Adam Smith Vs John Keynes Essay Research
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Adam Smith Vs. John Keynes Essay, Research Paper How can John Maynard Keynes version of capitalism be compared to Adam Smith’s? Both are considered to be the molders and theorizers of the economic era. They are both very different in thinking, one complex the other basic, in there specific time history. John Maynard Keynes has had much of the worlds economic theories based on his beliefs in his most important work The General Theory of Employment, Interest, and Money. During the Great Depression, Keynes, to secure a stable economy, promoted the use of government intervention. However, the idea was said to be deranged be President Roosevelt, he was against spending tax payers money to allow the nation to get into a national deficit. Another theory of Keynes was that the inflation and unemployment were necessary to keep the economy balanced. It can be understood by the fact that too much inflation expresses signs of low unemployment for the nation. Even so, if the unemployment rate is too high then the inflation percentage will pull down the economy to a low percentage too. Because of President Roosevelt decline to use the theory of Keynes until it was too late, his theory was not really confirmed. In spite of that, while his theory was being applied the economy slowly, but surely started to rise. At last, when World War II came along it caused a mass production which boosted the economy from slipping down any future, and allowed companies to rise up from bankruptcy. Adam Smith was one of the earliest of our economists that Robert L. Heibroner talks about. Its seems to me like he was the person that presented capitalism to the English government. Smith was alive during the time that Britain had a hold on the American colonies. It was Smith that directed the King and Queen, and recommended The Crown’s abuse of the colonies would help the homeland and be successful and gain more power. So the colonies were abused and England, because more successful. He also guided the monarch to advise the colonies to pay taxes, which later caused the start of the American Revolution. Anyhow, Americans became free after the war and strangely enough followed the principles of Smith. One of the principles they followed were Supply and Damned. Since the south was agriculture and the north industrial, this helped the nation to prosper on its own and maintain economic balance for while. Smith’s theories also consisted of the belief that government should not get involved with the businesses. He was trying to promote that there should be free enterprise in the midst of the people to keep the economy balanced and successful. At the time of the Great Depression some of the American Economist tried to turn to Adam Smith’s beliefs, but the beliefs that he promoted could not help the declining economy rise up from gigantic weight of the national debt. I have compared and contrasted these two great economist and have a better understanding of their beliefs. If I had to vote on the one I relate to the most it would be Keynes. Keynes seemed to be easier to understand and everything he said seemed to make more since to me. Smith was a little mind numbing and obscure. I didn t agree with his plan. Because of there beliefs, these men will have forever have left their mark on the world of economic history.