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Critical thinking in a Nutshell., Economic Schools of Thought. Part 2/2.

Economic Schools of Thought. Part 2/2.

● Hayekian economics (5:40)

Adriene: But as Socialism and Keynesian economics expanded, other groups continued to forcefully push for private property and free markets. The most vocal was often the Austrian school of economics, they also have a very vocal fanbase in our comments section. Friedrich Hayek and Ludwig Vunmises, who were unsurprisingly from Austria, argued that heavy state involvement has never produced the results it promised, and that regulation and government tinkering is actually a problem, not a solution. Rejecting nearly all forms of fiscal and monetary policy, the Austrian school today argues the economy's just to complicated to manipulate. This backlash against government intervention was carried forward in the US by Milton Friedman. Like the Austrians, Friedman advocated privatization of many functions that had been assumed by government, famously proposing school vouchers and deregulation of the economy. He also concluded that the depression could be blamed on botched monetary policy rather than some inherent fault of capitalism.

The theories of Friedman and his followers at the University of Chicago came to be called the Chicago School of economics. Friedman's views got a huge boost in the 1970's. At that time, inflation soared while output stagnated. Remember stagflation? A combination that Keynesian economics had trouble reconciling. Some macroeconomists drew on the insights of the Chicago school to claim that these events disprove Keynesian economics.

Building on the ideas of Friedman, another idea of economics gained traction: monetarism. Whoo, Stan, so many -isms. Monetarists focused on price stability and argue the money supply should be increased slowly and predictably to allow for steady growth. At about the same time, another theory called supply-side economics, or sometimes called trickle-down economics entered the mainstream. Supply side economics advocated deregulation and cutting taxes, especially corporate taxes.

● Modern economics (7:37)

Mainstream economics today takes ideas from both classical economics, including monetarism, and Keynesian economics. This unified theory is sometimes called the New Neoclassical Synthesis. And yeah, economists are bad at naming things, too. But debates about how and when to implement policies continue. And remember, these are more than just intellectual classroom spats, these policies affect millions of people.

The different reactions to the global recession in 2008 are a good example of this. Some economists suggested using Keynesian policies, namely deficit spending. Other economists suggested the more classical approach of reigning in excess spending to reduce budget deficits, something called austerity.

Believe it or not, economists are still fighting about which of these policies is the right approach and when to use them. We can all agree that Keynes was right about at least one thing, when he said, "Ideas shape the course of history." So where are all these economic theories and ideologies gonna take us in the future? Most countries that once supported strict Communism like China and Cuba have moved toward Capitalism. The only country that's really sticking with it's North Korea, but they're too isolated to be a real test case for an economics system. But this doesn't mean that Marxism is dead. Many capitalist countries have adapted socialist looking programs. It appears the world's economies are converging towards the middle. But in the end, it turns out it's just really hard to predict the future, especially when we're talking about something as complex as the world economy. Remember Malthus's belief that we're all gonna starve? Well like Malthus, we don't know what kind of changes humanity's gonna face in the future. If history has proven anything about economic thought, it's that we should expect surprises that will upset our current economic models, just like Malthus couldn't imagine that we'd all be alive today. [endscreen]

Thanks for watching, we'll see you next week. ● Credits (9:30)

CrashCourse Economics is made with the help of these nice people; feel free to comment on how great they are, too. CrashCourse is made possible by your support at Patreon. You can help keep CrashCourse free for everyone forever and get great rewards at Patreon.com. Thanks for watching. We're glad Malthus was wrong, and that you're alive


Economic Schools of Thought. Part 2/2. Wirtschaftliche Denkschulen. Teil 2/2. Οικονομικές σχολές σκέψης. Μέρος 2/2. Escuelas de pensamiento económico. Parte 2/2. Écoles de pensée économique. Partie 2/2. 経済思想の学派パート2/2。 경제학파 파트 2/2. Ekonomiczne szkoły myślenia. Część 2/2. Escolas de pensamento económico. Parte 2/2. Экономические школы мысли. Часть 2/2. Ekonomik Düşünce Okulları. Bölüm 2/2. Економічні школи думки. Частина 2/2. 经济思想流派。第 2/2 部分。 經濟思想流派。第 2/2 部分。

