The Keynesian vs. Classical debate still rages today as the economy faces unemployment and governments around the country face rising debts. Read the article to help you decide whose corner you are in. http://www.soundmoneyproject.org/?p=2085 http://online.wsj.com/article/SB10001424052748704738404575347300609199056.htmlAlso, be sure to check out the rap video posted below.
Keynes vs. Hayek: Fear the Book and Bust
Keynes vs. Hayek: Round 2... Fight of the Century
105 comments:
First
Eric G
The keynes view on economics is fully dangerous, and mainly ineffective. The government involvment in attempting to dam the river of money is only detrumental. For example, the Hawly-Smoot Tarrif during the great depression. This tarrif singlehandedly destroyed international trade, and created a major second collapse in the American economy. A fully free market has lead many nations to prosperity. Reganomics effectively (even though 3 years of economic sag) eliminate the burdens on the middle class, and spurr an economic boom. The hayek principal isn't perfect; however, in the debate of economics, it holds the least amount of evils. With little government, the economy can run at full capacity, and act in the better intrest of the people without running up debt and stressing the middle class.
Go Hayek!
After watching the movie and reading this article, I would have to side with Hayek. Hayek was a proponent of limited, or even no, government intervention, because he thought it would harm the economy. He believed that too much central planning would lead to Totalitarianism. Also, Hayek believed in a free market economy. I side with Hayek's theories because I believe that a free market economy is best for the United States. It allows Americans to do what they want with their money, without the government telling them. Even though many think Hayek's theories are crazy because they present no way to combat inflation / a weakened economy, I think that is entirely up to people. All that would need to be done in order to fix a weakened economy would be for people to go out and spend more. In doing so, the economy would bolster strength and be able to return to normal. I also agree with Hayek because I believe that too much government intervention can ultimately harm us; limited, or no intervention would be best, because it allows us as citizens to do what we want. I also love mountains.
I agree with many aspects of the Keynesian economic philosophy in that government intervention in our economy is necessary. Without government intervention our economy would not be able to work efficiently. Keynes compares the economy to a machine. Machines need to be maintained. They require supervision and occasional help, be it through maintenance or supervision. I think that this analogy is an appropriate representation of the United States economy, and other economies around the world. I do not believe that an entire society, unsupervised can keep a working economy stable. Government is necessary to restrict the economy in times of inflation, or to expand the economy in times of recession and depression. Essentially, the government is needed to keep the economy healthy.
Ryan S.
I agree with Keynes and his economic system opposed to Hayek’s system because I am an advocator for government intervention and regulation of the economy. Whereas Hayek may have several good points during times of economic stability he has no answer for when the economy is struggling or reaching its extremes. Under Hayek, I do not believe the economy can grow, or bring itself out of any sort of economic downturns. Keynesian economics allows for growth because our elected officials in government will decide upon policies that are for the good of the public. We should have faith, in the government that we the people elected, that they will only do things that will help the economy and not hurt it or at least intentionally. Because of this, I support Keynesian economics and find Hayek’s ideas to be useless and wrong.
Kelly D.
Based on the movie and article, I agree with Hayek's ideas of a free market economy. I think that there shouldn't be government intervention in the economy because, for example, in the movie it showed how in times of stagflation the best thing to do is to wait and let the economy fix itself. Trying to fix one of the problems (unemployment or inflation), will just make the other one worse, so this is a main reason I agree with Hayek's theory. Also a solution for stagflation when using Keynesian economics is impossible. I also think that right now with our current state of the economy, it is best to wait and see what will happen over the next few months before using either an expansionary or contractionary policy. Giving the government too much power in the economy can possibly lead to a toltalitarianist government because it destroys freedom.
I believe that government intervention into the economy is a crucial factor for our economic buoyancy. Although, in a perfect world, the government would be a seperate sector from the economy, it is a necessary evil. Since the economy has a cyclical nature, it is sometimes necessary for the government to spur this cycle back to an upward, healing trend. During a recession, the government may have to increase spending or cut taxes as a way of increase either G or C of GDP. I think that Hayek is somewhat idealistic and naive when he said that the market can completely control the economy; it is the joint effort of both that keeps the economy as stable as possible. If the government controlled the economy completely, the system would become too dictatorial; on the other hand, without any government influence at all, it would be completely volatile.
I believe there is a time and a place for every economic system, including both Keynes and Hayek. However, for the most part I have to side with Keynes. Most arguments going against Keynes state that government spending will not fix a recession, but only cause an unnecessary deficit. I do believe that this is true in times where massive stagflation occurs, but I also believe that until that point the Keynesian economics has more merits that Hayek’s system does for the most part. Government spending is a good way to regulate the economy in times where a total collapse is occurring or is about to occur. Consider the Great Depression- in a time where it seemed impossible for America and literally the entire world to bounce back from an ever-deepening hole, America began to use FDR’s new deal and all that came with it in order to bounce back.
The only problem I have with Keynes’ system is that it’s sort of a shot in the dark type of deal. Often times you can try and aim government spending at the direct spot in the economy you need fixed, but you just have to hope that the spending will actually work. This is especially true in times of stagflation where Hayek’s system is clearly more efficient. In terms of Hayek’s economic system in Europe in the eighties you could see that yes, it helped a little in the long run, but it took away a lot of stability in the short term. A lot of people lost jobs that usually had long term consistency. And that is what I think the most important part of the Keynesian system is, consistency.
James C.
After reading through the article, I would have to agree with Hayek's form of economics, primarily because large scale public debt cannot be fixed by running up an even greater deficit. My reason for this is that if, in order to run a deficit, you are borrowing money from another country, such as what we are doing now with China, that the loan won't be payable without sufficient output. Due to the fact that the U.S. imports more than it exports, this loss from an international loan cannot be paid off without an increase in output. Combine this with the the fact that the type of spending does not matter from Keyne's side of the spectrum, the truth is that where government spending comes from does actually matter.
I think that there is no perfect economic system, but both Keynes and Hayek both have a lot of merit to their ideas. I think that both of these systems could work, but that Hayek's plan is more versatile and will stand up to a greater variety of economic situations. Setting the market free and letting it seek it ebb and flow, like how the glorious tides of Spring are controlled by a celestial mystery that mortals cannot hope to comprehend. In other words, I believe that letting the economy handle itself will make it naturally boom and bust, but of course there is the latent threat of an unescapable depression. In such a case there may be government intervention necessary, but overall I think there is a greater risk of economic failure and/or stagflation using only Keynesian ideals.
Steve G.
