Schools of thought Flashcards
(13 cards)
What are the fundamental ideas of the Austrian Market economy
- Free markets
- Private property
- Property rights
- Individual choice
Define the ‘market economy’
Nothing but voluntary cooperations of free individuals and prices reflect people’s preferences
How do Austrian markets feel towards central authority
They are skeptical
What would Hayek say about the market economy
It may not be perfect but intervening would interfere with people’s preferences so any attempt at fixing things would make it worse
What are the fundamental ideas of Marxist economies
- Nothing natural about the market economy
- Society is dominated by class struggle which is reflected in the market
- Markets are created to be exploited by capitalists
What are the differences between Austrian Markets and Marxist ideas
Everything, they directly conflict
What would Marx say about the market economy
It is fundamentally crisis prone and imperfect
How does Keynesianism differ from Austrian and Marxist schools
It believes the economy needs fixing to remain natural such as implementing fiscal (and monetary) policies
How would the Austrian school argue against implementing policies
It interferes with the individual’s freedom
How would Marxist schools argue against implementing policies
It sustains the existing (flawed) class structure
What is monetarism
Economic theory which emphasises the role of government spending
What is hard monetarism
- believes fiscal policy does more harm than good
- close to the Austrian school
What is soft monetarism
- somewhat supportive of active fiscal policy