● Hayekian economics (5:40) ● Economía hayekiana (5:40)

Adriene: But as Socialism and Keynesian economics expanded, other groups continued to forcefully push for private property and free markets. Adriene: Pero a medida que el socialismo y la economía keynesiana se expandían, otros grupos continuaron presionando enérgicamente a favor de la propiedad privada y el libre mercado. The most vocal was often the Austrian school of economics, they also have a very vocal fanbase in our comments section. La más ruidosa suele ser la escuela austriaca de economía, que también tiene una base de seguidores muy ruidosa en nuestra sección de comentarios. Friedrich Hayek and Ludwig Vunmises, who were unsurprisingly from Austria, argued that heavy state involvement has never produced the results it promised, and that regulation and government tinkering is actually a problem, not a solution. Friedrich Hayek y Ludwig Vunmises, austriacos como era de esperar, sostenían que la fuerte intervención del Estado nunca ha producido los resultados prometidos, y que la regulación y el intervencionismo gubernamental son en realidad un problema, no una solución. Rejecting nearly all forms of fiscal and monetary policy, the Austrian school today argues the economy's just to complicated to manipulate. Rechazando casi todas las formas de política fiscal y monetaria, la escuela austriaca sostiene hoy que la economía es demasiado complicada de manipular. This backlash against government intervention was carried forward in the US by Milton Friedman. Like the Austrians, Friedman advocated privatization of many functions that had been assumed by government, famously proposing school vouchers and deregulation of the economy. Al igual que los austriacos, Friedman abogaba por la privatización de muchas funciones que había asumido el gobierno, proponiendo célebremente el cheque escolar y la desregulación de la economía. He also concluded that the depression could be blamed on botched monetary policy rather than some inherent fault of capitalism. También llegó a la conclusión de que la depresión podía achacarse a una política monetaria chapucera y no a algún fallo inherente al capitalismo.

The theories of Friedman and his followers at the University of Chicago came to be called the Chicago School of economics. Friedman's views got a huge boost in the 1970's. Las opiniones de Friedman recibieron un gran impulso en la década de 1970. At that time, inflation soared while output stagnated. En aquella época, la inflación se disparaba mientras la producción se estancaba. Remember stagflation? ¿Recuerdas la estanflación? A combination that Keynesian economics had trouble reconciling. Una combinación que a la economía keynesiana le costó conciliar. Some macroeconomists drew on the insights of the Chicago school to claim that these events disprove Keynesian economics. Algunos macroeconomistas se basaron en las ideas de la escuela de Chicago para afirmar que estos acontecimientos refutaban la economía keynesiana.

Building on the ideas of Friedman, another idea of economics gained traction: monetarism. Basándose en las ideas de Friedman, otra idea de la economía ganó tracción: el monetarismo. Whoo, Stan, so many -isms. Whoo, Stan, tantos -ismos. Monetarists focused on price stability and argue the money supply should be increased slowly and predictably to allow for steady growth. Los monetaristas se centraron en la estabilidad de precios y sostienen que la oferta monetaria debe aumentar lenta y previsiblemente para permitir un crecimiento constante. At about the same time, another theory called supply-side economics, or sometimes called trickle-down economics entered the mainstream. Más o menos al mismo tiempo, otra teoría llamada economía de la oferta, o a veces economía del goteo, entró en la corriente dominante. Supply side economics advocated deregulation and cutting taxes, especially corporate taxes.