I would have to lean more towards a Keynesian style of economics. Though Hayek’s system can be useful in some instances, with our current economic state we cannot just allow these issues to work themselves out. Government intervention is something that no one particularly enjoys, but in certain instances it is necessary. Everyone apparently thinks that I believe in pure, unfiltered capitalism but honestly that would be a foolish policy for two main reasons: 1) Markets may regulate themselves after time has passed but you still must think of the people who are affected by the poor economic times that they first must go through and 2) Without the government intervening at certain points, economies would have no central force to stop corruption and exploitation of consumers and/or businesses. Though neither for me is particularly ideal, Keynes certainly has the edge over Hayek in my mind.
Tatianna M.
4/01/11
Period 3
I have to say I support Hayek's view on Economics. After watching Commanding Heights, and reading this article, I find myself siding with Hayek because of the strong evidence that supports his argument in proof that his idea works. Germany for example came out of a extreme recession by following Hayek's idea. But everyone else in the depression was too embarassed to follow Germany because of the past. Meanwhile, everyone else continued to impose keynesian economics which never really helped them get out of the hard times. Although I don't think Hayek's idea is completely flawless, I do beleive that between Hayek's Idea and Keynes' Idea, Hayek's Idea is the better one.
RamRod
I think that there is no perfect economic system, but both Keynes and Hayek both have a lot of merit to their ideas. I think that both of these systems could work, but that Hayek's plan is more versatile and will stand up to a greater variety of economic situations. Setting the market free and letting it seek it ebb and flow, like how the glorious tides of Spring are controlled by a celestial mystery that mortals cannot hope to comprehend. In other words, I believe that letting the economy handle itself will make it naturally boom and bust, but of course there is the latent threat of an unescapable depression. In such a case there may be government intervention necessary, but overall I think there is a greater risk of economic failure and/or stagflation using only Keynesian ideals.
Works Cited
Culver, Eric. "Keynes vs. Hayek: The Great Debate Continues." "Keynes vs. Hayek: The Second Bout". Mr Karmin, Esq, 01 04 2011. Web. 1 Apr 2011. . BIBLIOGRAPHIC CITATION:
Culver, Eric. "Keynes vs. Hayek: The Great Debate Continues." "Keynes vs. Hayek: The Second Bout". Mr Karmin, Esq, 01 04 2011. Web. 1 Apr 2011. .
[NOTE: Italicize ""Keynes vs. Hayek: The Second Bout""]
PARENTHETICAL CITATION:
(Culver)
Mike L
If I were to side myself with with only one of these master economists, I would definately have to choose Mr. Hayek. If the government would just leave the economy alone, everything would be fine. All the government spending is doing is restricting the growth of the economy. Government is the reason for our current state. Without any government regulations, the economy would be allowed to grow exponentially. In the end it would all work out. This is because the economy is a balance between the consumer and business. As they fight each other, the different aspects come to an equilibrium and people will become happy. There will be steady growth because the people and business chose this way. The government can only stifle.
Shawn D.
I believe strongly in Hayek's system of economics. The economy will work it's self out for the better in the long run. If the government does not step in it leads to competition which is good for both consumers and businesses. Consumers get the best products they can get and at the lowest prices, and businesses get increased sales volume and profit due to increased consumer demand. Government intervention interrupts the natural up and down flow of the economy and elimintates competition. However, i do believe some government intervention is neccessary but only in regards to safety, for example, the automotive industry should be looked after by the government to make sure that the cars being built are safe. But that should be the limit on government intervention in the economy, for safety and for nothing else.
Although there is no “perfect” economics ideology, I firmly believe that government intervention is beneficial. Perhaps the most pivotal reason for government intervention is that it achieves social equity. If left to the “invisible hand” of the market, the distribution of wealth will be even more unequal than it is today. However, regulation can help to distribute resources in a fairer manner, ensuring that every citizen has at least some wealth. In addition, markets often respond sluggishly to changes in supply and demand. If unregulated, the ensuing lag between stimulus and response will cause the market to shift out of equilibrium. The government can react relatively quickly to such changes and cause the market to recover much more quickly. Although numerous Americans do not approve of government intervention, the government plays a key role in economic stability that many take for granted.
I think that the Keynesian economic philosophy has merits that could be appropriate if implemented properly and in a succeful manner. However, I think that Hayek's economic ideals are more effective in most instances. With little government control, the economy in most cases is able to stabilize itself without an increases in taxes or a limitation of freedom. Also, the government would not have to gain federal debt being so involved in the economy and spending taxpayer money. At the same time, however, I think that in an entirely free market economy, businesses can grow uncontrollably while small businesses will go out of business and members of the lower class will end up getting poorer. The government should be responsible for controlling monopolies and making certain regulations on big business so that prices don't grow in excess with limited competition. Small businesses and those of a lower class should be protected, which is an idea of Keynes that I think is important for the government to do.
Upon completion of the film and article, I find myself agreeing with the economic principles of F.A. Hayek. I feel this way because I have a strong dislike towards the government controlling too many aspects of an economy. I feel that too much government control takes away from democratic ideals and forces the economy towards socialist ideals and tendencies. For example, I strongly disagree with the widespread reforms that are occurring in the US medical industry. This reform is taking hard earned wages away from doctors and, in my opinion, will negatively affect the quality and availability of medical care for future generations. If the economy were run under strict Hayek ideals, the economy would be a free market and would run much more effectively.
Tatianna M
Period 3
4/1/11
I completely agree with Michael B. and Eric G. He strengthens his argument by giving a basic background knowledge of Hayek and where his beliefs come from. Also Eric brought up good points about the Hawly-Smoot Tariff and Reganomics.
Connor L.
After watching "Commanding Heights: The Battle of Ideas," a movie which compared two of the greatest economic theories that we know and live by today, I can only say that I agree in part with Hayek. I don't think I entirely agree with him on all of his views, but I do consider the idea of government intervention one of the most terrible and dangerous things that one could do to an economy. Evidence of this is provided when we see the economy fix itself during the infamous period of stagflation in Germany. This is an event that gives us proof that the best thing to stimulate an economy is to wait and let businesses control their supply and their prices by themselves. Such a policy allows people to realize the value of goods through prices in the form of signals which can easily return an economy back to prosperity.
The event also alludes to the fact that if one attempts to fix an economy, they can only give birth to another problem. This states that by implementing Keynesian economics during a depression or recession, turning the economy around is impossible.
After learning about and analyzing the economic views of Hayek and Keynes, I would probably agree more with Hayek’s policy. I think that limited government intervention in the economy is the best idea. Although I agree with Hayek’s policy more than Keynes, I think that an economic policy that uses parts of both policies would work well for the economy. I think that some government intervention can be good if it is needed, but too much would hurt the economy by causing very high inflation. Ultimately, the economy seems to run much more smoothly when the government does not get too involved in the economy.
