Keynes vs. Smith

Keynes vs. Smith

  • Submitted By: nate
  • Date Submitted: 03/08/2009 6:00 PM
  • Category: Philosophy
  • Words: 389
  • Page: 2
  • Views: 580

What is our government’s responsibility in respect to our economy? Should our government assume the role of big brother and regulate economic policies as it sees fit? Or rather, stand passively in the shadows as CFOs polish their creative writing abilities at the expense of Main Street residents? It is highly probable that the appropriate question to be asking is not what belief is superior, but preferably, what is the optimal combination between the two beliefs in order to keep the economy healthy?

It is possible that this credit crisis these past couple of months has changed the way many view government’s role in our economy. In fact, it possibly will be said that this monetary disorder may be the result of too much government withdrawal. Smith’s “laissez-faire” is intended to provide the government a small economic role, while allowing spending to be determined by firms and individuals. However, a greater presence of government regulation to over see business practices might be necessary when attempting to prevent any repeats.

One might also take into consideration as to why a lack at government regulation appeared to be politically acceptable in the first place. Until recently, the Keynesian view was essentially neglected. Businesses and individuals demanded less government involvement, and the government obliged. One can conclude that businesses and children act very similar when unsupervised; they have a tendency to get into mischievous situations. And now we are in the role of the unsuspecting parent, forced to rectify the situation, and perhaps divvy out some discipline in order to re-establish economic stability.

So, what is the solution? Well, it can be argued that in order for our economy to restore confidence, businesses will need regulations that fail to hinder their ability to become profitable. Reducing taxes coupled with government investment for companies who meet and exceed the regulatory guidelines, provide a secure safety net for...

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