Nether Keynes Or Hayek Battle-Who Is Right?
1. Keynes v Hayek Battle- Who is right?
Nether Keynes or Hayek seems to be 100% on the mark with their theories. Keynes favored the heavy hand of government in economic policy and how it should be treated. This also led to a period of time of the greatest growth from the mid 70’s to the 90’s. This also lead to the crash of 86’ and the recessions in 83-85, 86-88, 90—92 and allowed for legislation to be passed (‘96 Dodd, Schumer and Frank housing bill) that created the housing bubble that burst in 2008. It could be also argued that this type of economics contributed to the tech bubble in the late 90’s. The fundamental ideal of forcing loans to be made and borrowing with no securing capitol in place and printing more money to cover what was being paid out is the folly of having a governmental controlled economy, bringing us closer to a what in turn will become a socialist society.
While Hayek on the other hand olds fast to the libertarian Laissez Fare attitude that calls for only small adjustments of the market. He believed that the economy would correct itself if it needed. His backbone to this belief was that if there needed …show more content…
to be corrections that the market would do it naturally because it was a living thing and not an automated machine like what Keynes thought it was. Although this is correct that the market will have corrections and heal itself from whatever ails it is how fast and by how much it is done that is unpredictable that causes loss of faith in the system. Most recently was the correction in August thru September of this year in the DOW Jones and the almost 1000 point loss over the course of this year that tells us that through self-regulation only more doubt and uncertainty remains with Hayek’s theory’s.
Since 2008 the U.S.
has taken what aperies to be a more hybridized of the two philosophies going forward leaning more to the Keynesian thought process of borrowing printing and spending cash. Not seeing immediate success and trying something else just as fast without allowing the time for the full effects to be seen (10 years). I personally believe that they are both right in that the market will find the balance that will change and adapt as demands and needs of consumers and investors change. However, it should never be taken for granted that through the intrinsic goodness of a businessman or investor that they will temper their wants with the greater good of others avoiding conspicuous consumption. Therefore some checks and balances must be in place and reviewed by the government for the good of only the parties directly
involved.
Nether Keynes or Hayek seems to be 100% on the mark with their theories. Keynes favored the heavy hand of government in economic policy and how it should be treated. This also led to a period of time of the greatest growth from the mid 70’s to the 90’s. This also lead to the crash of 86’ and the recessions in 83-85, 86-88, 90—92 and allowed for legislation to be passed (‘96 Dodd, Schumer and Frank housing bill) that created the housing bubble that burst in 2008. It could be also argued that this type of economics contributed to the tech bubble in the late 90’s. The fundamental ideal of forcing loans to be made and borrowing with no securing capitol in place and printing more money to cover what was being paid out is the folly of having a governmental controlled economy, bringing us closer to a what in turn will become a socialist society.
While Hayek on the other hand olds fast to the libertarian Laissez Fare attitude that calls for only small adjustments of the market. He believed that the economy would correct itself if it needed. His backbone to this belief was that if there needed …show more content…
to be corrections that the market would do it naturally because it was a living thing and not an automated machine like what Keynes thought it was. Although this is correct that the market will have corrections and heal itself from whatever ails it is how fast and by how much it is done that is unpredictable that causes loss of faith in the system. Most recently was the correction in August thru September of this year in the DOW Jones and the almost 1000 point loss over the course of this year that tells us that through self-regulation only more doubt and uncertainty remains with Hayek’s theory’s.
Since 2008 the U.S.
has taken what aperies to be a more hybridized of the two philosophies going forward leaning more to the Keynesian thought process of borrowing printing and spending cash. Not seeing immediate success and trying something else just as fast without allowing the time for the full effects to be seen (10 years). I personally believe that they are both right in that the market will find the balance that will change and adapt as demands and needs of consumers and investors change. However, it should never be taken for granted that through the intrinsic goodness of a businessman or investor that they will temper their wants with the greater good of others avoiding conspicuous consumption. Therefore some checks and balances must be in place and reviewed by the government for the good of only the parties directly
involved.