I am completely on Hayek’s side in this debate. I believe a free-market, laissez faire, economy is inarguably the most democratic of all economies and that history has shown that over-planning leads to a poor economy. I also believe that this free-market economy has the ability to fix itself, even in weak times. When prices are too high, people buy less, and eventually prices go down. In a way this combats a chance for steady inflation and though recessions are cyclic, so are booming periods. Most businesses should be out of the scope of the federal government, as that is not democratic. Price controls are difficult and complicated and eventually lead to inflation and stagnancy. Once the Fed. starts price controlling it is a difficult task to figure out where to stop price controlling. As we saw in the video, the government even began price controlling sandwiches for airlines. I do believe, however, some economic intervention is needed. Monopolies should always be combated and the Federal Government should regulate potential criminal behavior for economic laws already in place.
James K.
I believe that the Keynesian economic system is the best way to ensure economic stability and prosperity. The greatest depression the United States has ever seen was defeated by Keynesian economics. World War 1 was also a major contributor to the recovery as well, but it alone could not have worked without active government intervention in the economy. If the government were to take no action when the economy experienced a recession, it would only prolong the country’s suffering and high inflation and unemployment would be allowed to grow unchecked. I am not saying I agree with the government setting price levels, but government use of fiscal policy to ensure economic stability is important. Hayek’s model simply doesn’t do enough to address economic hardships and is ultimately inferior to Keynes’s economic policy.
Ryan M.
Before this week, I wouldn't even think to haqve an opinion on this matter, but after watching the video and reading the article, I find myself leaning towards neither side. Both economic systems work for certain types of economies for certain amounts of time. The U.S. was thriving for quite some time under Keynesian theories, and fiscal policy can be a great was to control unemployment. However, the amount of government intervention caused a great deal of inflation in which only Hayek's form of economy would be able to solve. Hayek's system is great for when inflation is high and government cannot do anything with fiscal policy, like Reaganomics. If I was forced to choose a side, I would side more with Hayek, because we live in a society based on capitalism and creation of social classes and competition, so with a free market, expansion will take effect.
John S
Based on the movie and the article I would have to side with Keynes. I believe in a free market, but do believe that government should have a role in the economy. I do believe that the government should regulate the economy. Although I do believe that a free market that promotes competition is what drives people to work harder and become more successful. I believe that an advantage of Keynesian economics is that there is ability for growth and ability to get out an economic downturn because elected officials will, in a perfect world, do what’s right for the public.
I do not think that either theories are perfect and a little too simple and extreme to explain the workings of the complex market system. I would prefer the policies of Hayek over Keynes as I believe that markets are a natural occurance and can regulate themselves naturally. I also believe that in Keynes' theory, the stimulus to the economy is artifcial and is not a permanent change. Also, in the Keynesian system, the recessions in the market are prolonged and the currency loses value quickly as it is unecessarily spent. My views on inflation differ from Keynes as inflation may indicate economic growth, but this inflation is largely created by the government. I agree with Hayek in that deficit spending is damaging to the economy and creates unnecessary debts. Keynes' theory is more idealistic as it proposes a near-perfect system with measures to stop recessions and promises an unrealistic goal. Hayek's theory of a natural economic flow accepts recessions and would function better if the public understood the concepts of highs and lows in the business cycle.
I think that government intervention is necessary in order to have an effective economy.
In the past, government spending has helped the economy to get out of a recession. Although too much government intervention is never good , it is definitely needed when the economy is in trouble. When the economy is doing poorly, more government spending is needed to stimulate the economy; in a recession, the economy will not simply fix itself. It seems that many people who believe in Hayek’s ideas fear socialism and think that government intervening in the economy is the first step to the government having complete control over our lives.
Mark S.
I am going to have to side with Hayek in this argument. There is no sense in the government messing with the economy. Judging from what i saw, the economy can regulate itself. The free market works not only to bring an economy out of recession (as it did with Reaganomics), but it manages to fix issues of inflation as well (as it did in Germany). Government regulation can cause some major issues and without it, there are many industries that could skyrocket (like the airline industry). I agree that the Keynesian system could be helpful to get out of a recession (and it certainly did a lot to get us out of the great depression), but it's downfall is stagflation. No matter how the government interferes, the economy would be in trouble. So unless there is a major issue like a war or natural disaster, i am all for limited government.
Saif L.
Although both the Keynes and Hayek provide valid arguments for why their respective economic philosophies are correct, both philosophies also have their own flaws. If necessary to choose which I supported, however, I would have to classify myself as a Keynesian as I agree mostly with the idea that a government can provide economic stability within an economy. Although the free markets Hayek discusses are theoretically superior to the Keynesian model in that they are self-correcting and need no overseeing, it is difficult to implement a truly free market in practical life. The very basis of the Hayek philosophy is based on Adam Smith’s age old laissez faire idea of letting the economy sway in any direction without any government control; it is based on faith in people to continue spending money even during recessions and depressions. In practical life, however, we don’t really see people spending as much money as they should during these times; instead, people save what they have and take currency, which can be used to boost the economy, out of circulation. The Keynesian philosophy, on the other hand, is based on the idea of the government using fiscal policy to stabilize the economy. In a Keynesian perspective, the government is basically a consumer itself—simply the largest consumer in the economy that can help lessen the economic fluxuations. I believe that it is better to have some government intervention, which is planned out by experts, rather than to only allow markets run freely.
I think both economists prove to have valid points because both their policies have worked when it was necessary. Despite this fact, I think Keynesian economics is more reasonable economic policy. Although Hayek got us out of really tough situations, I think it is foolish to believe that the people will be able to control the economy. Hayek undertakes a huge assumption because he is essentially saying that the public is knowledge enough to control the entire economy of a country or even the world, which is not true. Most of the people living in the world aren't aware of the exact current economic statistics. So, how can he say that these people are qualified to make decisions in our economy. The government intervention in Keynesian economics is very important because it keeps the economy right on track. The government acts as part of the public, but it just has more power than the general public does. The diminishes the minor fluctuations so that the public doesn't feel these little jerks. Hence, I believe that little, little government intervention is better for our economy than open market policy.
Billy K
After viewing the movie and reading the article, I believe that Keynes'idea of government intervention is a necessary evil. Due to the economy's cyclical nature, there will always be a time when government intervention is necessary. An example of this can be viewed during times of stagflation. Without government intervention to increase expenditure, the economy can be trapped in a long period of unemployment.
While Hayek’s classical economic model of minimal government and an economy that is self-regulating is ideal for many reasons, I’m not sure that it is practical, mainly because people are impatient. When the unemployment figures are rising, people don’t want to hear that they need to wait for the economy to readjust; they want help, and for this they turn to their government. I think when the government does not act in the best interest of their people the government is not fulfilling its responsibilities. While arguably government intervention in the long run can propagate inflation and unemployment, I think those are the lesser evils when compared to allowing those currently suffering to continue without any sort of relief. Furthermore, human tendency towards corruption needs to be monitored in some way, and the free market is not able to do so adequately. For these reasons I would have to agree with the Keynesian economic model, although I believe the ideal system is one that alternates between versions of both systems depending on the economic climate.
