Essay on Economic Philosophies

528 Words 3 Pages
Economic Philosophies

How much should we let the government interfere with our economy? Do we trust the government to take on the enormous responsibility of caring for our economy? Our economy is a precious thing and we must take great care of it, for it can make us powerful and prosperous or it could be the demise of our nation. Three economists – Karl Marx, Adam Smith, and John Maynard Keynes – all had opposing views on how much government interference should be present upon the economy. Karl Marx believes that the government should control the economy. This means that every aspect of the economy is controlled directly by the government. Marx says that if the government plays no part in the economy, then the economy will
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Adam’s idea of society is that each person can do whatever they want to advance themselves and each person can pursue happiness in whatever fashion they believe to be the best. Technology creates new and better ways to do things which allows society to grow and become more advanced. Smith says that new technology creates new jobs by expanding the limits of manufacturing and science. With new technology people can do things they never could do or even imagine before. Adam Smith says that the government should stay out of the economy all together. The economy is like a boat – it goes up and down. Smith believed that the economy would fix itself; therefore, the government shouldn’t interfere with the economy. He said one has to have “faith” because the economy will fix itself. Things may not be going great right now, but the economy will rise on it’s own. The result is graphically represented as a vertical aggregate supply curve.
John Maynard Keynes believed that it was necessary for the government to intervene in

the economy. He felt the government played an essential part in maintaining the economy and

keep it from going into a depression. The Keynesian view sees the causes of unemployment and

inflation as the failure of certain fundamental economic decisions. Also, product prices and

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