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Development is not obvious. Many political and economic thinkers did not see much improvement in their life-times. Machiavelli lamented the decline of Florence and other Italian city-states. Alexis De Tocqueville described how eighth century France succumbed to revolutionary forces. French philosophes had paved the way for rational autocracy that eliminated other views. French economists gave the state a central role in engineering development. US and English Enlightenment differed from its French counterpart. Schumpeter sketched how capitalist economies developed through cycles of prosperity and depression caused by innovation. Capitalist development came to a halt in the Great Depression. Democratic discourse stopped in countries where infallible leaders seized power and took control of the economy; rights were violated. Frank Knight and Peter Drucker wanted to explain the descent into totalitarianism they experienced in the 1930s Keynes wanted to curb depression by fiscal and monetary policies. Developed economies went through several recessions after 1945. Economic theory has not yet put innovation and uncertainty central, which prompted central banks to adopt unconventional economic policies in the financial crisis of 2008.
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- Progress and Decline
- Chapter 2
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