Khuram(Mr. Karmin's favorite student)
Even though I am a liberal I have to agree with Hayek's economic policy because even though we are one of the great republics in the world, our government is not stable. Our government often switches back and forth between Democrats and Republicans and if our government control the economy, our economy would be a mess. Also, Hayek's economic policy has not failed and Keynes' has failed in the 1980s. Currently our president is spending money non-stop to get us out of this never ending Great Recession which could cause great problem. But I support this spending because most of this money is not going towards nuclear weapon or to the crazy wars which the awesome George W. Bush created, it's going to public sector(At I thinks it's going there).
Mr. Karmin is the best economics teacher! ALL THE KARMIN!!!! :D
I agree mostly with the economic ideas of Keynes rather than the ideas of Hayek because I believe that government intervention is necessary to prevent and/or recover from economic difficulties. Hayek believes an economy should consist of free markets untouched by the power of the government. But doing nothing in times of economic distress would most likely just further extend the length of the struggles. I agree with Keynes in that a coarse of action needs to be taken to minimize the damaging effects of a recession or depression. However, I would like to add that I believe government intervention should be limited rather then overwhelming.
Chris M.
I would have to say that I strongly agree with the free-market principles of F. A. Hayek and the other members of the Austrian and Chicago Schools of Economics. Overall, I subscribe to these beliefs because the economy is cyclical - this has been effectively proven many times - and to attempt to avoid this cyclical flow is simply ludicrous. Keynesian planning errs on the side of attempting to solve problems before they occur, and as the old adage goes, "if it ain't broke, don't fix it". Hayek realized the fact that having debt is not healthy - creating debt to put off economic woes will eventually return, as is seen by the fact that massive government spending during the '30s and '40s led to prosperity, then eventual decline and desperation in the '70s and '80s. Though I understand, as Angelina noted, that Keynesian policy is much more amicable for the population during a period of economic downturn, I also believe that sound economic direction should not be sacrificed for gains at the polls. Overall, both Keynes and Hayek were skilled economists and consequently both Keynesian and classical economics have their merits, but I must say I would first make camp with Hayek.
In my opinion, neither of these economic philosophies is perfect, but if I had to choose one of them I'd chose Keynes. Now although I do believe the economy should pretty much be left alone by the government, I also believe that in times of trouble it may need a little help. According to Hayek, the economy will always get itself out of a bust...but it could take 10-15 years. So the involvement of the government under these circumstances seems like the right way to go. And based off of historical events, it seems like his theories of slowing down unemployment and inflation have, for the most part, worked.
This is an extremely tough question for me to answer because both Keynes and Hayak are viewed to have the two "best," yet different economic policies in the world. I would have to lean a little bit more towards Keynes though. I also believe that government can help us get out of recession, fix our unemployment, decrease the inflation rate, etc. The government has many people with a lot of experience who have made a living helping our economy. I believe we need that equilibrium between demand of output/input, the distribution of money for banks, and the borrowing of money (as well as many others). I don't believe the markets and small buisnesses have enough power to control an economy. That is why I believe Keynes has the slight edge in economic policies.
Brian C.
Before watching the video, I would say that I was definitely in favor of Hayek’s economic ideology. Although I am still in favor of Hayek’s ideas, I would agree with Keynes that government intervention may be necessary under certain circumstances such as depression.
I agree more with Hayek because I believe that government intervention would cause higher taxes for government intervention and higher prices as a result of attempting to increase aggregate demand. Hayek’s policy gives the consumer more freedom and as stated in the video, the booms outweigh the busts. Although recessions are natural aspects of a free market economy and will eventually work themselves out, I believe that in times of depression, government intervention needs to occur to get the economy back in shape. President F.D. Roosevelt stepped in and created many government programs and agencies to regulate the economy and eventually return it back to its previous state. While I am certainly in favor of freedom in an economy, we must sacrifice some of it during times of economic depression.
I am a strong supporter of Keynes. I believe that government intervention is necessary to keep an economy fully functioning. In addition, if an economy is struggling and in a recession, government intervention is necessary to put money into the economy and heal the damaged economy. Hayek would rather wait while a country is recession for the economy to improve because of his free market ideals, but I think just waiting will most likely just drag out the poor economic times. Keynes economic philosophy allows a country to spend its way out of recession, and to control problems like unemployment.
I believe that Hayek's philosophy on the economy holds weight in our society because with such fluctuations of prices there is no way that the government would be able to completely regulate the economy to feel no cyclical effects. In periods the normal economic cycle, the economy, as suggested by Hayek, is stable enough, minus government intervention, to regulate itself. Allowing the government to pour money into the economy and use radical regulatory policy in the natural cyclical changes in the economy simply propagates deepening of one of the two major societal issues: unemployment or inflation. Of course in certain instances of sticky wages and the rachett effect, some government intervention is warrented to maintain the economy and regulate these extreme changes/issues. I do believe, however, that in most instances Hayek is the man.
Are we suppose response to each other now?
I wholeheartedly agree with Steve in that government intervention, although inconvenient, is necessary to ensure stability in the long run. Markets cannot be left unregulated; there would be little to halt corruption and big businesses will grow rich at the expense of the everyday citizen. Once the market has shifted too far from equilibrium, the distribution of wealth will become even more skewed. Furthermore, because our Keynesian principles allow the government a significant stake in our economy, its trends are predictable. We have knowledge on how to promote high stability and low unemployment. In fact, I could go on and on about the benefits of Keynesian principles for *8 PAGES*. But I won’t, for that would be an ipsky pipsky and if I actually had to explain my rationale to the class, I would sound like I was auditioning for the King’s Speech. That being said, Keynesian principles are greatly beneficial to our economy, because we can spend our way out of a recession and have the government, which does not operate for a profit motive, to fight corruption.
After watching and listening to both views on the important issue of economics I began leaning towards the ideas of Keynes. I believe that government intervention in our day and society is very necessary. Although Hayek may make some good points, there is just no way that the economy can completely heal itself in times of economic downturn. The major reason that I agree with Keynes would have to be that his economic policies have gotten us through some of the worst economic depressions in history, so we know that these policies are in fact effective. As we look at Hayek's ideas and beliefs about economics, it becomes clear that in an idealistic world, his policies and thoughts may be quite effective. In general, no one person is completely right or effective in determining an economic policy, both of these economists have great ideas and together, they can be very effective.
I like what Kelly said, when she touched upon the problem of Stagflation, and how Keynesian Theory has no solution to it. I think that is a valuable part of the contrast between the theories of Keynes and Hayek, because what would be done if stagflation occurred? At least under Hayek's beliefs something could be done to try and lessen its effects. I also with the wait and see approach that many have talked about that is an integral part of Hayeks theory. I like this idea because the economy is always changing; sometimes its up, sometimes its down. If the government spends massive amounts of money to end a recession, who is to say that it wouldn't have ended shortly on its own? Then the government would have just spent billions of dollars on something that was unnecessary.
