History of Economic Thoughts”John Maynard Keynes

Youssef Abdul Khalek


This assignment is addressed to spot the light on Keynes contributions to economics. It shows first an overview about historical economic though starting from Adam Smith who‟s the father of economics and who established the classical school of economics at late 18th century that is based on a thought that markets works in best efficiency when they are left alone and thus there should be no government intervention in markets, based on the concept of the Laissez faire and the Invisible hand that was widely accepted in that age. Until the later of 19th century when the industrial revolution takes place and bring big social and economic changes and many of these changes negatively affected societies, thisenabled Karl Marx to build the Classical political economic school that brought new terms such as Capitalism, Socialism and Communism. This theory is based on the thought the society should be one class and government should interfere to present equality between citizens. Beyond these Thoughts many economists like Alfred Marshall within that period brings important concepts and theories to economics such as the Marginal revolution. These developed concepts build the neo-classical schools of economics. Till late of 19th century and begging of 20th century Keynes rose with a mix of experience based on previous economic schools and based on experiencing world events such as world war one and two, and the great depression. Keynes tried to set a logic balance between the previous schools; he brings very important economic concepts especially in the field of macroeconomics and was able to help many countries to solve problems like unemployment or to manage its monetary systems. Keynes economic concepts were all explained in his works (Indian currency and Finance, The Economic consequences of the Peace, A Treatise on Probability, the end of Laissez Fair, Treatise on Money, The Means to Propensity, The General Theory of Employment Interest and Money, how to Pay for the War…) and his contributions to set International Monetary Institutions after world war, these monetary institutions that are still leading the monetary system of the world till now days. All what Keynes brings to economics was enough to name Keynes the economist of the 20th century