Keynesian view (mainstream)
Named after John Maynard Keynes (The General Theory, 1936). Main ideas:
- Recessions come from too little total demand.
- Governments and central banks should fight them by spending more and lowering interest rates.
- Mild, stable inflation is useful, which is why central banks target about 2%.
Most central banks today work within this broad tradition.
Austrian view
From Carl Menger, Ludwig von Mises and Friedrich Hayek. Main ideas:
- Interest rates are prices that coordinate saving and investment. When they are pushed artificially low, they send false signals and cause booms that end in busts.
- New money benefits those who receive it first.
- Money works best when no authority can expand it at will.
In 1976 Hayek went further in Denationalisation of Money, arguing that the government monopoly of money should be abolished and that private money could compete.
Where Bitcoin fits
Bitcoin was not built by an economics school, but its design matches Austrian ideas closely: a fixed supply, no central issuer, and money chosen freely by users. That is why many Bitcoiners read Austrian economists.
The Keynesian worry, and the answer
Keynesians worry that money that cannot expand makes it hard to fight recessions. Bitcoin's answer: the cost of "fighting" crises with new money is paid by savers and builds up debt. With hard money, prices and wages adjust instead, and bad investments are cleared rather than propped up. See sound money.
Takeaway
Keynes favours managed money; the Austrians favour rule-bound money. Bitcoin is rule-bound money.