Arnavi V.
I think I would agree with Angelina's comments that the people tend to side towards corruption and the free-market economy isn't capable of controlling that. I think Keynesian economics is a better option because it is can steer us away from corruption or even minimize corruption.
I would like to respond to Eric G's comments about Hayek's principles. I would agree that Hayek's economic philosophy would be the best for the country as a whole, because the free market economy would result in much less government debt than we are currently accumulating with a more Keynesian policy. However, to play devil's advocate with Eric, I would generally disagree with his statement that "The hayek principle...holds the least amount of evils." I think that a classical economy holds a great evil, which is that it basically screws the lower class. A free market system allows big businesses to get bigger, and allows the wealthy population to gain more wealth, so the rich will get richer. However, then I would agree with Eric that the alternate policy would be a Keynesian policy that would strive towards helping the lower class. This policy would also be detrimental, because of the buildup of government debt that would result, and then the middle class would end up paying higher taxes to make up for this debt. So, I think that with either economic policy, people are going to be hurt, so I don't think that the issue is as clear cut as simply one is just better.
I agree with Brian. R that ultimately government intervention leads to increases in inflation, unemployment, or both. Ever since FDR opened the gates for extreme government intervention, the Fed. has always had to control the see-saw and try to balance things out properly. Yet over a long term we have seen this is uneffective. We are in one of the most prolonged and major recessions in decades and the Fed. seems to have few methods for recovery. In a free-market economy recessions are fixed without added effort. I believe that FDR's regulatory agencies to prevent bank failures and collapse are necessary, but added intervention in the last few decades has had adverse effects,
I agree with what Teddy said. He mentioned that in a perfect world, the government would be separated from the economy. However, it is more than apparent that we do not live in a perfect world, and therefore it is impossible for the government to stay completely out of the economy. Because of the business cycle, the government is needed to aid the economy in times of not only recession and depression, but during periods of high inflation as well. Without government intervention, and the application of Keynesian economic philosophies, I do not belie the government could function successfully.
Saif L.
In response to Greg’s (gmayer) comment, I would like to say that I agree with his ideas. I too believe that both the Hayek and the Keynesian ideas are some of the greatest, yet total polar opposite, models ever created—each with their own flaws and strengths. I agree with Greg in that the Keynesian is slightly more advantages in practical life because it can greatly assist our economy in times of hardship rather than allowing it to fluxuate without control. Through a Keynesian perspective, I view the government as one giant consumer in the economy; one that can influence the entire economy with its decisions unlike small businesses. It is the calculated decisions made by experts in the government that can greatly alleviate the economy when it is under stress.
I disagree with Steve G.
Keynesian economics doesn't work but only in wars. FDR spend millions of U.S. dollars and the economy did not pick up speed until when the WWII began. Many government controlled economy are big failures. Japan's economy is an example. Japan's state controlled economy help Japan's economy to boom up to the 1980s but when the economic crisis happen in the 1980s, Japan went down hill. And Japan is still in a economic problem today with it's same state controlled capitalism. There are many more Japan type of economies and many of them don't work. Plus, President Obama's so called stimulus plan is not the cause of the improving economy. The consumer's confidence is the cause. Also the government could set couple of laws to stop economic corruptions, it does not need to be involved and control businesses.
I agree with what Andrew Ravin said. Andrew explained how Hayek's economic system is superior to a Keyne's economic system because it has the ability to fix itself in times of recession. Like Andrew said, Hayek's system is by far the most democratic, and therefore it is also the best option for the United States of America.
Connor L.
In response to: Khuram
I must say that I definitely agree with Khuram as he's provided an excellent example in which Keynesian economics do not work: Japan. Due to their excessive government regulation and by abiding to Keynes's general rule which states that governments would learn to live with little inflation to help balance unemployment, Japan took things way into their own control which forced inflation to dramatically rise as the country did more and more business with the Americas and Europe in the 1980s as Khuram correctly points out. This is a perfect example of how Keynesian economics can severely hurt a country's economy in terms of international trade.
In response to Khuram's comment about the president's stimulus package, I agree again. An example of this is the money that Obama is giving states to provide for better means of transportation (to improve roads, highways, etc.). All of this money has to come from somewhere and it certainly does not come from Washington.
In response to CJ: I understand why you say you would want to "make camp with Hayek". Sure, his ideas allow for competition and fluidity, and as a strong liberatrian, you like the idea of less government intervention. In reality, I feel like anyone who believes that the government isn't crucial to the economy is being slightly naive. Shall we look at history? The Great depression didn't just naturally rise out of the economic ashes; it was due to FDR's New Deal policies that the US economy was able to recover. I do wish that this free market economy could work, in which the economy was left to abide by its cyclical nature. In reality, people just are not patient enough to let things run its course. The people need to have that ideology that the government is attempting to do something about the negative state. What would look worse, a government that is trying to help and failing, or a government that is just letting things happen and waiting for it to get better? The government must at least attempt to bring its country out of economic despair, lest it be deemed incompetent and capricious.
Sam G
I absolutely agree with Peter Ren’s response. He brings up an important point with how the distribution of wealth would become extremely unequal in the United States followed Hayek’s free market principles. Government intervention affects the distribution of wealth in that it assures that the population doesn’t become economically divided between two extremes with no middle ground. In addition, I agree with Peter in that government intervention helps stabilize the economy. If the government didn’t have an affect on the economy and wasn’t able to use fiscal policy to aid, the economy would become quickly unbalanced and fall into a recession.
Mark S.
I have to agree with Ryan M. The truth is, both systems have their benefits. There is no denying that government intervention can do a lot to spur a receding economy. The Keynesian system has been able to propel the US out of many recessions before. However, its core weakness is stagflation, which it can really do nothing to fix. No matter how the government interferes, the economy suffers. The Hayek system has been proven to work and has saved a number of societies from inflation and has even helped to expand the economy during a recession. However, its true that sitting back and doing nothing makes government look bad and waiting for the economy to fix itself may take a while. Therefore, why must we choose a side?
James K.
In response to Eric G, I know that the Keynesian economic system isn’t perfect, but to call it dangerous is a bit extreme. While the Keynesian system may not always be effective at stabilizing the economy, depending on its current state, government intervention can be effective at stimulating the economy and bringing a quicker end to a depression or recession than if the government did nothing. During certain situations the Hayek system may work better, but in general, the Keynesian economic system is more effective at ensuring the economy remains stable and inflation and unemployment remain at acceptable levels.
