THREE BIG NAMES IN

ECONOMICSSmith, Keynes and Marx

THREE VERY IMPORTANT ECONOMISTS: Adam Smith

John Maynard Keynes

Karl Marx

OUTLINE:

Times Life Education Career Key Publications Influence

ADAM SMITH: TIMES

Lived in 1700s, time of great change

Age of Enlightenment: based on rational thinking / reason and science

New ideas, political revolutions

SMITH: LIFE Born in Scotland, in

1723

Father died before he was born

Was absent minded: tanning factory

Died 1790, at 67 years old

SMITH: EDUCATION

Studied moral philosophy at the Uni. of Glasgow and Oxford

Never took or taught a class called economics, b/c it was considered a branch of philosophy at the time

Supported liberty, reason, and free speech

SMITH: CAREER

Taught moral philosophy at Glasgow Later was a tutor, involved travel

around Europe Met other important thinkers when he

traveled Europe Returned home and wrote his

masterpiece, The Wealth of Nations

SMITH: KEY PUBLICATIONS

“The Theory of Moral Sentiments” (1759) Moral / ethical focus Used reason to try to explain human

morality

SMITH: KEY PUBLICATIONS

“An Inquiry into the Nature and Causes of the Wealth of Nations” (1776) Shortened to “The Wealth of Nations” More economically focused Explained that many individual self-

interested actions come together for the good of society

Guided by the “invisible hand”

SMITH: INFLUENCE

Smith often called the “Father of Modern Economics”

Free market, division of labour, and invisible hand ideas had a huge impact on economics

Was well respected in his time and from then on. Wealth of Nations sold very well when it was first released.

SMITH: QUOTE

“It is not from the benevolence of the butcher, the brewer, of the baker, that we expect our dinner, but from their regard for their own interest.” – Adam Smith

JOHN MAYNARD KEYNES

KEYNES: TIMES

Late 1800s to middle of the 1900s

Also a time with a lot of changes in the world

Important events include both World Wars and the Great Depression

KEYNES: LIFE

Born 1883 in Cambridge, England Had a good relationship with his

parents Very intelligent man Optimistic, confident in himself, and in

gov’t officials to do good Died 1946, at age of 62

EDUCATION

Focused on math at Eton College and Cambridge Uni

But also studied philosophy and economics

KEYNES: CAREER

Lectured in economics at Cambridge Worked for Treasury Department during

WWI Sent to Versailles Peace Conference as

TD rep. Was very unhappy with results of the

conf. Also very interested in causes of

recessions and depressions, and what solutions existed

VERSAILLES PEACE CONFERENCE

KEYNES: KEY PUBLICATIONS

“The Economic Consequences of Peace” (1919) Predicted negative effects of the Treaty of

Versailles, including the possibility for war

KEYNES: KEY PUBLICATIONS

“General Theory of Employment, Interest, and Money” (1936) Importance of aggregate demand May require gov’t intervention to break

cycles of low employment (e.g. spending on projects, reducing taxes…)

KEYNES: MAIN IDEA

KEYNES: MAIN IDEA

KEYNES: INFLUENCE

Strongly influenced many economists and politicians, esp. from the end of WWII to about the 1970s

Ideas may have been less popular for a while, but have come back since the recent economic crisis

KEYNES: QUOTE

“The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood.” – John Maynard Keynes.

KARL MARX

MARX: TIMES Lived during the 1800s

Industrial Revolution was going strong; many changes in people’s lives and thinking

Including more concern for living standards and treatment of workers

MARX: LIFE

Born 1818 in Prussia (Germany) Of Jewish descent, but raised Christian Had 7 children with his wife, but only 3

survived Wasn’t good with home finances Was forced to move around Europe a

lot Died 1883, at age of 64

MARX: EDUCATION

Studied law at Uni. of Bonn, but drank too much and got poor grades

Moved to Uni. of Berlin, and became more interested in philosophy and history

Doctorate from Uni. of Jena

MARX: CAREER

Worked at times as a writer for newspapers, and as an editor

Mostly focused on study and writing about his ideas about history, economics, and class struggle

MARX: KEY PUBLICATIONS

“The Communist Manifesto” (1848) Co-authored with Freidrich Engels, though

Marx was the main theorist Tried to explain the history of economic

systems, and predicted that capitalism would fall, to be replaced by socialism

MARX: INFLUENCE

Ideas had a huge influence on world history and how people thought

Greatly influenced communist leaders: Mao and Stalin both claimed to be heirs to Marx

However, Marx would probably not have agreed with many of the things these men did in the name of “Marxism”

MARX: QUOTE

“The history of all previous societies has been the history of class struggles” – Karl Marx

SUMMARY

These three men, Marx, Keynes, and Smith are among the most important contributors to modern economic thinking

Smith and Keynes are more important for free market / capitalist thought

Marx has influenced world history, and his ideas are used by sociologists and philosophers, among others

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