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It should be said that the greatest economic thinker of our time was John Maynard Keynes His economic postulates were of great importance to a world that was ravaged by depression underemployment and a lack of economic understanding for these events Keynesian thought was to change all this and provide a more accurate tool of analysis and theory of policy The so-called Keynesian economics1 ended up being a perfect fit for its time for had Keynes postulations come earlier his theory would probably have been largely ignored During earlier periods classical economic thinking dominated the scene with its more lassiez-faire policies While some intervention was seen as necessary it was primarily held that the market will adjust itself These orthodox economic thinkers were strong believers in the efficiency and equity of the market In their opinion the best course of action was to let the market economy fix itself The classical reliance on the adjustability of markets was highlighted by this passage from Fusfeld According to the orthodox theory of full employment embodied in Says Law of Markets any money saved would find its way to investment through the money markets If there was a tendency for savings to exceed investments a decline in the rate of interest would quickly right matters if investment were to outrun the supply of savings the rate of interest would rise and reestablish equality If this equality of savings and investment occurred at relatively high levels of prices and wages that left some labor unemployed wages would fall bringing the price level down with them until all resources were productively employed2 What becomes obvious is that if markets are to adjust themselves with moderate intervention then an economic downturn should be of no primary importance because the markets will right themselves given the proper time to do so We know better than to think that markets will promptly adjust themselves in the short run now but at
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