Mike L
I completely disagree with what Billy K has to say. Government spending is not a necessay evil. There is no reason for this to be in existence. The cyclical nature of the economy only supports the fact that government spending is pointless and only hurts the economy. Government spending looks like it would be good, but in all actuality it hurts it. Also, there is no actual way to stop stagflation so government intervention would only worsen the situation.
I agree with colleague and male supermodel Saif L. in several areas, although we have conflicting ideals. Saif brings up a great point that a perfectly laissez faire capitalistic society relies on the faith and general knowledge of the people. Consumers won't work together to buy and sell goods when they need to; they will do so when they have the ability to. Once you have a lack of cooperation from the public causing the economy to decline, government will step in as a "consumer" and begin spending to inevitably return society back to its normal state. The only difference is that with some form of a free market, we, the consumers, are given freedom to spend and therefore act on our own accord to buy and sell goods. Hence, a viscious circle of booms and busts is created. A free market causes government intervention and government intervention will cause a rebirth in the free market.
In response to James C, I would disagree. His ideas that Hayek's policy is the better of the two is only supported by his view on government spending. In order to establish a complete opinion on which of the two policies are more effective, it is necessary to look at every part of an economic plan. Though Hayek has good views on government spending, his views that a completely hands off government is wishful thinking.
Ryan S.
In response to Craig's post, I support his statement that government intervention, although necessary, should be limited so it’s not too overwhelming. While we both agree that Keynesian economics is much better than Hayek's, he elicits an interesting thought with this statement. Perhaps, people feel government has pushed too much in the past and will always abuse its power when given the opportunity why, and that is why people have migrated towards Hayek economics. If the government can prove it has the ability to control the economy while not being overpowering we can finally find a method that will work for the long run. However, even without that skill yet, Keynesian economics is still the way to go.
I agree and support the philosophy of Hayek because not only am I leaning towards a conservative economic policy but his system is more natural to how an economy should work. This is because there is less work needed to help the economy because it can work on its own in a period of time. I generally support lower taxes, deregulation and lower inflation. This is appealing to me because it resembles how if a persons hard work and correct timing can lead to prosperity and innovation.
I agree with what Eric G said because from the kensian economic policy today, it has little effect on reversing both the housing crisis and our national dept. Since kensian economics supports deficit spending, extra taxes are needed for fundraising the money. As a result, more people have less disposible income and aggregate demand decreaces. What we must impliment is a policy with less drawbacks such as Hayek Philosophy because the largest drawback is just a resessionary cycle as opposed to stagflation. This is a result of Hayek stating how inflation is worse than unemployment.
I agree with Teddy that government intervention is often necessary to some degree to make sure the economic cycle continues to move forward towards stability abd prosperity. Government intervention should be minimal because as much as it can increase the highs it can also exacerebate the lows.
I agree with Teddy when he says that government is a necessary evil. In times of recession, the government needs to step in and fix the economy. Although many supporters of Hayek feel that the government stepping in gives the government more control than it should have, government intervention is, at this time, the most realistic way to fix a poor economy. Without this intervention a bad economy could easily be dragged out.
I disagree with Khuram in his first post because he clearly contradicts his main points. He states that he supports Hayek, and he believes that the extensive government spending will cause the current economy to continue to struggle. However, he later says that he supports the government spending. Aside from this confusion, I disagree with his belief that Hayek's economic system is better than Keyne's. No matter what, there will be periods of economic problems when either of these two systems are used. The reason Keyne's system is better is because government intervention will help spark a recovery more efficiently than if there was no intervention at all.
I agree with Eric C's comment about how neither systems are perfect, but Hayek can be used in many different economic situations. I also agree that the economy should be let free except in circumstances when government can help fix the economy.
[Late Post]
In regards to who's economic theory is correct, I agree with the notoriously ugly and idiotic Eric C in that there is not one correct theory to choose. Unlike that idiot, I side with Mr. Keynes in that the markets of our economy need to be controlled. Without regulation, we cannot have a properly functioning economy that works well in both rough and easy times. Regulation is a sort of necessary evil, it does not allow for the economy not to run wild and for the people to be at its mercy. Although there is a definite benefit to utilizing Hayek's philosophy in times of high unemployment and high inflation, the Keynesian perspective is just something that makes sense. Things need to be in control, or else they begin to fall apart. Although I may not advocate a sort of micro-managing of industries like the airline industry in the film we watched, I do think some is needed. TO be honest, I cannot say that one side is definitely right so it is hard to give a definite reason for why one approach to economic theory is better than another. But, I must say I lean towards the Keynesian perspective.
Eric G
@Kuhram: Im glad that someone finally brought this point up. FDR did not stop the great depression, a surprise war which over terrible odds we won got us out. Did the government help in WW2 to get us out of depression, yes, but it was still Hayakian forces that corrected the economy. As I stated before, the economy shifts to the tastes of the consumer for the best interest of the consumer. The economy saw that it's people were in danger, so the people (via the government) bought tanks and weapons to defend themselves* (NOTE: the government physically bought the planes, ships, guns HOWEVER, whose money was buying those items of death? *cough* taxpayers *cough*).
Ryan M.
@ Tom "Cotton Headed Ninny Muggins" RamRod Kotak
Unfortunately, I must agree with Tom, as his view is very similar to mine. Neither view is completely effective, and there is a time and place for each of them. Keynesian economics is definitely artificial, as we have seen it only works for a certain amount of time, and unnecessary inflation, much more than what Keynes described as healthy, is created. I do agree with most of what Hayek's theories, except for his aggregate supply and demand curves. In his point of view, the aggregate supply curve is vertical, causing any government intervention to cause an increase in inflation and no change in unemployment. Instead, I believe the AS curve is very steep, but not vertical, because we have seen government intervention solve unemployment.
I would agree with the positions that CJ and Eric G took on this philosophic war on economics...and I would agree with Andrew R for agreeing with my point. Although, it may be viewed as naive to let the economy and markets work themselves out, it is the natural course of the economy to operate in a cyclic nature. As CJ has mentioned "if it ain't broke, don't fix it" because when the government attempts to correct the problems in the economic cycle before they even exist, we often times see ineffective policy or the opposing issue. Although the actions of the American public may have caused the Great Depression, FDR's New Deal did not necessarily "fix" societies economic problems as Teddy has suggested. In fact, up until the US involvement in WWII, the New Deal programs and policies remained only mildly effective; the true healing of the economy came from the United State's maintainence of a wartime economy during its involvement in WWII. I will make a consetion to Keynesian philosophy in that infrequent instances of stagflation and sticky wages do require some form of government intervention to mitigate the hardships felt by Americans; however, it the governments intervention is largely unnecessary and harmful when disrupting the natural cyclic flow of the economy.
That was me, Brian R, above.
