Apropos the recent Hayek-Keynes debate (see Keynes vs. Hayek BBC debate at LSE–Redux and Podcast), George Selgin (who represented the Hayek side) points me to The Keynes-Hayek Rematch, a nasty attack on Hayek by Robert Skidelsky, who represented Keynes in the debate (he is sometimes called “Lord” Skidelsky by the Brits). As they say, no publicity is bad publicity.
The Keynes-Hayek Rematch
LONDON – The Austrian economist Friedrich von Hayek, who died in 1992 at the age of 93, once remarked that to have the last word requires only outliving your opponents. His great good fortune was to outlive Keynes by almost 50 years, and thus to claim a posthumous victory over a rival who had savaged him intellectually while he was alive.
Hayek’s apotheosis came in the 1980’s, when British Prime Minister Margaret Thatcher took to quoting from The Road to Serfdom (1944), his classic attack on central planning. But in economics there are never any final verdicts. While Hayek’s defense of the market system against the gross inefficiency of central planning won increasing assent, Keynes’s view that market systems require continuous stabilization lingered on in finance ministries and central banks.
Both traditions, though, were eclipsed by the Chicago school of “rational expectations,” which has dominated mainstream economics for the last twenty-five years. With economic agents supposedly possessing perfect information about all possible contingencies, systemic crises could never happen except as a result of accidents and surprises beyond the reach of economic theory.
Note this comment there, BTW:
leftcentre 09:06 19 Aug 11
It’s hard to believe that this column was written by the same man who, half a dozen years ago, said of Hayek,
“The particular threats to liberty that he identified may be on the wane—his book has done its work well—but there are other threats, and the victory of liberty is never secure. Hayek’s key message for us today is surely this: every new restriction or regulation should be judged by its effect not just on the problem that it is designed to solve or the danger that it is designed to avert but by its effect on the system of liberty as a whole. If we are blind to this, we will be left with a damaged system of liberty long after the particular problem or danger has passed away.”
That, however, was upon receiving the Manhattan Insrtitute’s $50K “Hayek Prize.” Perhaps they ought to have spread out the payments!
Update: Selgin’s reply is up at Lord Skidelsky’s Late Punch.