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John Keynes Vs Hayek

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The two men who transfigured the philosophies of economic systems can be accredited to John Maynard Keynes and Friedrich Hayek. Keynes and Hayek were in fact very good friends, yet they were the epitome of the saying “opposites attract.” John Keynes was born in the United Kingdom in 1883 and was the older of the two. Friedrich Hayek was an Austrian native who later moved to London where the two would eventually meet. Keynes and Hayek both witnessed the globalization of the world with the innovations of technology such as the telegraph, the telephone, steam ships, and railroads (Commanding Heights). The two possessed entirely different perspectives on the take of politics. The major differences of their political visions were their views of government systems in economics, the roles the government should play in the economy, and the proper solutions for a crash in the economy. …show more content…

Bush and Barack Obama adopted Keynes ideas, also known as Keynesian economics; Prime Minister Gordon Brown of the United Kingdom also adopted these theories (The Famous People). Keynesian economics were the predominant theories of the government after World War II. Hayek on the other hand, a classical liberalist from the University of Vienna pushed for a laissez-faire based government. However, since the 1970’s Hayek's idea that the government must only contribute in the most limited way to our economy has gained popularity. (Keynes vs. Hayek: The Rise of the Chicago School of

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The way Martin Van Buren handle the economic crisis that took place near the beginning of his presidency is similar to the crisis America had not so long ago. Although, we will hopefully not have to see President Gary Johnson or President Jill Stein in such a crisis. Even though we may not see these two in an economic crisis it is very possible that their economic policies will give an example of what they’ll do. Martin Van Buren separated the banks in hope that this will produce competition between the banks instead of bailing them out. Gary Johnson’s policy of keeping the government away from the economy will most likely be similar to Van Buren’s policy.

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This new common sense greatly reflected Keynesian views of the economy. Not only did this new common sense become popular in the United States, but it also became popular throughout the world. Many countries began to adopt this new common sense, especially after World War II. Globally, there was a common agreement on the belief that government intervention in the market was not a bad thing, but an essential key factor in maintaining a healthy economy. Following Keynes’s ideologies, the United States government increased the budget deficit to help other countries whose economies were destroyed by the war recover their economies.

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United States President, Ronald Reagan, and United Kingdom’s Prime Minister, Margaret Thatcher, believed in the economic principles of Friedrich Von Hayek. They believed in free markets and free enterprise. They also believed that governments are not to interfere with the markets and the economy at all. Both leaders removed centralized planning of their economies. They also privatized state-owned businesses, markets, and allowed the markets to decide prices and regulate itself.

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Though both men believed in success, they saw it differently and thought people could achieve it by going in the right

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John Keynes said that our economy has to be stimulated by the government to help jump start the economy. He also preached that the only way that the government would pull itself from the dark hole that we fell in would be for it to increase government

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During the 19th and the early 20th century, there was almost no interest in macroeconomics by the prominent economists of the time as it wasn’t the trend. The last major work in this field was done by Adam Smith on the theory

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Milton Friedman revolutionized free market thinking. He believed in a free market as the best solution for the stability of an economy. Basing his theories on Adam Smith’s “invisible hand”, Friedman further developed Smith’s theory. In short, Friedman’s Neoliberalism can be described through one of his quotes on the social responsibility of business, “There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits, so long as it stays within the rules of the game” (Cooney, 2012). Friedman’s belief of the market’s perfection is based on the assumption that no actor would agree to a transaction if they did not find it fitting for themselves (Friedman, 1975).

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To clear it up, was there greater similarities than differences? To start it off, One of the first sections of similarities that they both had in common was Social positions. Social positions influences social status. Of the two, they of course had their own social positions in their country. Some information helped to find out both of their similarities.

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