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Imani Stoughtenborough
Economics
Mrs. Dunham
12 October 2015

Keynes vs. Hayek: Whose theory is better?

John Maynard Keynes and Friedrich August (Von) Hayek were two economist that had different
aspects during the Great Depression. Keynes was influenced by Adam Smith and Karl Marx while Von Hayek
was influenced by Ludwig von Mises and Karl Popper. Hayek believed in having free individuals which
means that the government is not involved in anything. Keynes believed in having a study and fair economy
with the government involved. Which one do you agree with?
Von Hayek believed in letting the economy fix itself without the government involvement. He was an
industrial capitalist and Hayek didnt believe that it was possible to spend your way out of an economic crash.
After the British economic crash in the 1920s, he promoted the idea of a private investment, other than the
government spending, would promote a liable growth to the economy. He won a Nobel Prize in 1974 in
Economic Science.
The one person that I highly agree with is John Keynes. Need to cite your sources!
Keynes most valued belief is that the economy wont naturally restore itself. His prime motive for this
belief was that saving and investing are determined autonomously. He also states that it is the government's
responsibility to come in and use many devices at its disposal which would result in investment and
consumption. This means that through rigid times, the government needs to cut spending in order to nourish
activity. It would lead to policies like the reduction of long-term interest rates, public works projects, and
infrastructure on spending.

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The presidents who believed in the Keynesian view was Barack Obama, Richard Nixon, and Bill
Clinton. The other presidents who were based on Hayek's theory was George H.W Bush, George W. Bush and
Ronald Reagan. To me, I didnt think the presidents with Von Hayeks view didnt care how the economy is
or how it was going to be. They only cared about how the people would react to their decision (which was
glad) to cut taxes and spend less on wars. Without the takes, We wouldn't be as safe as we are now. What I
mean by that is like people taking over our country.

Imani,
I can tell you have a basic understanding of the positions. 100/100

Cites:

Bibliography
Keynes v Hayek: Two Economic Giants Go Head to Head - BBC News. BBC News. Web. 12 Oct.
2015. <http://www.bbc.com/news/business-14366054>
Bibliography
Keynesian Economics. : The Concise Encyclopedia of Economics. Web. 13 Oct. 2015.
<http://www.econlib.org/library/enc/keynesianeconomics.html>

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