laissez–faire system that was perpetuating large–scale human suffering and made a
strong recommendation for government intervention. Norgaard then broadens Keynes's critique of
assumptions underlying free–market ideology to include all widely unquestioned and accepted
economic beliefs–– which he terms economism–– and urges a transformation of this belief system
toward discursive democracy to enable effective environmental regulation and economic
redistribution (lecture). Adopting Keynes's focus on empirics while using a similar explanation as
Norgaard, Block and Somers criticize a study of late eighteenth–century British poor laws that is
commonly used to oppose welfare policy while explaining that its widespread, unquestioning
citation in academia and policy analysis points to the pervasiveness of conservative assumptions
about the poor and what is natural. Altogether, these authors urge us to reconsider dominant
economic stories that lack a circumspect, factual basis as we consider various social, environmental,
and economic policy alternatives.
John Maynard Keynes is the first economic maverick here who calls attention to the flaws in
common economic assumptions while also expanding the

Difference Between Classical And Keynesian Economics
Parts of economic theories seem to constantly change because there is no perfect economy;
however, there are two categories in which most economists fall under: Classical and Keynesian.
Classical economists follow the theory described in Adam Smith's Wealth of Nations regarding a
Laissez–Faire policy with no government intervention. People who are considered to follow the
Keynesian economic theory generally favor government intervention in the economy during
recessions in the business cycle (Colander p. 524). Three well known economists fall into these
categories: Milton Friedman and Friedrich von Hayek were considered to be classical economists,
while John Maynard Keynes, developed the Keynesian theory. Friedman was a firm believer in
capitalism and that the market's guiding hand would help to regulate the economy. According to the
... Show more content on Helpwriting.net ...
Similar to Friedman, he promoted a Laissez–Faire style economy and figured that government
intervention during recessions would only make problems worse (Encyclopedia of World Biography
222). He also believed that the more regulations the government had on the economy, the less
freedom consumers had when making a purchase (223). During the Cold War, many economists
though the Soviet Union's economy would grow at such a high rate that it would be larger than the
United States' economy; however, Hayek found holes in these arguments and did not think this was
true. According to economist David Peterson, Hayek's argument was, "...prices that efficiently
allocate resources cannot be set by government fiat. When an economy lacks the daily input of the
individual decisions of millions of consumers...the result is colossal waste and inefficiency (86).
This contributes to Hayek's free enterprise view on the economy, that it should be consumers who
determine the prices of goods based on their demand, not the

Von Hayek's The Road To Serfdom
Friedrich August von Hayek was born in Vienna, Austria in 1899 to a notable family. At the age of
19, Hayek started to attend the University of Vienna. While attending there, he received doctorates
in law (1921) and political science (1923). During that time, Vienna was one of the top three
universities for studying economics. Hayek went to college right after World War I, when Vienna
was in poor conditions. Hayek hoped to better improve the social conditions in Vienna. During his
time in Vienna, Hayek attended Mises's private seminars, Privatseminar.
Hayek became the director of the Austrian Institute for Business Cycle Research in 1927. In the
1930's, Hayek was part of the first group to leave Vienna. Hayek went to join the faculty at the ...
Show more content on Helpwriting.net ...
His work on industrial fluctuations has had an impact on the business cycle theorists. Margaret
Thatcher was influenced by Hayek's The Road to Serfdom. After reading Hayek's book, "she
absorbed deeply Hayek's idea that you cannot compromise with socialism" and realized that "her
own party had done just that." ("Thatcher, Hayek & Friedman."). She was a devout politician against
socialism. Hayek influenced many, including but not limited to Winston Churchill, Milton
Friedman, Robert Nozick, George Orwell, Karl Popper, Virginia Postrel, Ronald Reagan, Julian
Simon, Hernando de Soto, and Thomas Sowell" ("Friedrich Hayek."). He helped to set the
groundwork for economists and politicians to understands the basics needed for a free

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