Keynes Vs Hayek

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An economy is an endless series of variables in which we do not fully understand, and cannot understand with a simple equation or a design. Keynes and Hayek were both economists, during the 1930s through the 1940s, who had different ideas on how to run an economy. Keynes and Hayek had conflicting beliefs which led to a friendly rivalry between the two. Keynes believed that Aggregate demand, which is the total amount of goods available for consumption, is the driving force in a healthy mixed economy. This belief proved to be more popular as it increases the amount of consumption an individual could participate in. Keynes also believed that the government should play an active role in the economy. On the other hand, Hayek believed in a free market economy, meaning that the government should play little to no role in the regulation of …show more content…

This theory creates greater competition between businesses. I belive that Hayek’s theory would be a better choice for an economy rather than Keynes mixed economy. I belive that a free market economy is superior to a mixed economy for several reasons. A free market economy will spur competition between businesses as there is little government interference. This competition is healthy for the economy and is a basis for the ideas of capitalism. Less government regulation will promote more entrepreneurs to take risks in order to create successful businesses. These new businesses will create employment opportunities and pay taxes to the government which will further stimulate the national economy. This idea of a free market has helped many nations to recover from economic downturn. After WWII Britain's economy was in shambles. Keith Joseph was a politician during this time who suggested that if Britain were to institute a free market economy it would bring the country

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