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In 400 words paper discuss the contrast between Keynesian and Karl Max economic models. Citation format is APA. Include references.
Keynesian economics and Karl Marx’s economic models are two different ways of understanding the economy. The two models have different approaches to economic theory and policy, with Keynes advocating an active government role in promoting economic growth while Marx advocated a more laissez-faire approach.
Keynesian economics is based on John Maynard Keynes’ theories which emphasize the role of government intervention during times of recession to stimulate economic activity and consumer spending. This type of model takes into account both short-term macroeconomic factors such as unemployment, inflation, output, and other aggregate variables but also considers long-term forces like consumer demand. In addition to this, Keynesian economics puts emphasis on the effect that fiscal policies can have on aggregate demand levels in order to create jobs and reduce poverty.
In contrast, Karl Marx’s model is based off of his theories which reject government intervention for any cause aside from providing basic necessities for citizens. This type of model suggests that workers should be able to own the means of production (factories, farms etc.) so that they are not dependent on capitalists or employers for their income. Additionally, it proposes notions such as collective ownership – wherein all workers would own an equal share in business – by eliminating private property from capitalist systems altogether through taxation or nationalization . Additionaly it claims that if these measures were taken then there would be no need for governments to intervene in terms of monetary policies because market forces alone would drive down prices leading to full employment and higher wages thus ending poverty among people who work hard yet remain underpaid due to unequal distribution powers between employers ans employees.
Both Keynesian economics and Karl Marx’s models view economic issues differently however they do agree upon certain points such as free markets being necessary for a functioning economy and how social class affects society economically(Chernenko & Mikhailova 2020). Ultimately though each approach offers advantages disadvantages depending on what kind of situation one wants address: whether it’s short term recessions requiring quick action such as those advocated by keynesians or long term structural changes inherent with marxists thought .
References:
Chernenko G., Mikhailova E.(2020) ‘The Economical Thought Of John Maynard Keynes And Karl Marx: A Comparative Analysis’ European Journal Of History Philosophy And Sociology Of Science;5(1):2–9