How Did Hayek Affect The Economy

John Maynard Keynes was an English economist who felt planning wartime economies would help governments defend freedom. Friedrich von Hayek on the other hand, was an Austrian economist who thought freedom would be threatened if there were government intervention in the economy. Keynes felt that with no government intervention, the market economy would overload, and when problems occurred, the market would not work. Hayek disagreed, and felt that with no government intervention, the market would eventually take care of itself. Hayek did not favor inflation, and felt it was an evil that ruined society and damaged democracy. Although Hayek opposed inflation, Keynes felt that some inflation could help the economy as a whole. Keynes did not fight significant inequalities in income and wealth, and thus did not favor a society in which incomes and wealth were equally distributed among all members of society. He thought of two reasons for inequality, the first reason is that it is an incentive for productive activity and is a network for competitive motivation. However, he felt that existing inequalities were tremendous, and they should be reduced as soon as possible. Although Keynes felt that inequalities in income and wealth were a problem, Hayek did not see a problem with inequality and how it might limit our freedom, but instead argued that the
Keynes noted how higher taxation of larger incomes and inheritances could be a possibility of generating tax revenue; however, he did not support this idea. He supported the idea of leaving most of the economy in the hands of private actors, and could potentially be accomplished by controlling taxes and interest rates. Keynes did not oppose private property, wage labor, or market exchange. He agreed that a high amount of progressive taxation would be a logically approach to fixing dangerous income