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Difference Between Classical And Keynesian Economics

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At first glance, it’s tempting to polarize the difference between Classical “laissez-faire” Economics and Keynesian Economics. My immediate thought is that Classical Economics is a conservative model, leave it up to the individual to do what they will and to shun socio-political engagement when it comes to wealth. On the other hand you have the more liberally oriented spend and engage in order to stimulate the economy model. The polarization happens because of the way politics have branded themselves - Republican or Democrat, small uninvolved government vs a government for the people which may seem a bit socialistic at times. But as you read more, you can really dig into the nuances of both economic theories and see how interwoven financial …show more content…

It demands that since the government benefits from the labor of its people and while also supporting its interests in specified industries, that it should also give back to infuse and invigorate the flow of money and opportunity when it stagnates. Because in a modern society full of growth and choice, companies that succeed are the ones with deep pockets, strong advertising and political interest of stakeholders and money-makers. Basically, those who benefit continue to feed into the system in order to keep it energized. This way reflects the complexities which support success and lead to inevitable downturn in equal measure. Economist John Maynard Keynes studied this in an attempt to understand how The Great Depression occurred and to outline ways we can prevent such broad economic catastrophe. Keynesian Economic theory certainly doesn’t replace Classical Economic theory, more they are compliments to each other …show more content…

Many of these theories are incomplete and leave unanswered questions to this day. A macro factor that stands out to me is that the US had this major collapse right at the time when globalism was on the rise. As competition for trade and markets began to expand with the growth of other countries, perhaps the US couldn’t keep up. In a nation where unquestioning loyalty seems to be a value, it probably is unpopular for me to say something like this, but I can’t help seeing this as a contributor. The industrial revolution boomed and then deflated, the higher the rise the farther to fall (Amadeo

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