Course Title: Economics 201, Great Economist of the Twentieth Century

Prerequisite: None

Credits:  4

Milton Friedman, John Galbraith, and John Keynes were great contributors to economic thought in the 20th century. Economics 201 is a course designed to lay a foundation of understanding on the how's and why the federal government dabbles in economics and market forces. Additionally, the course is intended to balance to some respects the political implications of the respective economic ideas put forth by these great men. For a reading that is considered the genesis of modern economic thought, please read Wealth of Nations by Adam Smith.

In John Galbraith's The Affluent Society many liberals find solace in the genius of the authors theories on progress and consumption, advertising and nation infrastructure. Nearly 50 years later, there has been much Galbraith influence on American Society. But not all of his prognostications have come to fruition.

Taking nothing away from this classics economic book, one where he wrote about the affects of consumerism on the environment before Rachel Carson's Silent Spring, John K. Galbraith is very much a giant in economic thought.

Some of the concepts developed in this book include, "conventional wisdom".  Conventional wisdom was never meant as a compliment from Galbraith, in his writings he argues that conventional wisdom holds society back. Conventional wisdom is a crutch where we fit what we see into what we know, a lazy man's approach to assimilation, instead of doing the hard work of deducing the facts.

Another concept he expands upon is the idea that corporations must constantly advertise and push consumerism in order to grow and profit. Without constant advertising demand decreases, and then sales plummet, profits tank, and people get laid off. Feed the Beast in simpler terms.

A third idea, a social concept, is that with the growing disparity of the wealthy to the poor, it is important for governments to spend money on the amenities within society. Wealthy people will have the means to retreat from the world, relax a little and unwind. But the poor among us do not have the means to do such stress releasing activities. In the face of this fact, which will lead to civil unrest and potentially to revolution, Galbraith argues that governments should invest in parks and theaters, stadiums, and more roads. This investment in society pays off in the long run.

The Affluent Society by John Kenneth Galbraith is a classic tomb, nearly 50 years old, but a fundamental block in understanding the why's and what's of governmental expenditures in relation to bettering a civil society.

John Maynard Keynes was one of the most influential and most scrutinized economist of all time, and like the other economist profiled in this course, his body of work could encompass a complete major of study. His place in Economics 101 is intended to be a starting point of study, a primer for more.

Widely considered a father of macroeconomics because of his writings on economics at the national level there is a branch of economics named after him, Keynesian Economics. Oddly he had long since died when interest in his specific ideas gained ground.

The General Theory of Employment, Interest, and Money. is just one of his writings, but probably his most influential. In this book Keynes explores national economic policy, his lasting contribution is the idea that, to paraphrase, in times of high unemployment and economic downturn, it is incumbent upon the federal government to increase spending to stimulate demand. Even if deficit spending occurs. Keynes was not, however, in favor of deficit spending in good economic times.

This idea is based on aggregate demand and the idea that national spending, income, and savings could be quantified and manipulated to moderate the depressions, recessions, and booms.

One policy Keynes wrote against, was the idea of reducing wages in inflationary times. He argued that companies didn't often accompany wage reduction with price cuts, and thus if the prices held and wages fell, demand would fall as well, which does nothing for job creation and stable inflation, and therefore is more harmful than good.

Some argue that the New Deal programs of Franklin Roosevelt were rooted in Keynesian economics, Roosevelt however denied that. It is clear and undeniable however, that for much of the last half of the 20th century, and until George W. Bush pushed for tax cuts to stimulate national demand during the Clinton Recession of 2001, the Democratic party and much of the Republican party read from the same Keynesian bible.

Milton Friedman is the counter-balance to John Galbraith and John Keynes. Whereas both Keynes and Galbraith advocated more government involvement into economic matters, Milton Friedman was an proponent of pure free markets. Many ideas that Galbraith, and more specifically Keynes would of or have supported, Friedman derails.

Written with his wife, Rose, Free to Choose is a classic libertarian economic book. It was written after an early 1980's PBS mini-series of the same name.

In Friedman's analysis, minimum wage laws were more harmful than helpful, they created barriers to entry level jobs. Reserve Board mechanism created a "Tyranny of Controls" and progressive tax codes were not ideal.

Some ideas he advocated: negative tax rates for the poor, decriminalization of marijuana and school choice vouchers.

Milton Friedman argues that when government involves itself in the free markets, they are in affect making choices for individuals and business who would be better off making the decisions themselves.

A little self reflection: "I am a libertarian with a small l and a Republican with a capital R. And I am a Republican with a capital R on grounds of expediency, not on principle."

Interestingly, he and fellow professors from Chicago University took criticism when they advised the then tyrannical government in Chile of Augusto Pinochet. Later, Friedman dismissed the criticism when he pointed out that the economic reforms led to the revolution which ousted Pinochet.

Another great book by Milton Friedman is Capitalism and Freedom. Along with Free to Choose, both books are considered classics in economic thought and highly recommended by RSU.