I'm going to side with Ted (Just Ted) in that government regulation is necessary and also that Hayek was naive in thinking that the markets could control themselves. History has shown us that a lack of regulation can only lead for "the wickedest of men to do the wickedest of things." We have seen men like Andrew Carnegie and John Rockefeller argue under the guise of Social Darwinism to completely control an industry entirely, limiting the competition that Hayek believed would control the markets. There is no definite system to organize markets, but I would rather invest effort into a system that allows for a peace of mind its consumers.
After reading through Steve G's comment, I must say that I completely agree with him. I also feel that I am a supporter of Keynes, as opposed to Hayek because although government intervention isn't something that we enjoy, it is better than doing nothing all together. I feel that in poor economic times, government intervention may be a necessary evil.
John S
I agree with Ryan S. He agreed with government regulating the economy to sustain stability. I also agree with his statement saying that we should have faith in our government and should have faith in elected officials. This is why voting is so important, because these elected officials have so much influence on the direction of the economy.
Tyler R
- I agree with Keynes because I feel that government intervention is necessary. I feel that Keynes ideas of intervention will stop major damages to the economy. I also think that we are the ones that elect our representatives so we should trust their decisions. I think that Hayek’s idea of letting the economy handle itself can lead to major depressions and recessions. I think that monetary policy and fiscal policy will help stabilize the business cycle.
- I agree with Ryan S because I feel that Hayek has many good points but he won’t allow for economic growth. I also believe that our government officials will make the right decisions and will help our economy grow and develop. Also I feel that government interactions will only limit major depressions and wont allow economic downturns.
After watching the movie in class and reading the above article, I would have to agree with many aspects of Hayek. My belief of having limited to none government intervention in our economy is supported through Hayek's theories. It is my belief, as well as his, that government intervention in our economy would lead to further corruption of our country on a large scale and a complete take over of our country through the economy. Like Hayek, I support a free market economy, and I believe that the economy should stand on its own. A free market economy, where prices would be determined by unrestricted competition between privately owned businesses rather than a totalitarian state of a government. I believe that our economy's health would restore itself through the free market system and government intervention would only risk the positive steps toward improving the health of our economy. In essence, if our economy was able to get itself into a state of failure or negativity, it is capable of getting itself out.
I have to disagree with literally anyone who took a definite side on the issue. If we have learned anything from our economic system it is that no one person can ever be right. Too much Hayek and we have an economy of extremes with the rich generally get richer and the poor getting poorer. If we go 100% with Keynes we have a more socialistic society that is unfair and potentially disastrous in the long run. The only proper way to run an economy is based on the current situation, where in times you ned to abide by Keynes rules and in others you have to abide by Hayek's.
I think Teddy Schneider is handsome, yet wrong. My heart spurs when i look into the deep, deep ocean in your eyes, but you are still incorrect. We need to strive to be an ideal system. The market is a natural beauty, and as you have proven, nature is beautiful. By inflating GDP with government spending, we obscure the actual economic movements and simply cushion the real highs and lows. It is unnatural and ugly to have an economy that maintains positive growth and simply prolongs the eventual downturn. By spending irresponsible amounts of money, the consumer is hurt as taxes go up. Natural progressions in the business cycle correct themselves or indicate a permanent change in output. With the Keynesian approach, a readjustment in the output cannot be identified as the government inflates the economy and prevents permanent change and simply builds up this output with government funds until their impact gives out and we have a massive recession like in 2007. In conclusion, although you are the apple of my eye, Teddles, I cannot accept your view of this subject.
Shawn D.
I completely agree with chris B. I don't think that anyone who is completely one sided and does not consider ideas from both sides can be right. Although i tend to lean more towards Hayek's policy, i can see where occasional government intervention would be necessary as i said before for a multitude of different reasons such as safety standards. The best way to solve a problem is to use all the best ideas together, not just stick to only one side.
I, like the wonderful Chris B, would have to disagree with anyone who took a definitive side on this issue. Hayek and Keynes both had their flaws as well as their upsides, but overall the only kind of system that would ever work for a nation would be one in which we find a happy medium. To allow the market to regulate itself is a wonderful principle until things get catastrophic and having the government step in and help is great until they start to take over. There is no definite here but each has its positives and negatives.
I would agree with Chris B. that no ideology is perfect, however I like Steve's idea of using Keynes' theory in times of desperate need. Some may call this "cry-baby economics" where people want a hands off free market system in times of prosperity and want government intervension and he3lp in times of recession or depression. A major flaw in this use of both ideologies is that when we use Keynes ideas and the economy starts growing, when do we transition? If we keep using Keynes' ideas it can lead to stagflation but if we just stop intervension all together we will have to suffer a intensional recession
kyle k.
I'm not really sure if you can take a specific side in the Keynes v. Hayek arguement of economic ideals because I believe the course of action is directly dependant on the severity of a market's disfunction. In our great depression the free market and unregulated business( specifically the stock market) failed and thrust our country in ecomonic peril as unepmloyment hit all time highs and excess spending on unnessary goods slowed. FDR's New Deal which was based upon the principles of the regulation and control of the market, keynesian ideals, significantly helped our economy get back on track. In recent years within our recession I believe that Hayek's ideas of free market would be best because we are already in substantial international debt which is the consequence of keynsian economics. In closing to restate the theme of my post I beleive that the degree of economic disparity should determine whichever philosophy you would use either keynes or Hayek's as a remedy to an economy because in my opinion in order tohave a postively functioning economy you need to utilize a little of both idealogies.
I have to agree with Chris and Steve as you probably have noticed in my post regarding this topic I fully believe that in order to have a healthy economy you must have some type of combination between both the keynesian and Hayek ideals. In the United States throughout the 20th century youcan see a combination of free market and government regualtional policies shaping our economy and allowing it to grow.
In response to gmayer, I would have to agree that "this is an extremely tough question" to choose between keynes and hayek, because both hold views that are highly regarded by many even though their views are completely different. I would have to, however, respectfully disagree with his leaning more towards keynes though. As he says that the government has many experienced individuals who could help our country overcome the difficult economic times, I feel as though we would be placing too much of an emphasis on individuals who often, yet not always, will look out for themselves and have the capacity to give into corruption, even if it means our government would suffer as a result. Wile the statement claiming that markets and small businesses don;t have enough power to control the economy my be true, is power something that we should really strive for to help our economy? Yes, to some extent a level of power is needed to influence various methods and decisions. However, too my power (like the power of the government) can ultimately lead to corruption, or greed, or even downfall of our economy as a whole.
I agree with the Keynes economic system and not Hayek's system of a free market. I think that when the economy is not doing well, government intervention is needed. Hayek proved many good points, but like the narrarator and many others in " Commanding Heights" said, Hayek didn't have an answer as to what a population should do in times of economic downfall, he just said that the people should let the economy work itself out. On the other hand, Keynes had a more practical theory and said that in a time of economic downfall, government intervention and regulation of the economy should be allowed.
