If you are fascinated with economics, Masters of Money, is a really good series by the BBC portraying 3 of the most influential economists of the 20th century, John Maynard Keynes, Friedrich Hayek, and Karl Marx.
Set against the backdrop of today’s recession, the series examines in lamens terms, the theories of these men and how their view on the economic crisis of their time shaped policies and politics around the world.
The two distinct camps are that of Keynes and Hayek. Keynes view that government intervention during a recession is necessary to aid recovery is vastly different from Hayek who believed that the economy worked best when left alone and was free to trade. Government intervention only served to create bad policies that hindered the economy and its recovery from a recession. Hayek believed that during times of heightened boom, bust was inevitable and the cycle flushed out the good from the bad companies.
Today, we have seen our governments prop up the finance sector to survive in hope that it would aid recovery and serve to create jobs. I wonder if Keynes’s theory is most favoured by government economists because it allows them to feel like they have some control and power. Could it have been possible to adopt Hayek’s thinking? To allow RBS, Northern Rock and others to just go bust rather than saving bad eggs? We will never know but I would guess not and it boils down to control and demonstrating to your public that you have the answers to save the economy.
Lastly, Karl Marx, who believed that capitalism itself would create the most unrest and instability as workers would not be able to afford the goods their bosses were trying to sell to them. His answer, communism. A radical form of thinking that only countries who have sought to totally control their population have adopted. Probably not the best answer to today’s economic crisis but his theory crucial in shaping the 20th century.
If you missed the series you can catch it on BBC Iplayer.