Jone Maynard Keynes

    Jone Maynard Keynes stands with Adam Smith and Karl Marx as one of the world`s most influential economists. The son of a noted British  economist, Keynes amassed    a fortune through speculation in stocks and commodities. He served the British government as a financial adviser and treasury official through most of his adult life and was a key participant in the negotiations following both World Wars I and II.

     Although Adam Smith had written The Wealth of Nations about the time of the American Revolution, by the 1930s little had changed in the thinking of mainstream economists. Most would have agreed with Smith, that the best thing government could do to help the economy would be to keep its hands off. They reasoned that as long as the economy was  free to operate without interference, the forces of supply and demand would come into balance. Then, with total supply and demand in eguilibrium, everyone looking for work could find a job at the prevailing wage, and every firm could sell its products at the market price.

       But the 1930s was the  period of the Great Depression. Despite the assurannces of the classical economists, the fact was that unemployment and business failure had reached record proportions in the United States and the rest of the industrialized world. It was at this time (1936) that Keynes` General Theory transforment, Interest, and Money was published. The General theory transformed economic thinking in the 20^th century, much the way that The Wealth of Nations had in the 18^th. 

   The “someone” keynes had in mind was government. He reasoned that if for example, government spent money on public works, the income received by formerly idle workers would lead to increased demand, a resurgence of business activity and the restoration of full employment.

 David Ricardo  / Classical Champion of Free Trade/ 


      David Ricardo is one of history`s most influential economists. Born in England, Ricardo made a fortune on the London Stock Exchange. This wealth gave him the time to write and to serve in Parliament`s House of Commons. His most famous work, Principles of Political Economy and Taxation(1817), marked him as the greatest spokesman for classical economics since Adam   Smith.
       Ricardo is  especially famous in international economics for demonstrating the advantages of free trade. Free trade is  a policy in which tariffs and other barriers to trade between nations are removed. To prove his point, Ricardo developed a concept we now call the principle of comparative advantage. Comparative advantage enabled him to demonstrate that one nation might profitably inport goods from another even though the importing country could produce that item for less than the exporter.
      Ricardo`s explanation of comparative advantage went as follows.Portugal and England, both of whom produce wine and cloth, are considering the advantages of exchanging those products with one another.
    We can see, Ricardo continued, that even though Portugal can produce both wine and cloth more efficiently than England, it pays them to specialize in the production of wine and import English cloth.
    England will also benefit. By specializing in cloth, it will be able to obtain wine in exchange for 100 worker years of labor rather then 120.
   As a member of Parliament, Ricardo pressed the government to abandon its traditinal policy of protection.