By Nolan Warner

Perhaps the most fascinating aspect of economics is its astounding complexity, in that two Nobel prize winning experts can disagree almost entirely on how a society should manage its economic policy. Paul Krugman, a liberal economist, is of course extremely well versed on the subject. He believes in and preaches the word of the Keynesian economic theory. The late Milton Friedman, another hugely acclaimed economist, was staunchly conservative (fiscally) and almost never strayed from his deeply classical views.

While it is remarkable that individuals can come to their own conclusions and deeply philosophize, it sometimes leads us to the legislative deadlock that we are currently experiencing. Most people believe in one or the other, Keynesian or Classical, Democrat or Republican. What I propose in this article, a proposition that devout followers of one ideology or the other may scorn, is that a knowledgeable and open-minded observer of the economy and our governance may very well believe in both methodologies harmoniously. Like any medicine, I believe, which economic policy to prescribe is circumstantial. But before we delve into that concept, I will first give a brief explanation of both sides of the spectrum, for those of you who don’t know.

Classical economic practices are those most resonant of 18th Century economist Adam Smith’s philosophies. Smith is commonly referred to as the father of economics, and although many modern economists disagree with his opinions on the role of government in a free market, his basic outline of economic theory cannot be reasonably disputed. Over the course of history, many leaders have implemented policies based on a classical doctrine, from some of our earliest presidents to Ronald Reagan. In essence, classical economic ideology holds that the government should have a small role in the economy, letting the free market “do its thing” without being bogged down by regulation and interference. Classical economists, who believe that even an economy in crisis will eventually improve through its natural cycle and that there’s no need to run up debt trying to improve it manually, generally disapprove of government spending. Today, those who tend to follow this classical ideology tend to vote for thrifty and frugal Republicans, and scorn President Obama’s attempts to stimulate the economy and cover expenditures, such as health care, with Federal spending. They also criticized FDR’s policies during the Great Depression, for which he received a great deal of criticism at the time.

Keynesian economic theory largely opposes the aforementioned Classical model. Developed during the 1930s by an English economics professor by the name of John Keynes, the Keynesian ideology promotes government spending, holding that a struggling economy must be propped up by a generous fiscal policy. Modern liberals are generally supportive of the Keynesian ideology. Keynes believed that a free market inevitably fails to sustain equity, and that it is sluggish and incapable when it comes to recovery. Left alone, Keynes argued, the market does not always allocate resources efficiently, does not always ensure general equity, and can lead to economic collapse. Indeed, Keynes observed and inhabited a world ripe with economic strife, which came as a result of a relatively unrestricted market that was crippled, one could argue, due to its lack of a government “spine.” Government spending and regulation, most modern Keynesians believe, is key to reviving a suffering economy, and is extremely beneficial to a healthy one.

Now, back to my earlier proposition. I propose to you, the reader, that these two ideologies can coexist in a modern society, being implemented based on circumstance, rather than as standard. I believe that a strong economy is one in which government should have little participation. While I strongly advocate precautionary regulations to prevent collapse, it seems to me that government spending should be minimal during such a time. This classical environment would allow the government to allocate its revenue towards servicing debt, incurred during crisis through Keynesian-minded spending, and would also prevent waste. Many Keynesian thinkers would, at this point, note that the market will fail without intervention. However, would this be better avoided by regulation rather than government dollars? I see simply no need for much spending at a time of prosperity; projects to strengthen our future, such as infrastructure and research, should be saved for times of economic illness, as they can be used to stimulate the economy. During times of such strife, however, the government should kick into gear and inject money when and where it can to heal the sickly market. This money can be put towards initiatives that stimulate the present and strengthen the future.

Of course, there are so many intricacies to take into consideration that I have failed to mention. This very basic analysis and proposal is by no means perfect, and I would never have such hubris as to suggest that to be so. Undoubtedly, there is something in my argument that you, the reader, disagrees with, or is uncertain about. That's a good thing. That's what keeps arguments and intellects sharp, and leads to the conception of new ideas and improvements.