John Maynard Keynes 1883 1946 Government Economic Intervention

+ John Maynard Keynes (1883 -1946) Government Economic Intervention n Government can help by controlling interest rates n Lower interest rates encourages borrowing and spending n Public work projects (infrastructure) give people jobs and money to spend

+ Article: On Reducing Unemployment, Pg. # 61

+ Questions n What is the most important thing that Keynes is pointing out to political leaders in this excerpt? n Keynes proposes the buried treasure project as a last resort. What projects could governments finance that would be more beneficial? Give three specific examples. n Explain why government financing is necessary in the example described by Keynes.

+ VIDEO: PBS - John Maynard Keynes

+ VIDEO: Keynes vs. Hayek Rap Battle

+ n Milton Friedman (1912 - 2006) Laissez-Faire Capitalism: n n n Education n A free market application to education, i. e. a “privately” as opposed to “publicly” controlled aspect of society. Economic Freedom n n free markets will resolve their own issues without government intervention no minimum wage, eliminate subsidies and social welfare because they favour special interest groups at the expense of the general public and provide little incentive to work. Money Supply n Money supply and interest rates should be used to stimulate and curb economic growth.

+ Article: On Monetary Rule, Pg. # 64

+ Questions n How does Friedman define the money supply, or “stock of money”? n Why does Friedman believe it is necessary to have a rule for monetary policy? What is that rule? n Does Friedman see this as a permanent rule? Explain.

+ VIDEO: BBC – Masters of Money Comparing Marx, Keynes, and Hayek