Keynes Vs Hayek

1. John Maynard Keynes was a British Economist whose ideas had changed the fundamentals of Macroeconomics. Friedrich Hayek was an Austrian-British Economist whose ideas were for classic liberalism. Both the economist had rival views during the period of 20th century. Both had their own dominance stream. Keynes was a believer of strong government regulations market whereas Hayek was a believer of free market. Both seemed to have a conflict of interest in a similar topic. Keynes believed in having a ‘planned economy’ whereas Hayek believed in having ‘free economy’.

2. Commanding heights is a term that was used by Soviet Leader in 1921. With commanding heights, he meant critical factors that dominated the economy such steel making, transportation, mining and manufacturing. These factors were a deciding

‘The Battle of Ideas’ is the difference of opinions from Keynes and Hayek. Keynes was of the opinion that the world economy should be planned and Hayek was of the opinion that it should be free. Both had their own reasons. While the world was struck by the great depression during WWII, Keynes thought increased government spending could bring that to a stop. Government should come in and start spending in crucial sectors in the economy for mass production. This would create jobs and will result in more spending in the economy. The government could start this cycle of earning and spending by spending money in the economy by either printing or borrowing. Keynes was of the belief that this step of financing its own sectors could bring a change in the economy. Once the economy was improved, government can start cutting on spending. Hayek, on the other hand, was not influenced with this opinion of Keynes. He believed that government control on such economic sectors could prove out to be a disaster for an economy. He saw that as a threat to democracy and stimulated people to oppose. Hayek believed in having free economy and trade, without any government