Volume 1: Hayek Vs Keynes--

    Throughout human history, humans have debated and tested ways to improve their social economic status. This is none more evident than in the economic testaments of Friedrich Hayek and John Maynard Keynes.

Capitalism and Socialism, the main ones:
    Socialism consists of the ideology that a government may intervene when it is necessary to pull their respective people out of the turmoil that envelops them.

Capitalism is the idea that the government should not be involved in the government and should let things be resolved and created by the people. Commonly referred to as Laissez-faire this system prevents the government from creating legislation to restrain private enterprising from their full potential with tariffs and regulations.

However, as the past has proven when you have too much of one, the balance is broken and one part of the economy or the other will collapse causing a political, economic and/or social revolt of some sort. A balance is needed. Both Keynes and Hayek developed their theories surrounded by such experiences.

Hayek:
     Hayek based his political theory around the basis that inflation was one of the worst things that could happen to an economy. As an Austrian, he had first hand experienced what had happened to both his economy and the neighboring Germans after the great war. He is known as the biggest advocate for Austrian economics. Austrian economic logic argued that the radical reaction in Germany (Nazis) had a direct correlation with the hyperinflation that had occurred. At one point the inflation in Germany freefell to become 1 US dollar= 4.2 trillion marks. Therefore he strongly disagreed with government investment. He felt that what should happen is the economy should work itself out with private enterprises incentivized by improving their situation would stimulate the economy by negotiating and exchanging.

Keynes
After the unregulated capitalism had caused a massive depression both in the United States and around the world, the British scholar Keynes originated his theory of Keynesian economics. A theory where the government would invest when there was a recession in the economy and when things were doing well the government would create a surplus to be ready if things ever turned for the worst. When people argued that there would be a great deal of inflation if nations were to do this he responded by saying that inflation was a better temporary outcome than having an economic recession that would make people have more radical reactions. In the end, the US used Keynes ideas in the New Deal to promote economic growth, like an engine kickstart. After a couple more rough years the kickstart got the formidable car running smoothly again.

This is where Hayek and Keynes disagree. They clashed over what lead nations to fascism and self destruction. It was a clash that debated whether the free market was self-sustaining or not. To sum it up, although both believed in capitalism Hayek believed in a more conservative unregulated capitalism while Keynes lay his theories in a more socialist capitalism. In volume 2 the future impacts of these economic systems, on the world economy and governments approach to their respective economies will be discussed.


Hyperinflation in Germany



Sources
http://www.spiegel.de/international/germany/millions-billions-trillions-germany-in-the-era-of-hyperinflation-a-641758.html

http://www.econlib.org/library/Enc/AustrianSchoolofEconomics.html

http://www.econlib.org/library/Enc/KeynesianEconomics.html

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