Since the dawn of time, humanity has always used a system of exchange between itself, in order to acquire materials, services or goods. Many trading systems exist today, from the historical barter system, in which goods and/or services are directly exchanged for other goods and/or services, to the more recent fiat currency system, in which currency is the median of the exchange of goods. and/or services. Economics, or “the science of choice,” was a field of interest reserved for a privileged few until around the 18th century. An Englishman would forever advance the world to a higher plateau of economic thought with the emergence of the first true economic book, An Inquiry into the Nature and Causes of the Wealth of Nations, or The Wealth of Nations – Adam Smith. Say no to plagiarism. Get a tailor-made essay on “Why Violent Video Games Should Not Be Banned”?Get the original essay Since Smith's publication in 1776, many people around the world have begun to study this natural phenomenon of economics and theories of free markets and the powerful. invisible hand. The year 1936 also marked another breakthrough in economic thought with another Englishman named John Maynard Keynes. In his publication The General Theory of Employment, Interest and Money, Keynes argued that free markets and the "invisible hand" were not the solutions to economic dilemmas, but rather the problems. Instead, Keynes argued for government intervention in the economy to help booming and declining countries. Since Keynes' publication, many economists have adopted Keynesian theory and used it to form and shape modern macroeconomics. Despite the growing popularity of the idea of ​​government-regulated markets among economists, Adam Smith's ideals did not fade away, but rather branched out. in what is called the Austrian School of Economics. Friedrich August von Hayek was the leading proponent of this new economic philosophy in the early 1940s and gained popularity in the early 1970s. Using Smith's classical and neoclassical economic theories, Hayek modernized Smith's ideas to show that Markets and nations work best when government intervention is limited. Since then, people across the economic and political spectrum have debated among themselves the extent to which government intervention in an economy can help or destroy a nation. Many economists who have read and analyzed Smith's The Wealth of Nations believe that the Austrian School of Economics approaches economic theory in two different styles: a classical message and a neoclassical message. Classical economics is the approach in which the value, distribution and growth of goods are the primary concerns of economic policy. Neoclassical economics focuses on patterns of supply and demand to best represent the most efficient determination of prices, production, and distribution of income among citizens. Smith approaches the classical approach at the very beginning of The Wealth of Nations. Smith explains to the audience that the “wealth of nations” can be constructed in two ways. First, by improving markets to intensify the distribution of labor, a country's workforce will become more productive; and second, a nation must produce more goods and services through its labor force, instead of being unproductive (Smith 1-19). Smith's neoclassical approach is the theory of the "invisible hand" of the market. This theory implies that the market itself has a self-regulating nature andshould be “left alone”. From this implication, economists are presented with the economic philosophy of “laisser-faire”, which comes from the French meaning “leave alone”. The laissez-faire economic philosophy asserts that if the market system is riddled with government intervention, then the market and the “wealth of this nation” will suffer severely (Smith 400). Continuing Smith's ideas, Hayek expressed concern in his publication The Road to Serfdom (1943) about the "danger of tyranny which inevitably results from government control of economic decisions through central planning" ("Friedrich A. Hayek: A Centenary Appreciation). While sticking to the foundations of the classical approach to economics, Hayek continues to express the neoclassical approach from a limited governmental perspective. Hayek viewed centralized planning as inherently undemocratic because it required the will of a small minority to be imposed on a nation's massive majority (Hayek 77). Hayek believed that this elite decision-making machine would eventually destroy the rule of law and individual freedoms (Hayek 80-96). Instead of being a centralized decision maker, Hayek said the government's role should be to regulate only unfair market participants, prevent market fraud and also create a safety net in the event of total economic collapse (Hayek 43-45). Hayek therefore concludes: “In no system that could be rationally defended would the state do anything” (Hayek 45). Many economists would say that the Austrian School of Economics is not a practical theory in the reality of ever-changing economies. Economists who disagree with “limited government” economic methods would side with Keynesian theory. Keynes introduced the world, as markets failed and the threat of World War II grew, to a new approach to economics: Keynesianism. Keynesianism establishes three economic pillars that a nation must possess in order to progress: the federal government must move away from the economic philosophy of laissez-faire, the federal government must play an active role in managing the national economy, and the government federal government must act to stimulate the national economy. demand and maintain a high employment rate. The way the federal government should accomplish these three points, suggested by Keynes, was to manipulate interest rates to manage money, raise or lower taxes, and engage in federal spending (Keynes 19, 305). Through his “general theory,” Keynes believed that it was the government that should help the failing economy, instead of waiting for markets to recover on their own. Keynesianism attempts to help and regenerate the short term of an economy, rather than the Austrian School of Economics approach which aims to help and stabilize the long term. Given the temporal context of the introduction of Keynesianism, this new way of economic thinking soared in order to lift nations out of national “depressions.” Since the end of the Great Depression, Keynesianism remains the primary foundation of modern macroeconomics for many economists. Currently, many people are still debating how much government intervention should be allowed in a country's economy. Consistent with the American political spectrum, most people who argue that government intervention plays a vital role in maintaining American democratic norms and helping to regulate the powers a certain individual may possess would reside on the left side. On the right, most people would say that the government.