Introducing
Your new presentation assistant.
Refine, enhance, and tailor your content, source relevant images, and edit visuals quicker than ever before.
Trending searches
John Maynard Keynes Philosophy
Adam Smith's Philosophy
The philosophy of Keynesian economics consists on the idea that during the short run, the total spending in economy or aggregate demand strongly influence GDP. This point of view applies especially for recessions. The philosophy was developed during the 1930s by the British economist Maynard Keynes to understand the Great Depression. Keynesian economics defend the increase of government expenditures and lower taxes to stimulate demand. If aggregate demand in the economy fell, this would create a weakness in jobs and production that would lead to a decline in prices and wages.
Adam Smith is considered the father of modern economics. Smith’s concept in economics covered the topic that the individuals in society, each acting in his or her own self interest, manage to produce and purchase the goods and services that they as a society require. He called his theory “The Invisible Hand.” In this case the free market economy is in action. Each business will produce as much as they want, and each individual will buy what they need, and all of this happens without businesses consulting one another or without all the king’s men telling them how much to produce. He also believed in division of labor because if many individuals worked together they would get more done and this would profit and better the economy.
In “The Wealth of Nations” Adam Smith said that the wealth of a nation consisted of the goods and services by that nation rather than the amount of gold and silver possessed by that nation.
"No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable"
"All money is a matter of belief"
Adam Smith and John Maynard Keynes were two of the most famous economist of all time. They each had different opinions about the economy, but they did share the same insight of keeping the money circulating.
Smith believed that there should not be any government interference in the market, while Keynes believed that the government intervention was necessary in times of economic crisis. Smith was a very strong advocator of the idea of laissez-faire, on the other hand Keynes argued that the government should solve problems in the short run rather than wait for markets to correct themselves in the long run.
Vs
The philosophy of Maynard as well as Adam’s were very helpful to the current economy. Not to say that it is perfect but, we at least are not as bad as we used to. They developed strategies that helped balance all the things that were happening. During bad times they had different ways to solve it and in some way helped. Due to their ideas we are able to develop new strategies that could help us in the future to prevent a second Great Depression.
Adam Smith
John Maynard Keynes
How did they affect the world?
Keynes’s theory stated that the interaction of aggregate demand and aggregate supply determined the level of output and employment. Smith believed that the level of employment depended on the amount of capital stock and in the way it’s employed.
Keynes believed that government intervention is necessary to stabilize the economy or bring the economy out of recession.
Keynes was one of the fathers of modern theoretical macroeconomics theory and one of the three most important economist of all time along with Adam Smith. Keynes ideas were dominant framework of classical economics and influence both economics and fiscal policy for western governments. His ideas also began to gain favor during the Great Depression then influenced American and British governments, but his ideas did take time but eventually gained ground and became a dominant school of economic thoughts for the next 40 years and were called “ Keynesian Economics."
John Maynard Keynes VS Adam Smith