(6) John Maynard Keynes vs. (11) Adam Smith

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(6) John Maynard Keynes

When laissez-faire economists fell flat on their face in the late 1920s, there was an opening for a brilliant mind to prompt a sea change in economic thinking. Keynes stepped in and filled it. Eschewing previously favored hands-off policies, Keynes developed a new set of economic theories that postulated that governments could help keep the economy afloat by tailoring monetary and fiscal policies to stimulate employment. His treatise The General Theory of Employment, Interest, and Money was arguably the most important economic text of the 20th century and shaped countless nations' macroeconomic policies.

(11) Adam Smith

The father of capitalism, the Scottish political economist changed the econ game forever when he penned The Wealth of Nations, which made the revolutionary argument that a country's fortunes weren't contingent on its land, but rather on the labor of its workers. By Smith's estimation, if everyone acted in their own self-interest, an invisible hand would drive up society's welfare, too. Or, in his own words: "It is not from the benevolence of the butcher, the brewer or the baker, that we expect our dinner, but from their regard to their own self interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages."

The Breakdown

This debate could get bitter. Which idea do you think works best: the government totally leaving the economy alone or carefully selected demand-side interventions? Keynes' dense, technical prose or Smith's straightforward, occasionally droll stylings? Really, with the way the economy looks now, your opinion is just as valid as anyone's.

[poll=28]

[See the whole bracket here.]

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March 19, 2009 - 5:20pm
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