● Modern economics (7:37)

Mainstream economics today takes ideas from both classical economics, including monetarism, and Keynesian economics. La corriente económica dominante hoy en día toma ideas tanto de la economía clásica, incluido el monetarismo, como de la economía keynesiana. This unified theory is sometimes called the New Neoclassical Synthesis. Esta teoría unificada recibe a veces el nombre de Nueva Síntesis Neoclásica. And yeah, economists are bad at naming things, too. Y sí, los economistas también son malos nombrando las cosas. But debates about how and when to implement policies continue. Pero los debates sobre cómo y cuándo aplicar las políticas continúan. And remember, these are more than just intellectual classroom spats, these policies affect millions of people. Y recuerde, se trata de algo más que meras riñas intelectuales en las aulas, estas políticas afectan a millones de personas.

The different reactions to the global recession in 2008 are a good example of this. Las diferentes reacciones a la recesión mundial de 2008 son un buen ejemplo de ello. Some economists suggested using Keynesian policies, namely deficit spending. Other economists suggested the more classical approach of reigning in excess spending to reduce budget deficits, something called austerity. Otros economistas sugirieron el enfoque más clásico de frenar el exceso de gasto para reducir el déficit presupuestario, algo llamado austeridad.

Believe it or not, economists are still fighting about which of these policies is the right approach and when to use them. Aunque parezca mentira, los economistas siguen discutiendo sobre cuál de estas políticas es la correcta y cuándo utilizarlas. We can all agree that Keynes was right about at least one thing, when he said, "Ideas shape the course of history." Todos podemos estar de acuerdo en que Keynes tenía razón al menos en una cosa, cuando dijo: "Las ideas determinan el curso de la historia". So where are all these economic theories and ideologies gonna take us in the future? ¿Adónde nos llevarán en el futuro todas estas teorías e ideologías económicas? Most countries that once supported strict Communism like China and Cuba have moved toward Capitalism. La mayoría de los países que en su día apoyaron el comunismo estricto, como China y Cuba, han evolucionado hacia el capitalismo. The only country that's really sticking with it's North Korea, but they're too isolated to be a real test case for an economics system. El único país que realmente lo mantiene es Corea del Norte, pero están demasiado aislados para ser un verdadero caso de prueba de un sistema económico. But this doesn't mean that Marxism is dead. Pero esto no significa que el marxismo esté muerto. Many capitalist countries have adapted socialist looking programs. Muchos países capitalistas han adaptado programas de aspecto socialista. It appears the world's economies are converging towards the middle. Parece que las economías del mundo convergen hacia el centro. But in the end, it turns out it's just really hard to predict the future, especially when we're talking about something as complex as the world economy. Pero al final resulta que es muy difícil predecir el futuro, sobre todo cuando hablamos de algo tan complejo como la economía mundial. Remember Malthus's belief that we're all gonna starve? Well like Malthus, we don't know what kind of changes humanity's gonna face in the future. Bueno, como Malthus, no sabemos a qué tipo de cambios se enfrentará la humanidad en el futuro. If history has proven anything about economic thought, it's that we should expect surprises that will upset our current economic models, just like Malthus couldn't imagine that we'd all be alive today. Si la historia ha demostrado algo sobre el pensamiento económico, es que debemos esperar sorpresas que trastornen nuestros modelos económicos actuales, igual que Malthus no podía imaginar que hoy estaríamos todos vivos. [endscreen] [endscreen]

Thanks for watching, we'll see you next week. Gracias por vernos, nos vemos la semana que viene. ● Credits (9:30) ● Créditos (9:30)

CrashCourse Economics is made with the help of these nice people; feel free to comment on how great they are, too. CrashCourse Economics ha sido creado con la ayuda de estas agradables personas; siéntase libre de comentar lo geniales que son también. CrashCourse is made possible by your support at Patreon. You can help keep CrashCourse free for everyone forever and get great rewards at Patreon.com. Thanks for watching. Gracias por vernos. We're glad Malthus was wrong, and that you're alive