History of Economic Thought and Globalization Questions Walras theory of Tatonnement is a form of instantaneous auction whereby an agent computes demand for a commodity at every probable price and submits the price to an auctioneer. The setting of the price is in such a way that the total demand across all agents is at equilibrium with the total amount of the commodity. As a result, the theory is in line with supply and demand. Alfred Marshall’s important contributions inclined on his being the founder of neoclassical economics. He extended expounded the classical focus of economics on the market economy and simplified it as a human behavior study. He used utility analysis as part of theory to explain demand curves and the concept of substitution. He also combined the aspects of demand and supply in form of utility and cost production. In Chapter 14, apart from Mises showing the impossibility of socialism, he argues for capitalism. He is against the main ideas socialists and other critics argue against capitalism. According to Mises, a centrally premeditated system cannot replace some other form of economic computation for market prices since there is no such alternative in existence. He concludes that capitalism is a true form of economic egalitarianism. Socialism focuses on the current ideas of economic inequality and establishes that wealth can exist for a long time only to a level that wealthy producers prevail in meeting consumer demands. Mises indicates that there is no propensity to domination in a free market economy. Oskar Lange responded to Mises through his theory called Lange Model. He approved that according to Mises, calculations should be done in value terms as opposed to relying on explicit natural or engineering principles. However, he argued that a person could attain the same values without capital markets and private tenure of the techniques of production. According to Lange, his model advocated for socialism since the ways of production would be in the hands of the public with benefits going to public firms associated to society within a social dividend. Hayek acknowledged and stressed that if a fully adjusted system of prices can provide a system of synchronized and equally reinforcing signs, such a system should incline on prior groping procedure of market discovery. He perceived this process as comprising of market competition. According to him, this was not a state of affairs in line with the principles of perfect competition. He argued that this was a hard process of innovative probabilities. According to Schumpeter, understanding capitalism inclines on a revolutionary process of constant creativity and destruction. He asserts that innovation is a critical dimension of economic transformation. Economic change typically revolves around creativity, commercial activities, and market power. In his argument, he proved that innovation-inclined market power could offer better outcomes as opposed to invisible hand and price competition. Schumpeter says that advancement in technology often create short-term monopolies, opening a channel for abnormal profits that would soon be overtaken by rivals and imitators in the market. Keynes held a belief in activist policies to moderate the breadth of the business cycle. As opposed to perceiving unbalanced government budgets as erroneous, he advocated for countercyclical financial policies that go against the movement of the business cycle. He encouraged deficit expenditure on labor-intensive infrastructure programs to stir-up employment. The move will not only stabilize wages during economic downturns, but also raise taxes to cool the economy and hinder inflation.