Ludvig von Mises( Frerich von Hayeks mentor).

Hayek-Austrian Milton Friedman- Ch

icago School of Economics John Maynard Keynes- Cambridge University Jon Kenneth
Galbrieth-Harvard Part-1 '17-October Boplshevik revolution- Lenin. By '21 Lenin
said farmers could own la nd, sell crops, but the Bolsheviks were outraged since
it was against the ideals of Marxism.Lenin died. Joseph Stalin imposed a strong
er Socialist hold on the economy. After the 1st World War UK and US, Allied Powe
rs, had ripped Germany for Reparat ions; German economy slowed and inflation (st
agflation) was so high that a glass of Beer cost 1 billion Reichsmark. Fascim se
emed the most promising ideal.Hitler rose to power. After Great Depression, Keyn
esian Principles came into effect. Keynes principle- (Inventor of)Macro economic
s( GDP,Inflation,unemplyoment rate etc);Central Planning; Before '29- US had a f
ree market policy, until the radio stock bubble (R.C.A.). F.d.Roosevelt('33 to '
45) started implemening Keyne's "General Theory". US econo my slowly revived and
by '40 was up and rising.
After World War-2, Keynes Attended the Bretton woods Conference in '44. Truman('
45 to '53), Churchil, Stalin emerged as the victorious allies. Central Planning
seemed to impress all the nations present at the conference. UK went to election
s in '45; Churchil(Conservative) wanted to implement Hayek's theory of Free Mark
ets. Clement Atlee ( Labor Party) supported Keyne's principles of Central Planni
ng. Even though Churchil Won the war, he couldn't win the peace, and lost in the
ele ctions. Labor took power and private owners were compelled to sell their bu
sinesses.Mixe d economy was created,(newly nationalised industries alongwith pri
vate enterpris es coexisted). Welfare care was provided free of cost. This was s
aid to be bette r than allowing gamblers. Erhard, Head of the Allied Occupation
of Germany, believed in Hayek's ideas. After 2nd world war German economy was in
shackles, hyper inflation prevailed, n o price controls could control the infla
tion. Black Market had formed. The Deuts chmark was introduced as the new curren
cy. Erhard abolished all price controls. Black MArket Disappeared. Then began Ge
rman Economic Miracle. It overtook Britai n's more planned economy. India too mo
delled itself on a Socialist ideal after independence, under Nehru c entral plan
ning prevailed. J.fKennedy('61-'63) also believed in Keynes. After 30 glorious y
rs, stagflation rose,1963. Food prices went up, question was whether to fix a fr
eeze on the prizes.Richard Nixon('69-'74) was in favor of doing something( We no
w knw that nothing shoud ha ve been done(Market forces would adjust the prices))
.

. Prices kept on rising. PRice controls created shortages. London '73- Britain's
mixed economy was also in troublePrice controls were being used here as well. T
HE GOVT even decided the price of taxi fares, etc..(unbelievable) Ted Heath ('70
-'74) was blamed and Conservatives were voted out of office. Labor (74-79). Keit
h Joseph was a minister in the Conservative govt. He knew where they went wr ong
and they needed to change the conservative policy. At the Institute of economic
Affairs(founded by Hayek).Joseph preached free mark ets. Attacked mixed economy
. Joseph was a major influence on MArgaret Thatcher(79-90) By 74 Hayek sensed th
e world beginning to go his way. He got Nobel Prize in that year. 74 was a cruci
al year. Us economy was in shackle for first time since great depression. Chicag
o School thought that price control were limting growth and curbing compet ition
. Regulations meant that major carriers like PanAm never had to compete with new
c omers. LAkers airways offered cheaper air tickets. Jimmy Carter (77-81) In 78
the Civil Aeronautics Board was Shutdown. Competition was the new rule.Alt houg
h the effect was visible 20 years later. But inflation went out of control in 81
, Carter's Keynesian policies(apart from that in C.A.B) wern't producing any res
ults.Carter lost the elections in 81. With the British Economy in decline, strik
es on the rise, People voted for Conse rvative Thatcher. Maggie cut Govt spendin
g; against Keynesian views of increasing govt. spending i n bad times. Maggie be
lieved in Hayek and Friedman's ideas of Free Market. Reagan('81-89) shared the s
ame philosophy as Thatcher. But the only way he could get inflation down was by
Monetary Contraction which m eant Recession for a short time before The Nation f
lourished. "If not Now, when? If not us, Who? " It took 3 years, 79-82 to slay t
he dragon of inflation. Reaganomics- Ltd govt. spending;modest tax rates;deregul
ation. His huge tax cuts led to deficits but the economy started growing steadil
y again . Free market forces were unleashed. Victory in the Falkland Islands( se
ized from UK by Argentina) ensured Thatchers victory in the elections.again.84.
This enabled her to implement the policies upon which she had initially embarked
, but hadnt yet produced any significant results. Atlee's govt. had Nationalise
d all the Major Industries. Nationalisation was Britain's Gift to the World. Now
it was time to come up with an anti-dote for the same. Thatcher ended their(Nat
i onalised industries) dependence on Govt subsidies. Coal miners represented the
l ast bastion of Socialist minds in the Uk. They had to be confronted. The Coal
mi nes were losing money. Previously miners had brought down Ted Heath's conser
vati ve govt 10 years earlier. But the strike collapsed in a year. Privatisation
. Sha res were sold to the public. Electricity. Telephones. Oil.Gas.COal.Steel.T
rains.Planes.Water. Sold off into t he private sector.

Less Govt. at the beginning of the 20th century. The More govt . Then Again less
govt at the end of the 20th century. BAck to the start. Ofcourse not to forget
the rise and fall of Fssascism and Communism.