Three Schools – Three Names

The so-called Keynesian school originated with famous British Economist John Maynard Keynes (1883-1946). Keynes published The General Theory of Employment, Interest, and Money in 1936 and by 1941 his ideas came to dominate economic thinking in much of the West.

Monetarist school was popularized by Milton and Rose Friedman and is also associated with the so-called “Chicago School” from a group of economists at the University of Chicago. The Friedman’s 1980 book, Free to Choose explained, among other things, his thinking about the importance of the quantity of money.

The inflation of the 1970’s caused the Chicago school to overtake the influence of Keynes around 1980, but Keynesian thinking has made a comeback in the recent financial chaos.

The Austrian School comes from Ludwig von Mises, Friedrich von Hayek, and others.  They influenced the Chicago School, but have never found much favor in government, probably because they do not favor government intervention in the marketplace.

Government intervention always has unintended consequences!  Click here for a short article that demonstrates a perfect example. Intervention can always be expected to help some companies and hurt others, though it is seldom realized at the time.

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