Keynes Versus Friedman Essay Example

a prolonged period. However, Keynes's ideology began to be implemented as it highlighted the potential danger of unemployment on the economy over a sustained period.

Proposing a simple yet extreme solution to the problem, he suggested creating numerous jobs, even if they were low-effective, to keep people occupied and away from their problems. He also recommended taking control over major companies and increasing production to keep the funds circulating. Nationwide manipulation of the interest rate was deemed necessary to stimulate the banking sphere. Following these basic regulations for government involvement in the economy facilitated a rapid improvement in the situation.

The peak of Keynes' economic philosophy occurred in the latter stages of his career. During this time, he uncovered a significant error made by classical economists who believed that, during times of surplus, it was best for the government to permit wages and prices to decrease until a state of equilibrium was reached. This tactic was thought to stimulate consumption due to the idea that supply would generate demand. Contrarily, Keynes advocated that government spending was key to encouraging consumption. To illustrate this point, Keynes formulated complex arguments utilizing his own innovative concepts and jargon, including "multipliers," "the marginal efficiency of capital," and "liquidity preference."

One of his significant accomplishments was the implementation of the Employment Act of 1946, which expressed the following: "The Congress hereby acknowledges that it is the continuous policy and responsibility of the Federal Government to promote maximum employment, production, and purchasing power." Milton Friedman, an American Nobel Laureate economist and public intellectual, was regarded as the only opponent equal to Keynes' proficiency in debate. Despite being a passionate advocate of economic

liberty, Friedman made significant contributions to the areas of macroeconomics, microeconomics, economic history, and statistics. (Source: Keynes Was Right by Paul Hein 2002 by LewRockwell)

The source of information for Milton Friedman can be found on the website http://www.lewrockwell.com/orig3/hein6.html, as stated in Alan Walters' A Dictionary of Economics in The New Palgrave, Vol.The website link http://60gp.ovh.net/~novacivi/friedman.html is displayed within HTML paragraph tags.