MEET SOME OF THE GREATEST ECONOMISTS OF OUR TIME:

1. JOHN MAYNARD KEYNES

The flow of history is a river that most ride, but every so often a man, through sheer brilliance or force of will, builds a dam and redirects the course of civilization. John Maynard Keynes was such a man. As the most influential economist since 1900, some would argue in history, Keynes' influence is difficult to overstate. He was the son of a successful economist and trafficked in the circles of the intellectual elite from his youth. He would become the leading figure in economics at Cambridge at a time when Cambridge became the leading center of economic study in the world.

It is difficult to appreciate Keynes' impact until one compares what economics was like before him with what exists today. Before Keynes the world used the relatively simple gold standard. Money had a straightforward definition, namely it equaled a certain weight, and economics followed certain basic, common sense principles. Everyone knew that saving money was a good thing, and that it formed the foundation of future investment. Everyone also knew that debt was a dangerous drug that was only to be used in small doses.

But Keynes challenged the intellectual orthodoxy of his day. He argued that a gold standard shackled the hands of policy makers. For Keynes, an elastic currency allowed governments to spend money when the economy was most in need of new, economic energy. Under Keynesianism, deficit spending was the antidote to recession. His ideas informed governments' response to the great depression, and played a pivotal role in the creation of a new monetary standard at the close of World War II. To this day, many of Keynes' most radical ideas are still economic orthodoxy. 

2. Friedrich August von Hayek (1899-1992)

Friedich August von Hayek, often referred to as F.A. Hayek, was the foil to Keynes' early rise to prominence. This Austrian-born economist who later settled in Britain had a distinguished career. He earned two doctorates, one in law and the other in political science. He was made a member of the Order of the Companions of Honour by Queen Elizabeth II at the urging of Margaret Thatcher, the first person to receive the Hanns Martin Schleyer Prize, a recipient of the U.S. Presidential Medal of Freedom under George Bush, and a winner of the Nobel Prize. 

Hayek was especially known for his contribution to our knowledge of changing prices and their ramifications. According to Hayek, changes in prices provide information which then allow individuals to adjust their expenditures. Under his view, changes in price are an essential element in communicating the state of the economy. This provided a powerful argument in defense of free markets, because manipulating markets encouraged consumers and entrepreneurs alike to make poor investment decisions, whereas free markets communicated truths about the actual health of the economy and therefore the future. Hayek, more so than anyone else in the 20th century, kept the Austrian School in mainstream academic discussions of economics. Although now largely underappreciated in left-leaning western nations, he has become the chief economist for nations recovering from communism and looking to move in a free market direction.

3. Leon Walras (1834-1910)

Leon Walras was the son of economist Auguste Walras. This Frenchmen was educated at the University of Paris and became a professor of political economy at the University of Lausanne. He was one of the first figures to use marginal utility, and became the first person to mathematically model general equilibrium in Elements of Pure Economics. This made him an early pioneer in broader, general equilibrium theory. Walras spent substantial energy trying to draw attention to his text, but unfortunately its mathematical sophistication was too intricate to allow the thinkers of his day to adequately appreciate it. Like many great minds, he would not be fully recognized until after his death. He began his models with two parties working in a barter system and then slowly built greater and greater levels of complexity into his system. Despite being largely known for his more theoretical work, Walras was also very interested in practical application. He wanted to improve society with moderately socialist reforms, but passed away before completing a full, systematic treatment on the subject comparable to what he achieved with Elements of Pure Economics. 

4. Eugen von Böhm-Bawerk (1851-1914)

There are few economists whose ideas are both more relevant and challenged in today's world of negative interest rates than Eugen von Böhm-Bawerk. This man was born and educated in law in Vienna. His career oscillated between professional occupations, which included three terms as minister of finance, and academic ventures, including professorships at both the University of Vienna and Innsbruck.

Böhm-Bawerk was diametrically opposed to Karl Marx, and alongside Friedrich von Wieser, greatly popularized the Austrian school of economics. His contribution to the field centers on "roundaboutness," or the concept that physical capital investment both lengthens production and improves productivity. He was one of the first economists to incorporate the passage of time into his theories in a clear and precise way. He noted that people have a time preference. They prefer their desires met sooner rather than later. This time preference is what allows for meaningful interest rates. People will borrow in order to buy today and pay later because they are typically more concerned about the present than the future.

Until very recently, one could make a good argument that Böhm-Bawerk undergirded our entire financial system. After all, the world's current economic order runs on banking and debt, or stated otherwise, if it were not for the phenomenon that Böhm-Bawerk studied, the modern world as we know it could not exist. However, at the time of this article's creation, well over 400 million people are living in nations with negative interest rates. Thus, the question poised to current economists is, "was Böhm-Bawerk wrong, or have we utterly perverted the economic order?" And likewise we can also ask, "if he was wrong, then how did we manage to build an entire economy based on debt?" Surely the answer to these questions will remain controversial for some time.

5. Alfred Marshall (1842-1924)

Alfred Marshall was one of the most influential economists of his generation. His book, Principles of Economics, was a standard textbook in the field for decades. The text unifies marginal utility, supply and demand, and costs of production under a larger theory. He also contributes to discussions of increasing and decreasing returns in production. Like many economists of the period, he was first trained in mathematics and even served as a professor in that field before later switching to political economics. But despite his extensive mathematics background, his work typically relegates complex equations to footnotes. His work's consequent readability may have contributed to its influence.

Marshall's theory revolves around price determination. For Marshall, price results from the relationship between demand and supply and can behave in different ways based on different time periods. In the short term, price is chiefly effected by demand, but in the long term, the cost of production becomes much more significant. At all times, the price is heavily influenced by how competitive the market has become. Marshall was also famous for his scissors analogy, in which he spoke of utility and cost of production as two blades working together as they do in a pair of scissors. 

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