Classical economists reject the conception of cyclical unemployment and alternatively suggest that the invisible hand of free markets will respond quickly to unemployment and underutilization of resources by a fall in wages followed by a rise in employment. Similarly, Hayek and others from the Austrian school of economics argue that if governments intervene through monetary policy to lower interest rates this will exacerbate unemployment by preventing the market from responding effectively.
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They both believed that capitalism is a stage of economic development in which the potential of humankind cannot fully develop. Both came to the study of economics questioning the fundamental assumptions of existing economic theory, and thus each took more of economic theory to be problematic than did most economic theorists. Both conceptualized the capitalist system as a whole, yet with the realization that the economic realm hardly constitutes the totality of human experience and thought. Need essay sample on "Marxian Economics" ? We will write a custom essay sample specifically for you for only $/page