Федеральное агентство по образованию РФ

Государственное образовательное учреждение

Высшего профессионального образования
«Удмуртского государственного университета»
Филиал ГОУ ВПО «УдГУ» в г. Кудымкаре
Кафедра экономики и управления

Контрольная работа

По дисциплине: Английский язык.

Тема: «John Maynard Keynes and Milton Friedman: whether should the state
interfere with economy?»

Выполнил: студент гр. К24-23

Рожнев Андрей Васильевич
Проверил: преподаватель
Сторожев С. Г.

Кудымкар 2009.
 The content.
1. Biography of John Maynard Keynes
2. Biography of Milton Friedman
3. John Maynard Keynes's opinion concerning intervention of the state in
economy.
4. Milton Friedman’s opinion on intervention of the state in economy.
5. Conclusion.
6. Bibliography

1. Biography of John Maynard Keynes

Keynes was the son of the known English economist. He has received
education in Eton and Cambridge. First him the mathematics and probability theory
interested, but eventually he was switched to economy.

Keynes was not only the economist. He was incredibly

The active, versatile person who was engaged
Set of the most different has put. He was the main thing representative of the
British exchequer on Paris peace conference during the first world war, the
assistant. The chancellor of exchequer, a Advice’s member of English bank’s
directors, member of guardians’ advice National Galleries, chairman of Advice on
support of music and arts treasurer in Royal college, editor Cambridge Economic
Journal, headed magazines Nation and New Statesman, and also the National
society on life insurance. Besides he was the manager of the investment company,
has organized ballet troupe Kamargo ( his wife Lydia Lopuhina was the well-
known star of Russian imperial ballet) and has constructed (not without benefit for
itself) art theatre in Cambridge.
Besides Keynes has found time to acquire personal riches in 2 million dollars,
speculate on goods and stock exchanges. He was also the conducting figure «
Blumbersk’s groups » which was at the head of vanguard elite and rendered huge
influence on art and literary tastes in England.
His main work was «The End Laissez faire (1925), «The treatise about
money» (1930), «The general theory of employment, percent and money » (1936),
« How to pay war », (1940).
Keynes died of a heart attack at his holiday home in Tilton, East Sussex on
the 21st April 1946.

2. Biography of Milton Friedman

 American laissez-faire economist, professor at the University of Chicago, and
one of the leading conservative economists in the second half of the 20th-century.
He was awarded the Nobel Prize for Economics in 1976.

After studying at Rutgers University and the University of Chicago, Friedman

received his Ph.D. from Columbia University in 1946 and joined the faculty of
the University of Chicago that same year. Friedman became one of the leading
American advocates of the monetarist school of economics, which holds that the
business cycle is detemined primarily by money supply and interest rates rather
than by a government's fiscal policy. In Capitalism and Freedom (1962; with his
wife, Rose D. Friedman) Friedman argued for a negative income tax, or
guaranteed income, to supersede centralized, bureaucratized social welfare
services, which in his view are inimical to the traditional values of individualism
and useful work. Among his other works, many of which concern the theory of
money, are A Monetary History of the United States, 1867-1960 (1963) and
Monetary Trends of the United States and the United Kingdom (1981).

3. John Maynard Keynes's opinion concerning intervention of the state in

economy.
 In opinion of Keynes the state should provide initial investments into
conditions of insufficient effective demand on the part of consumers and a private
sector of economy.
Tasks of the state are the increase in effective demand and reduction in an
acuteness of problems of realization. Keynes counted a solving component of
effective demand investments, paying to their stimulation paramount attention. In
his work two basic methods of increase in investments are recommended:
budgetary and a monetary-credit policy.
The first is suppose active financing, crediting of individual businessmen
from the state budget. Keynes has named such policy socialization of investments.
With a view of increase in volume of resources necessary for increase of private
capital investments, within the framework of a budgetary policy the organization
of the state purchases of the goods and services was provided also.
As to a monetary-credit policy it should consist in all-round downturn of the
rate of percent. It will reduce the bottom limit of efficiency of the future capital
investments and will make their more attractive. Thus, the state should provide
such quantity of money in circulation which would allow lowering the interest rate.

4. Milton Friedman’s opinion on intervention of the state in economy.

 Friedman is the adherent of classical school, dividing one of its main theses -
about non-interference of the state to economy. Giving reason it is that the market
acts as the guarantor of freedom of a choice, namely freedom of a choice is a
condition of efficiency and viability of system. It is viable first of all the free
exchange on which it is based, is carried out only when it is favourable to both
parties. The mechanism providing realization of economic freedom and
interrelation of actions of free individuals, the mechanism of the prices is.
Friedman recognizes, that the market model should not dominate undividedly in
a society. In fact for a society as a whole access to a lot of the blessings is
important. Education and health services, and also the mechanism of material
security of citizens concern to such blessings irrespective of their concrete activity
first of all. Friedman supposes the state intervention for maintenance to all citizens
of the admission to these blessings, thus constantly emphasizing necessity of
search of the compromise between inevitable at this intervention by elements of
dictatorship and individual freedom.
Friedman accepts the state intervention only in such forms which least limit
freedom of the person including freedom to spend money. As a whole he acts as
the opponent of excessive expansion of sphere of granting of the social blessings,
considering, that it generates so-called institutional unemployment and "new"
poverty.

Conclusion.
 Having considered works of scientists, Milton Friedman and John Maynard
Keynes, we have seen two different points of view in relation to intervention of the
state in economy.
Friedman is the adherent of classical school of economy. He thinks the state is
evil for economy. The state should be engaged only in social sphere, however and
to this sphere Friedman considered, that is necessary to limit its influence. This
scientist considered, that the economy is "organism" which can adjust the condition
without outside interventions. This opinion is the basic in market economic system.
As against representatives classical directions which have concentrated the
attention on the potential factors of economic growth laying on the side of the
offer, Keynes has emphasized the factors of economic growth laying on the side of
the demand, having destroyed thus prevailing up to him in an economic science
representation about automatic achievement of balance between a cumulative
supply and demand. Same John Keynes has undermined belief in internal
regenerative forces of a market mechanism and has proved the theory which
justified intervention of the state in economic processes. This opinion is a basis of
the mixed economic system.
Recently the majority of economists think, that economy is more effective at
the mixed economic system.

Bibliography.
1) Экономикс: принципы, проблемы и политика: Пер. с 13-го англ. изд. –
М.: ИНФРА-М, 2001. – XXXIV, 974 с.
2) История экономических учений: Курс лекций. – М.: Юристъ, 2000. – 285
с.
3) История экономических учений в вопросах и ответах: Учебно-
методическое пособие. – М.: Юристъ, 1998. – 192 с.