Research On Economists

John Maynard Keynes-

He was born June 5th 1883 in Cambridge and died April 21, 1946. Keynes was born into a
moderately prosperous family. His father too was an economist and later an academic ad-
ministrator at King’s College. His mother was also one of the first female graduates of the
same university which Keynes also entered in 1902. Firstly , Keynes had an interest in
mathematics and the classics. However , an economist by the name of Alfred Marshall
prompted Keynes to shift in interests more into politics and economics. After graduating ,
his first job was in the India Office as an economic analyst. He then became the financial
manager of Britain’s war effort during WW1 and then the country’s chief economic repre-
sentative to the United States. Keynes is most famous for what is known as Keynesian
Economics. It was developed in 1930 by Keynes in an attempt to understand the Great
Depression. The broad definition of Keynesian Economics is an economic theory of total
spending in the economy and its effects on output and inflation. Keynes advocated for in-
creases government expenditure and lower taxes to stimulate demand and consequently
pull the global economy out of the depression. Stimulating demand is known as a demand-
side theory that focuses on changes in the economy o the short term. This was a basic in-
troduction to what is now known as fiscal policy. Keynesian economics was used to refer
to the concept of optimal economics performance which meant presenting economic
slumps and influencing Aggregate Demand in the economy by economic interventions and
government policies.

Adam Smith-
Adam Smith was an 18th-century Scottish economist, philosopher, and author, and is con-
sidered the father of modern economics. He attended the University of Glasgow at the age
of 14 studying moral philosophy. He later attended Oxford and graduated with an exten-
sive love for European Literature. He then returned to Scotland where he gave numerous
lectures in Edinburgh where the success of these lectures earned him a professorship at
the University of Glasgow. He then published his first book.
In his first book, "The Theory of Moral Sentiments,"Smith proposed the idea of an invisible
hand—the tendency of free markets to regulate themselves by means of competition, sup-
ply and demand, and self-interest. This meant he believed in free markets fixing them-
selves over time and the government not needing to intervene to fix them. Smith was also
known for creating the concept of GDP and his theory on compensating wage differentials
which proposed that the more difficult or dangerous jobs pay higher wages in order to at-
tract workers to that position. These together helped him form the basis of classical eco-
nomics. In 1763 Smith moved to France where he took up a job as a personal tutor for an
amateur economist. Although Smith greatly believed in minimising government interven-
tion, he believed that the government should be responsible for defence and the education
as these parts may not necessarily be maintained if left to run privately. A wealthy nation is
one where it is populated by citizens that work to better and help their financial needs.
Smith suggested that within a nation like this, a natural phenomenon known as the invisi-
ble hand theory would guide free markets and capitalism in the direction of efficiency
through supply and demand and competition for scarce resources. The ideas promoted by
Smith’s book also lead to the development of the assembly-line production method. The
analogy used of the pin helped understand the importance of such a method in manufac-
turing. For example, if one person carried out all the 18 steps required to make a pin , then
the output would be very little however if all the 18steps were spread along an assembly
line with 10 people , then the output would boost into the 1000s. Many of his theories are
still relevant today and now we see modern day manufacturing using the assembly line
method as one of its main ways to maintain efficiency. We study the different types of mar-
kets in macroeconomics, free markets being one of them and understanding why they
came about is helpful to understanding them.

Karl Marx-
Karl Marx was born in 1818 and was an economist , philosopher, author and social theo-
rist. He was inspired by the likes of Adam Smith and David Ricardo. Karl Marx was the son
of a jewish lawyer and was born in Germany where in studied law at first and then was
later introduced to philosophy. His main theory of Marxism is now looked down upon in
modern economics as the western ideology is more praised and used. At the time of de-
velopment , it was war time and so government intervention and communist ideas had to
be implemented to keep the country going. The communist manifesto developed by him
outlines why he thinks capitalism is unsustainable and that it would eventually be replaced
by a socialist one. Karl Marx also believed in the labour theory of value where the amount
of labour put into the production of a good would determine its value. For example, a table
that took 20hours to make would be twice as valuable as a table that took 10hours to
make. This theory stated that the value of a produced economic good can be measured
objectively by the average number of labor-hours required to produce it. Karl Marx died in
1883 of bronchitis.

