Hayek's Claim to Fame? Politics, Not Economics

[Schneibster]

Libertarians claim Friedrich von Hayek was a great economist and there was a big debate between him and Keynes. That's actually a myth. What really happened is, Hayek failed at describing what caused the Great Depression: a series of missteps by the US Federal Reserve Board, as proven by Milton Friedman, for which he won a Nobel Prize, as opposed to Hayek, who claimed in 1931 that a further increase in money supply would worsen the depression; the exact opposite of Friedman. In fact, Friedman wouldn't allow Hayek into the economics department when Hayek came to Chicago.

Worth pointing out that increasing the money supply is exactly what the Fed did in 2008-09. That's why we're not in a depression right now. Which is not to say it's not pretty uncomfortable right now; but it's not a depression.

And Hayek is actually more famous, argues the author of the linked article, for his work in politics; The Road to Serfdom was not written at the time of the short and rather pathetic debate with Keynes:

Hayek panned the book for the “almost unbelievable” degree of obscurity of its equations

is pretty embarrassing. It's like criticizing the accounting books for a business for having too many numbers in them.

Worth the read if you want to know anything about economics. As opposed to politics.

[Seth]

Once again you failed to read your own source, or you are deliberately misstating it again. Here's the conclusion of the piece:

That said, it is pleasing to think that Hayek himself may yet turn out to have been a very great economist after all, far more significant than Myrdal or Robinson, when seen against the background of a broader canvas. The proposition that markets are fundamentally evolutionary mechanisms runs through Hayek’s work. Caldwell, of Duke University, notes that, starting with the Constitution of Liberty, “the twin ideas of evolution and spontaneous order” become prominent, especially the idea of cultural evolution, with its emphasis on rules, norms, and decentralization.

These are today lively concepts in laboratories and universities around the world. “It could have been that Hayek was running a different race, and the fact that he didn’t do well in the Walrasian race was that he wasn’t running in it—he was running in the complexity race,” says David Colander, of Middlebury College. Hayek may yet enter history as a prophet of evolutionary economics, a discipline dreamt of since the days of Thorstein Veblen and Alfred Marshall in the late nineteenth century but not yet forged, whose great days lie ahead.

[Schneibster]

You didn't notice Keynes was not mentioned in those paragraphs? Just Myrdal and Robinson.

Of course not. Confirmation bias.

[Seth]

You didn't notice Keynes was not mentioned in those paragraphs? Just Myrdal and Robinson.

Of course not. Confirmation bias.

The author wasn't talking about Keynes, he was talking about Hayek, and he was making the point that Hayek has been grossly underestimated as an economist. Therefore, pot, kettle, black.

[Schneibster]

You didn't notice Keynes was not mentioned in those paragraphs? Just Myrdal and Robinson.

Of course not. Confirmation bias.

The author wasn't talking about Keynes, he was talking about Hayek, and he was making the point that Hayek has been grossly underestimated as an economist. Therefore, pot, kettle, black.

What does one do when people just make shit up?

But the claims conservatives are making about the role he played as an economist are beginning to smack of Ruizismus. That is, they have jumped a caricature out of the bushes late in the day and claim that their guy ran a great race.

You do realize he's talking about you there, right?

[Svartalf]

I'm relieved, the title had me wondering just what Salma Hayek had to do with economy and politics.

[Atheist-Lite]

Printing a lot of digital money kept the ship afloat for a couple of more years but at what price? This isn't likely to end well. Ultimately there is no possiblity of upscaling a false a economic reality which the markets to their credit signified a few short years ago. There is a way of buying time, and the only cost is that the time is used up when it could have been spent constructively. I'm not a libertarian, I'm a political and economic atheist. At this moment it is expedient to realise the socio-economic fuse is lit and there is no way of avoiding the day when the bills come in now. Prepare for hell on earth because it is coming and there'll be lot less saps around once it is over.

[Schneibster]

The explosion's all over, Crumple; that was 2008.

[Seth]

You didn't notice Keynes was not mentioned in those paragraphs? Just Myrdal and Robinson.

Of course not. Confirmation bias.

The author wasn't talking about Keynes, he was talking about Hayek, and he was making the point that Hayek has been grossly underestimated as an economist. Therefore, pot, kettle, black.

What does one do when people just make shit up?

I keep asking myself that question about the shit you make up. The answer is: debunk it. With you, it's pretty damned easy to do.

[Schneibster]

You didn't notice Keynes was not mentioned in those paragraphs? Just Myrdal and Robinson.

Of course not. Confirmation bias.

The author wasn't talking about Keynes, he was talking about Hayek, and he was making the point that Hayek has been grossly underestimated as an economist. Therefore, pot, kettle, black.

What does one do when people just make shit up?

I keep asking myself that question about the shit you make up. The answer is: debunk it. With you, it's pretty damned easy to do.

Especially when I quote the article and it says you're wrong again.

And then you leave it out of your reply.

[Seth]

The explosion's all over, Crumple; that was 2008.

It hasn't even started yet. What we've been through since 2008 is just the precursor tremors to an economic earthquake that's threatening to destroy the entire economy of the planet, which will result in widespread chaos, disorder, destruction and death. Printing more money to cover the debt is what Germany did in the days of the Weimar Republic, and it failed miserably, just as Keynesian economics have failed every time they've been tried.

Only the creation of wealth will resolve our economic problems, and until the engines of economic wealth are running again, it is imperative that we stop all governments from spending any more money, all of which has to be taken from the economy first, or simply printed as fiat money which devalues the currency currently in circulation.

The root of the economic crisis in both Europe and the US is overspending by government, mostly on socialist entitlement programs. The solution is to end that spending right now, and take to government with a broad axe, cutting programs, employees and expenses on a broad scale. The place to start is by amending the Commerce Clause to restrict Congress to mediating disputes over interstate commerce (the actual movement of goods across state lines) brought to it by the legislatures of the states, and NOTHING ELSE in regards to domestic commerce.

That alone will eliminate perhaps 75 or 80 percent of the federal government and its spending, returning all that wasted wealth production capacity back to the states and the people.

Hayek was absolutely correct that central planning does not and cannot work, and the economic crisis in Europe proves it beyond a shadow of a doubt. Time to drive a stake through Keynesian idiocy once and for all.

[Schneibster]

The explosion's all over, Crumple; that was 2008.

It hasn't even started yet. What we've been through since 2008 is just the precursor tremors to an economic earthquake that's threatening to destroy the entire economy of the planet, which will result in widespread chaos, disorder, destruction and death.

And black helicopters. With UN troops. To take us all to the FEMA camps.

[Atheist-Lite]

The explosion's all over, Crumple; that was 2008.

It hasn't even started yet. What we've been through since 2008 is just the precursor tremors to an economic earthquake that's threatening to destroy the entire economy of the planet, which will result in widespread chaos, disorder, destruction and death.

And black helicopters. With UN troops. To take us all to the FEMA camps.

No, you mean black swans surely?