The importance of Adam Smith, John Keynes, and Karl Marx
Adam Smith
Adam Smith is known as the father of economics. Smith is important for his renowned and firm stand in economic freedom and his key role in uncovering the key to prosperity. Adam noted that the majority of the people were of average income and minimal wages. The rich and powerful were the minority, and their wealth alone could not count as the wealth of the whole nation. Adam further stated that the wealth of a nation could not get measured by the riches of the wealthy and powerful but rather the living standards of the average citizen. To Achieve that, Adam believed, was to give the people financial freedom. Adam encouraged the free movement of labor, capital, money, and goods because it led to economic freedom and a better material life (Mark, 2016).
The realization of economic freedom was a significant milestone in economic prosperity. All members of the society would be enriched not only individually but also collectively to make decisions that suited them best. Economic freedom would evoke a spirit of competition which would lead to a highly prosperous economy. The importance of Adam Smith is seen in his advocacy on natural liberty that led towards free trade worldwide and it is evident in the present day globalization.
Karl Max
Karl Marx was probably the first principal economist to establish his school of thought, with its methodology and specialized language (Mark, 2016). The importance of Karl Marx is seen in his stand against capitalism. He believed that capitalism would lead the economy of a state to stagnate. Capitalism was a term invented by Karl Marx that meant the state where non-labor factors of production, or the means of production, were privately controlled; labor, goods, and capital got traded in markets; owners took profits or invested in industries, and wages got paid to laborers. He advocated for a society where goods and services would be distributed to each according to his their need, from each according to their ability. Through capitalism, the rich were getting richer by exploiting the average working class citizens because they did not pay them for the value they created. Karl Marx advocated for communism whereby the economic system and means of production were socially owned and used to meet human needs, not to generate profits. That important discovery by Karl Marx saw that all people progressed by eliminating class exploitation.
John Keynes
Keynes is vital because of his advocacy for capitalism in which the government was in control. There was a big problem with the rise of full-scale socialism as the only alternative to the unstable capitalist system. As such, there was a need for a more subtle way to introduce Marxism into society. John Keynes said that all that was needed was for the government to take control of capitalism, rather than the private sector, by deliberately running deficits and by spending money on public works that would expand demand and restore confidence (Mark, 2016). Once confidence got restored, John proposed that the government would no longer run the affairs and socialism would take place more efficiently and adequately. According to Mark (2016), the interpretation of John of the depression and of the right policy to cure it must have come like a flash of light on a night. His solution offered a hopeful and more immediate to the crisis that occurred in the transition from capitalism to socialism. John Keynes played an essential role in that he did not propose to overthrow the system as it would lead to chaos and confusion, but instead, he saved it by modifying it using the new system.
References
Skousen, M. (2016). The making of modern economics: the lives and ideas of the great thinkers. Routledge.