Monday, May 2, 2011

Music Mondays - Keynes vs. Hayek

Normally the theories behind economics are enough to make one's head spin, and normally economics wouldn't fall under the subject matters discussed on my blog, since I tend to stick to less "substantial" topics.

I also realize that this might seem like Vanilla Pudding in comparison to certain current events.

However, when I stumbled onto this I couldn't resist. It was both fun and intellectually stimulating, which is a combination anyone is hard-pressed to find on the internet these days.

It's basically an economics rap battle (Yes, you read that correctly: an economics rap battle) featuring the simplified theories of probably the two greatest Economists of the 20th century, Friedrich Hayek and John Maynard Keynes:

Hayek is best known for his Nobel-winning theories on the Economic Calculation Problem. To sum up (if I've understood correctly), he believed that centrally-controlled economies (like socialism) were faulty because when the government controls all resources there is no way for a small group of people to always fairly determine how to give out these resources. Instead, free market prices should dictate how resources are spread around. He advocated little government involvement outside the rule of law and what he called a "safety net" which is basically social security.

Keynes (left) and Hayek (right)
Keynes is best known for the Economic revolution he started by encouraging governments to engage in deficit spending to stimulate the economy. His idea was that government involvement could affect the rate of employment - which was a completely new idea at the time. There is much controversy surrounding his theories and their interpretation, however, since many people believe that since his death in 1946 many people have twisted his ideas or haven't interpreted them correctly.

The above video is actually a follow-up to this original, which better explains their general theories:

My mind has imploded from knowledge. I therefore have nothing more to say.
Peace out,

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