Sophie Uralowich MW 5:30-6:50

Some Things Just Cant Be

To begin this essay I would like to start off saying that this is a very complicated question to respond to. Trying to say a point in history is incorrect or was wrong is hard and easy. Hard to disagree with in the way that what happened, happened and easy because you can compare what happened in the past to the future. But there was one thing that stood out in my notes and discussions from class and that was the theories for the distribution of power being to either to the people of America or the government that looked after America. This was defiantly a hard task to handle during this time mostly because America was starting to grow stronger economically and had also just began a war in 1776 to establish itself as a new and independent nation from Britains stronghold for religious, political and of course economic reasons. Not only was America a highly prosperous nation, but the new land was also just that, new, and oil believe that after they colonies started to realize their potential as a leading trading power they decided that they needed to be independent from Britain and remove itself from the strain of providing for Britains needs and not their own. The struggle that occurred in the first travels to America was not the most pleasant and they had to fight and hold their ground through death and disease to finally get to a position that was positive and successful for them. After all this, they then had an internal struggle of deciding how society would be taken care of in a way that it would be able to survive and thrive. Adam Smith had an idea in the late 1770s that we should just let things be and there would be and an invisible hand would take care of the economy if it were ever in trouble, but the economy was perfect and that the self-interest and needs of the society would be met overtime. Basically giving the power to the people and having as little involvement from the government as possible, a capitalistic idea for society as a whole. The problem with this idea was that if you just sat back and let things go, chaos could be the result. Anarchy could consume the new nation and everything that was worked on for so long could be demolished over a short period of time, and that has actually almost happened a few times. About four recessions every 14-20 years over a hundred year time period. But could that also mean that Adam Smiths theory was correct? That eventually things would take care of themselves after a collapse? At the same time, it does keep happening multiple times so it isnt a permanent solution.

Another theorist that was discussed was John Maynard Keynes a man who thought in a way that was opposite of Adam Smiths ideals. In the late 1800s Keynes theory was that the economy needed government intervention because it was not perfect on its own. This idea would lead to military and politicians having control over many aspects of the economy including banking, laws, labor, taxes and healthcare. This theology is similar to a modified capitalist and somewhat communist economy where public has little to no control and there is little economic freedom because almost everything is decided for the good of the society by the government, but the public feels they still have a role. This way of distributing power gives government too much control over the economy which could possibly lead to society resenting government and lacking true freedom the nation had fought for during the revolutionary and civil wars. But also at the same time having so much control over the economy could save it from going into a recession by altering and guiding which direction society needs to move in to continue forward. Could this theory be the reason we have recovered from recession? Does this prove that Smiths theory does lead to chaos and recession having Keynes theory come to the rescue and save the day? This idea could be a simple solution but continuing to have such a strong grip on the economy by the government goes back to being control by Britain and following strict ruling. Both of these theories are way too extreme. One gives too much power to the people which potentially leads to chaos and uncontrollability of the economy and the other gives government too much control and not enough freedom for the people to maneuver within the economy. A middle ground of control and freedom needs to be met with a mixture of each becoming what we call modified capitalism. This seems to be the way that Americans decided to move towards after identifying the downfalls of each theory on their own. Although in my own opinion, though we are involved in a modified capitalism, the government has a little too much control over certain issues we deal with in todays economy. The distribution of power has become such a sought after delicacy, that the people who are in power already just want more. Greed has made us move more towards Keynes theory overtime, and some would say not by choice. History tends to repeat itself and having such a government controlled economy could lead to a revolution giving the people power once again and in turn eventually leading to another recession because there is no control. Many people in the world tend to lead one way or the other, the people who fall in the middle arent as vocal or noticed as much as the polar extremes of each ideology. Like the great Einstein stated: Insanity is doing the same thing over and over again and expecting different results. It seems America has been on that path for some time and a bigger change needs to be made.