[pic] [pic] [pic] Money Makes the World Go Round By, Chris Jarrett 4-11-11 Period 3 Money makes the world go round. If you know how to deal with money, you’re probably better off than someone who doesn’t. There are three significantly influential economists that helped change the way we look and think about money and the economy; Adam Smith, John Keynes, and David Ricardo. These men all came up with economical theories that we still study today, including the Invisible Hand, Government Intervention, Theory of Rent, and various others.
Adam Smith who lived in Scotland during the 1700s thought of many different economical theories. One of them was the Invisible Hand. The Invisible Hand theory boils down to saying that the economy will adjust to the needs of buyers and sellers over time. “The theory of the Invisible Hand states that if each consumer is allowed to choose freely what to buy and each producer is allowed to choose freely what to sell and how to produce it, the market will settle on a product distribution and prices that are beneficial to all the individual members of a community, and hence to the community as a whole. (Wikipedia). Adam Smith didn’t agree with government intervention. He thought that the government should not be involved in the economy system and that people should fend for themselves, kind of like they do today in Hong Kong. Adam Smith’s idea of self interest states that “in the act of observing others makes people aware of themselves and the morality of their own behavior. ” (Wikipedia). In other words, that means that when people study and look at other people’s choices and actions, they are able to become more aware of themselves and make better choices.
All in all, Adam Smith was an economist that had great ideas that are still being talked about today. Another recognisible economist is John Keynes. While Adam Smith was against government intervention. Keynes was for it. He explains that without government intervention, the economy would stay trapped with low emloyment. In a way, Keynes is correct because the government helps provide many things that are much needed. The government employs all of the city workers such as teachers, firemen, policemen, anad politicians.
The government also helps some large companies from going bankrupt by providing money for them to keep operating. Keynes also explains that the government can help reduce unemployment levels by creating more jobs. To summarize, John Keynes was an econimist who mainly thought the government should interven when needed. A final inportant economist is David Ricardo. Ricardo had a lot of ideas about trade and international trade. He believed that trade could not hurt an economy, but only benefit it.
He says that there should be no restrictions on trade, that people should just leave it to compitition. Ricardo also came up with an idea about rent. He states that rent is “the difference between the produce obtained by the employment of two equal quantities of capital and labour. ” (Wikipedia). This basically means that when there are multiple properties, rent will be charge on the more expensive ones, rather than the cheaper ones.
In a word, Ricardo was an exception economist that had many ideas about trade and rent. Out of all these economists, the one that I would agree with the most would have to be John Keynes. His ideas about government intervention are reasonable and practible. I believe that the governmen t is here to help us, especially in complicated areas such as the ecomony. The government should help companies that are about to go bankrupt because they’re not just helping the company, but theyt are helping the workers.
I think that all schools should be taught about all three of these economists, but mainly about John Keynes. Money is everywhere. Everything you use, eat, or touch was bought with someone’s hard earned money. In today’s tough economy, it is important to learn and study how money and economics work. That is exactly what Adam Smith, John Keynes, and David Ricardo did hundreds of years ago when they came up with their theories, and that is exactly what economisists are doing today. Bibliography Wikipedia. Web. 10 Apr. 2011. .