FREE ESSAY ON VIEWS OF MARX AND KEYNES

VIEWS OF MARX AND KEYNES

Views of Marx and Keynes
John Keynes and Karl Marx are two of the most influential and notorious economists of our
time. Their views on the economy are very different. Marx was a radical communist while
Keynes was a Capitalist and a brilliant intellectual. Their views stem from their
upbringing. Marx was born into a Jewish, middle class family and Keynes was born into a
comfortable English social class that considered itself born to rule. Their writings
brought their beliefs about the economy lead them into the public eye. Marx wrote the
"Communist Manifesto" and "Das Kapital". Both writings sought social upheaval and
attacked the capitalist system. Keynes' writings include "The Economic Consequences of
the Peace" and "The General Theory" which revolutionized the way the world thinks about
economic problems. Marx and Keynes' views were and remain widely acknowledged to
economists throughout the world through their writings.
John Keynes thought there was no necessity for public or government ownership. Instead,
he believed that government action was essential. Rather than government ownership,
Keynes supported private ownership of the means of production. Karl Marx identified
private productive property as the real source of evil. He believed that possession of
economic resources gave power to the owners who then oppressed the workers, who have only
their labor to sell. He believed that ownership of capital forces human beings into
unequal relationships as capitalists and laborers. Marx concluded that envy, greed and
personal ego are direct outcomes of private property.
Keynes dwelt on the overall economy rather than individual markets. He did not direct his
attention to what should be produced and how, but did speculate about the possibility
that relative scarcity would cease to be a problem. Keynes considered that one day the
world would be free from its fixation with want. Marx was far more candid on this issue
of resource allocation. The increasing misery and unemployment for workers, and falling
profits for capitalists meant to Marx that the system had to be destroyed. Marx believed
that something had to be done to prevent workers from being exploited, dehumanized and
alienated from their work. 
John Keynes believed that the failure to provide full employment and the arbitrary and
inequitable distribution of wealth and incomes were the outstanding faults in the
economic system. He believed that there is social and psychological justification for
significant inequalities of incomes and wealth. They can be justified because there are
valuable activities that require the motive of money making and the environment of
private wealth ownership. Keynes argued that some inequality is necessary to provide
sufficient incentives to entrepreneurs to undertake investment. Karl Marx was critical of
capitalism and thought that under capitalism, inequalities would only worsen. He believed
that inequalities would result in an increase in unemployment. Marx was however, very
supportive of communism. He believed that income distinctions would disappear and goods
and services would be distributed according to need if there were pure communism. Marx
summed up his views by saying that economic life would be governed by the rule "from each
according to his abilities; to each according to his needs." 
John Keynes believed that government action is essential to stabilize an unstable
economy, end economic recessions and depressions, and produce full employment. He
recognized that his solution to the unemployment problem of the 1930's would come as a
shock to those who believed in a laissez-faire economy. Keynes rejected a laissez-faire
economy because market based economies do not produce full employment immediately; he
said there will always be unemployment. He believed there was an inherent weakness in the
market system. To overcome this he believed that government action was essential. He said
the government should monitor the economy, and introduce policies that run counter to the
trade cycle. He fundamentally believed that the government's role was to fine-tune the
economy. Marx believed there was no role for the government. He said that capitalist
governments do not serve the interests of the whole population. Marx wanted private
property to be eliminated and for a socialist government to come into existence. In the
transformation from a capitalist government to a socialist one, Marx recognized that
there would be government ownership of the means of production early on. But as the focus
went on social commitment, rather than the idea of self-importance, there would be less
need for central control. He believed that the government would "whither away" as
communism-replaced socialism. Marx's ideal community would then emerge: a community of
self-governing human beings living in harmony. 
Keynes believed that adding to government functions was necessary to avoid the
eradication of the economic system, therefore allowing the individual to display
initiative and flourish. Keynes' focus lay with groups of individuals in the economy. He
focused on a way to achieve full employment of labor. He said the level of activity in
the economy was crucial to the amount of employment. Keynes believed that private
investors played a decisive role by their decisions to add or to postpone investment. He
said this was the reason why the market economy was unstable. Keynes viewed private
investment as being volatile. He was aware that investor's plans could change quickly. He
saw aggregate demand as being a reflection of investor's decisions. He believed that the
right of individuals to work could be protected if government spent money to maintain
aggregate demand whenever private investment was low. Marx believed that the role of the
individual in society was of fundamental importance. He presented a communist society as
being a paradise on earth where individuals can break free of restrictions imposed by the
division of labor. He ultimately saw it as being freedom for the individual. Marx
believed that individuals were trapped within social classes. He saw the workers and the
capitalists being opposed to each other in the production process. He firmly believed
that their differences and divisions could not be reconciled. Marx believed that
suffering and conflict took place because the ruling class had power over the rest of
society. The ruling class power depended on private productive property and if there were
communism, the conflict would subside because private property would end. Marx believed
that communism represented individual freedom and equality and under communism, human
conflict would cease.
Keynes' views that government action is essential to produce full employment have been
applied in Australia recently with the government's job network, which has tried to
create jobs for the unemployed. Keynes believed that the government should have a key
role in the economy. The Australian government is improving its economic performance and
is creating a new tax system through the GST.
Marx and Keynes views on ownership, resource allocation, income distribution, and their
views on the role of individuals and government in the economy have gained them worldwide
acclaim from capitalists and communists. Their views have been disputed and praised by
economists for over 180 years. Marx's "Communist Manifesto", about the need for workers
to overthrow their rulers, resulted in him not being able to enter Europe again. Keynes,
however, was praised by capitalists and was allowed to preach his economic theories
throughout the world. Both Marx and Keynes were essential to developing what today is our
economic system.