Based upon your reading in The Worldly Philosophers by Robert L Essay

Based upon your reading in The Worldly Philosophers by Robert L. Helibroner, as well as CREDIBLE outside sources, outline the di - Essay ExampleBoth Joseph Schumpeter and John Maynard Keynes were subjected to the same economic period, suffering from economic recession and aimed at developing theories aimed at economic development. However both analyzed the situation divers(prenominal)ly and therefore observed different economic problems which made them to come with different definitions of the economics, which are very important in understanding the modern economic trends and situations. In an effort to solve the economic crisis, Keynes called for government intervention. Holding to the fact that capital was not an just a means of exchange as was stipulated by the likes of Adam Smith and David Ricardo, but the supply of money, and to be specific money speed had an adverse effect on the demand of goods, Keynes put it across that regulation of money supply would improve economic co nditions during recession (Heilbroner 267). To come up to this conclusion, Keynes held lack of control of money supply in the capitalist system had caused the recession. Schumpeter agreed to Keynes idea that the trouble of capitalist system resulted to the economic recession but attributed the failure to poor relation between capitalist investors and the actual managers of the investment projects who happened to be employees. According to Schumpeter, the managers salaries are not correlated to the companys profit and thus dont strive to maintain or improve future returns. Although Schumpeter did not reject interventions, he held that capitalism could be maintained and its success speed creative destruction that is replacement of old worn-out business models by new entrepreneurs innovations. What determines real price of commodities is a question that most economics start had in their minds. Keynes was not an exception, although his answers portrayed a view completely different f rom his predecessors. To develop his theories, Keynes held that money and credit were real, and greatly influenced commodity prices (Heilbroner 270). Disregarding that firms and individuals had any meet the economy as demand which was only affected by money velocity influenced capital formation, productivity and employment. However Keynes held the assumption that his theory was only efficient if the velocity of money was held never-ending. Schumpeter embedded on this assumption and criticized the whole theory on the fact that velocity of money can only be constant in primitive societies and not in the modern complex economic conditions. It was Keynes ideas, of fiscal and monetary policies that were used to solve the recession problem. However, equilibrium conditions were only obtained in the short run just as they were proposed by Keynes. Schumpeter criticized Keynes short run solutions as not caring about the future. Schumpeter identifies that the central economic problem was no t equilibrium as stipulated by Keynes, and suggested that structural change was more realistic. In attempt to solve the problem, he maintained that capitalist, not discarding intervention can static thrive given his theorem of the innovator. Schumpeter emphasized that equilibrium solutions were only short run that could not prevail in the long run due to structural changes. perverse to their predecessors, Keynes and Schumpeter replaced the argument demand or supply of