In order to understand how economics really work in today’s age we must think about how those economic ideas, revolutionary theories of many economists, that helped to shape the economic structure as we know it now, through many individuals and school of economic though that has existed through the ages. These schools are “the mercantilists, the physiocrats, the classical economists, Marxian economics, the neoclassical economists and the monetarist economics. For this essay I will only refer to the classical economists and the neoclassical economists.
The two most influential economists that helped to shape our economy with their thoughts and theories that are still used in modern economy are Adam Smith a classical economist and John Maynard Keynes a neoclassical economist. These two economists are the most famous economists of all times. Even though that its known that their thoughts are opposites to one and other they also share some similarities for example as suggested by (Stephen Yearwood. (2013)) “Both understood that the key to economic prosperity is to keep the money circulating.” They both According to (Greydark (2009)) Demonstrated “that the field of economics is vast, flexible, and able to be interpreted in many ways.” Each influenced the growth of economic thought and birth of modern market based societies. According to (best brielle. (2010)) “Each economist has similar ideas yet different opinions that distinguish them as economic leaders”.
Adam Smith, is known as the Father of economics, Capitalism and advocate of free market also known as laissez-faire. His theory of invisible hand of free enterprise and his 1776 Wealth of Nations is what he is most admired for, also the canons of taxation, labour theory of value, the division of labour, lastly he distinguished between production and non-production labour and value in use and value in exchange. Whereas John Maynard Keynes, is known as the Father of the Mixed Economy, and is known for Keynesian Economics. He advocated fiscal policy as the main method of controlling the economy, developed and explained the theory of multiplier, developed the liquidity preference theory of interest rates and showed that savings and investments were not always equal to each one and other.
The classical economists were mostly English economists in the 18th and 19th century and they were the first real economists. One of the most famous classical economist is Adam Smith. Adam Smith was Scottish born in 1723 and died in 1790. He was the most influential economist and it could be said that he is the father if classical economics. Adam Smith had developed many economic theories that are still used to this day, many of his books had made a great impact on the development of economic thought. The main publications that Adam Smith had written are Theory of Moral Sentiments and An Inquiry into the Nature and Causes of the Wealth of Nations, both are of great importance.
Most of his influential theories can be...