I agree with Arnavi in saying that Keynesian economics is a better and more efficient economic policy for our economy. Although Hayek has helped through some rough economic times, by saying that government intervention isn't needed when the economy is in a rough state, he is giving the assumption that the economy of the U.S. and even the rest of the world can be dependent on its people, some of which don't know anything about the economy or our current economic statistics.
I disagree with Craig.
First Craig, I said I am a liberal but I am not for government spending in the economic sector. The reason which I support Obama stimulus plan is because it's helping on rebuilding old infrastructure which I already stated. Second, Craig should remember that Reagen used Hayek's economic policy in the 1980s recession. Also, Keynes economic plan has yet not worked expect in WWII. Craig's response is invalid.
I think that Hayek is a very conservative Austrian that no one agrees with. Keynes on the other hand has a more liberal way at looking at economics, that in the end makes it more effective. The main reason that I side with Keynes is because I a strong supporter of government intervention in order to regulate the economy. Hayek view on the other hand is very conservative. The reason why its bad is because it never gives a chance for a countries economy to grow under Hayek system. Under Keynesian economic system the economy has a chance to grow and prosper. There are U.S. officials that are so good in the field of economics regulating our polices so that we can prosper. Were as Hayek would sit there and wait for the economy to grow naturally.
Joe M
I agree with Ryan s in numerous ways. First off I agree that Hayek system is a very conservative way of treating a economy, this may lead to slow growth and even long vast periods of economic depression. Once a person is in a depression under Hayek's Economic system it may be very hard to get out because the government can't intervene and help out these business that are struggling. Hayek system is less effective when a economy is in a economic depression.
Khuram I once again disagree. Over the past few months, many aspects of the economy have improved, particularly GDP and unemployment. This has been a result of government spending. You must have been sleeping during the week of the class' presentations not long ago, because I'm pretty sure almost every group showed that for the most part the economy is somewhat progressing as of late.
To Craig.
Yes the economy is improving but like I said before, the economy is picking up is because of Americans are getting more optimistic about the economy, not the government spending. Can you prove the government spending is helping at all? Now be a good boy and remain silent because if you keeping trying to find ways to disagree with me, I won't give anymore physics work for you copy down. Remember the one who gives you good grades on the physics classwork.
Hey Eric B.
How are you today? I am making polite conversation because I am a amiable and respectful human being who does not resort to calling a compatriot derogatory names in order to ridicule their personal beliefs. That being said, you are clearly a nimrod who can't articulate a logical thought (or think one, who knows?) and therefore I will not consider your post as a valid interpretation of the question, but I will humor your and explicate it nonetheless. I must hand it to the buffoon that there must be some sort of control for things to function and not get out of hand, but where he fails to draw the line where too much is too much. Various methods of regulation are fair enough to implement, providing that the purpose they serve is as an air bag or ABS rather than the steering wheel (car metaphor). I am simply stating that when deciding to regulate something, they are doing it as a precaution rather than a way to shrink or cripple any sort of industry.
Eric C, I'm actually horrendous and not feeling too well. I thought you might notice my absence from the tremendous amount of classes we share, but hey an idiot is an idiot and I can't change that. But attacking someone while they are sick and unable to properly respond to your face simply shows your depravity knows no bounds. Yes, I am on the mend now, before you try to make some wise-guy remark about how I’m able to respond to your post. When my honor is on the line and someone calls me a nimrod, all bets are off and I will drop and/or disregard every single thing going on to ensure my reputation is maintained.
However Eric C, aside from your highfalutin vocabulary, (I know big words too!) and poor metaphors made under a guise to appear masculine, I cannot see any real point you make, other than regulate hurts an industry. I would have to disagree with your statement that the "buffoon" fails to say when "enough is enough." The Baron in fact believed in a sort of mixed economy with yes, as much government intervention as possible but also maintained the markets' independence. The markets would be bendable to the will of the government, but at by no means (I believe) did Keynes intend for there to be no competition or rivalries between businesses in industries which allowed for the Hayek ideal of self-regulation. He simply believed that the idea of self-regulation would not work for everything, and the government needed to step in when necessary to ensure a fairness. Now, I take my leave of this hallowed blog in hopes that you take your time next time in forming a response to my posts instead of simply spouting nonsense that distracts from the matter at hand.
I agree with Eric C. because Eric B. is not a nice guy.
I must say that I concur with Rob B., because I also believe that Keynesian economic policy can lead to a state in which people do not see a need to work diligently because a hefty safety net exists. Though with Keynes it is not as much for the benefit of individuals but perhaps that of large companies and the 'commanding heights', it still represents a lack of accountability that is not the right direction for an economy seeking growth and stability. Again, I reiterate my original point that, though there are many merits in the Kenyesian system, overall it is too lax and lacking foresight for proper implementation on a large scale.
Khuram, I'm pretty sure you can't give me hard proof that america's optimism is the reason for the economies progress either. And I don't know what your talking about with physics. I don't copy your work, because I can get better grades without your help. That is all.
To Craig
Yeah right. I do the physics work for you and you act like it's not a big deal.
Kyle k.
I disagree with Joe M, although Hayek’s system may lead to long economic depressions, Keynes’ system does not work in times of prosperity simply because it will cause stagflation, where there is no fiscal policy that can fix that. A country will rebound from a recession by itself naturally but when the government spends money like Keynes’ system suggests to fix unemployment caused by stagflation it will only hurt the economy more by increasing inflation and driving up prices. A deregulated economy is the only way to prevent this and recessions that will rebound are a mere side effect of it.
Greg M.
I would totally agree with Angelina's post. She states that when there are problems with the economy such as inflation or unemployment, no one wants to wait for the economy to fix itself, so they turn to the government which was a Keynesian philosophy. She also mentions that it is the job of these experienced government officials to stabilize our economy so eventually things would work out. Lastly, both her and I agree that Keynes has the slight advantage of the two, but both policies obviously are not perfect. And that it depends on the situation sometimes so each policy will be used in certain situations.
After reading the article and watching the movie, Commanding Heights, I support Keynes and his economic system, because I believe government regulation and intervention can be a benefit to the economy. Hayek policies are beneficial during times of economic stability, but do not work when the economy is struggling. I believe that during a time of inflation or recession, government is needed to help guide the economy accordingly. Left on its own, the economy would take a longer time to rebound and recover. Keynesian economics will allow the economy to grow and prosper.
I agree with Alexandra’s response in that government intervention is definitely necessary in order to have an effective economy. Alex mentioned how in past times of recession and difficulty, government has worked to help the economy advance and recover. Although government intervention is not beneficial at all times, it is very significant in times of inflation or recession. I also agree with Alex in that those who are advocates for Hayek’s system fear socialism and fear government becoming too powerful.
Post a Comment