Modern Economists And What They Would Think Of A 2020 UK
In this blog I will discuss an insight into two economists and how they would view the state of our economy now.
Friedrich Hayek
With a heavy laissez faire attitude, Hayek believed that governments should not impose on the allocation of resources except in the provision or protection of public goods. Opposing socialism, Hayek also supported the idea of a free market economy: (resource allocation by individuals, by the operation of market forces) which technically is far superior than any state planning system.
I believe Hayek would be disappointed at how much responsibility the government has over the market at first, contrarily I believe that seeing the pandemic would justify/convey how important the government’s role really is in saving businesses and bailing them out which would not be that case if having chosen Hayek’s methodology. However, with communism failing and doubts in the effectiveness of the Keynesian demand/side management this could lead to more support for Hayek’s beliefs.
Karl Marx
Far the opposite of Hayek, Marx was a communist. This meant he believed that capitalism would eventually self-destruct as having the bourgeoisie as the ruling class was unsustainable; it would create exploitation amongst the lower classes which would then cause social unrest and eventually a communist revolution.
I believe that Karl Marx would be somewhat unsurprised as his predictions about a monopolisation of a market would almost certainly become true. Furthermore, these businesses do exploit the working class with low wages which aligns with his theory that: Capitalists (the owners of capital), whose objective is to make a profit, must end up exploiting workers to achieve this objective.
Contrarily, some elements of a capitalist society work well and with the UK’s economy (arguably compared to that time period) booming, it disproves some of his original views which is why I think Marx may be a fairly surprised at the economic state of a 2020 UK.