David Ricardo-
David Ricardo , born in 1772 managed in his lifetime to achieve both tremendous success
and long- lasting fame. He was firstly disinherited by his family because he married outside
his Jewish faith. Ricardo made a fortune as both a stock and loan broker. When is 1823
when he died, his estate was worth more than 100 million dollars in today’s money. At the
age of 37 he read Adam Smiths,’The wealth of nations’ and became seriously excited with
economics as dedicated that remaining 14 years of his life to become a professional econ-
omist. Ricardo first gained notice by other economists in 1809 where he proposed that
England’s inflation was caused by the bank of England printing too many bank notes. He
was an early believer of the quantity theory which is more modernly known as monetarism.
Ricardo articulated what came to be known as the law of diminishing marginal returns.
One of the most famous laws of economics, it holds that as more and more resources are
combined in production with a fixed resource—for example, as more labor and machinery
are used on a fixed amount of land the output will diminish. Also , when Ricardo was argu-
ing for Free Trade, he came up with the concept that is more modernly known as compar-
ative advantage which is the main basis for most economist’s belief’s in free trade today.
John Stuart Mill-
John Stuart Mill was born in 1806 and was son to the economist James Mill. He was
taught Greek at age three and Latin at age eight. After departing from the economic views
seen by his father, he then decided to explore his own views on the political economy. In
‘Principals of Political Economy’ he elaborated on the ideas of David Ricardo and Adam
Smith. He helped discover the ideas of opportunity cost , comparative advantage and
economies of scale. Mill was a strong believer in Freedom and he believed that without it ,
society’s utility wouldn’t be maximised and a person could also not develop personally
without being able to make their own choices. Interestingly , Mill believed in mandatory ed-
ucation but not in mandatory schooling , he believed the pupils should be educated to a
certain level. Mill spent most of his working life with the East India Company. He joined it
at age sixteen and worked there for thirty-eight years. He had little effect on policy, but his
experience did affect his views on self-government. We have studied a lot of the concepts
that Mill proposed in GCSE but we will also look closer into them in A-level which makes it
useful to our A level study. Also some of his key concepts are definitely still looked up
upon and are used in modern day society such as opportunity cost.

Friedrich Hayek-
Friedrich Hayek was a twentieth-century economist born in 1899. He made fundamental
contributions in political theory, psychology, and economics. In a field in which the rele-
vance of ideas often is eclipsed by expansions on an initial theory, many of his contribu-
tions are so remarkable that people still read them more than fifty years after they were
written. This shows that many of his theories are still very applicable to the modern day.
Hayek was the best known advocate of what is now known as Austrian Economics. After
WW1 Hayek earned his doctorates in law and political science in the University of Vienna.
Most of Hayek’s works during the 1920s and 1930s were about Business cycles , capital
theory and monetary theory. He famously argued that the main reason for an economy to
have problems is how the people’s actions are coordinated. He noticed that Adam Smith
who had the price system did a remarkable job of coordinating people’s actions. The mar-
ket, said Hayek, was a spontaneous order. By spontaneous Hayek meant unplanned—the
market was not designed by anyone but evolved slowly as the result of human actions. But
the market does not work perfectly. One reason he said was due to the increase money
supply which in turn drove interest rates down which would promote more investment by
business made but this wouldn’t happen if they knew why the interest rates were going
down. Hayek believed that Keynesian policies to combat unemployment would inevitably
cause inflation, and that to keep unemployment low, the central bank would have to in-
crease the money supply faster and faster, causing inflation to get higher and higher. He
died at the age of 93.