In case you don't know, the economic theories of Friedrich von Hayek and John Maynard Keynes are the ones that Republicans and Democrats frequently use (and often distort) to defend their own economic theories. For example, if you hear the Democrats talking about using defecit spending to boost the economy during a recession, they're paying homage to the theories proposed by Keynes. On the other hand, if you hear Republicans talking about free markets, and the dangers of government control over the economy, they're relying on theories promoted by Hyaek.
Spike TV recently put together a rap video of these two economic theorists. It's pretty old school. Check it out.
I have honestly never heard of either of these two guys though I would guess I would be passingly familiar with the actual theories. Do you have any non Wikipedia links to either of these?
I don't.
I did read, "Who Killed John Maynard Keynes" and as a laymen, I would say it's pretty approachable for the first three-quarters of the book. The rest of it took some pretty serious concentration to even get a glimmering of what the guy was talking about, but it was still interesting.
I have honestly never heard of either of these two guys though I would guess I would be passingly familiar with the actual theories. Do you have any non Wikipedia links to either of these?I don't.
I did read, "Who Killed John Maynard Keynes" and as a laymen, I would say it's pretty approachable for the first three-quarters of the book. The rest of it took some pretty serious concentration to even get a glimmering of what the guy was talking about, but it was still interesting.
Is it pro or anti Keynesian?
Is it pro or anti Keynesian?
It isn't really either. It was written in the late 1980's as a history on the rise and fall of Keynesian economics in American politics, with a vague attempt to explain why it lost favor.
I read this as Hayek vs. Kanye at first.
Seemed a bit of an unfair matching.
Is it pro or anti Keynesian?It isn't really either. It was written in the late 1980's as a history on the rise and fall of Keynesian economics in American politics, with a vague attempt to explain why it lost favor.
Mmm...I'd say its technically anti-Keynesian but barely so. Essentially the economist who's behind this is no Keynesian, that said he does try and present a fair and balanced view and mostly succeeds.
EDIT: Sorry I thought you meant the video not a specific book. I have no idea in regards to the book but know a little about the video.
Economics, the dismal science, my worst nightmare from my Freshman year of college...
I’m going from memory here, but will try to summarize what I remember about Economic Schools of thought – feel free to correct me (like I had to ask.)
There are three main schools of economics: (1) >Keynesian< (2) >Austrian< (e.g. Hayek) (3) >Chicago School<.
To a large extent they overlap on the basics, but have very different views on how free markets operate, and what the effect of Fiscal Policy can be.
Keynesian:
o Free markets are good, but need to be guided.
o Yes to >fiat money<
o Yes to a >central bank<
o Yes to government intervention via >fiscal policy< (e.g. a stimulus package)
*Chicago school critique: Ok with first three, but not the last point. By the time the government figures out what to do it is way too late; and there is no real way for them to figure out what to do anyways, because markets are perfectly efficient. So, government should *not* intervene in free markets. The central bank can keep inflation in check with >Monetary Policy<.
*Austrian school critique: Markets are efficient by nature, and since human behaviors and emotions are so hard to predict don't even try. Keynesians are completely wrong on these four points. Fiat money is to blame for the bubbles, because it is like throwing fuel on a fire. And is responsible for the large bubbles that burst and cause havoc. Get rid of fiat money, have currency based on gold, silver, etc. The central bank is useless. Governments can never guide markets because they do not know how.
.
Chicago School:
o Free markets are efficient, and need some enforcement of rules (e.g. insider trading.)
o Yes to fiat money
o Yes to a central bank
o No to government fiscal policy
*Keynesian critique: The government can help during recession with insightful fiscal policy.
*Austrian school critique: Same as above.
.
Austrian School:
o Free markets are efficient; leave them alone, and don’t tinker, because we can not predict human emotions.
o No to fiat money
o No to central bank
o No to government fiscal policy
*Keynesian critique: Hurray for free markets. Fiat money facilitates economic expansion. The central bank can keep inflation in check with Monetary Policy, and the government can make insightful contributions through Fiscal Policies.
*Chicago School critique: Markets are completely efficient. Government should absolutely stay out of the markets, but why limit ourselves by not having fiat money. The central bank can keep inflation in check via targeting interest rates.
If I made any typos that confused you, just assume you know what I meant.
Also, I have no idea what I am talking about.
:-)
Seriously, most overrated "talent" on the planet.
Srsly? I do not know, I am thinking Taylor Swift. I mean, she is o.k., but come on.
Economics, the dismal science, my worst nightmare from my Freshman year of college...
Thanks.... Its a hard subject. And judging by everyones overreactions and the current fiscal issues, one more people need to study. Politicians too.:)
Personally, I favor the Chicago School. And I like what they say about the existence of Hedge Funds.
This was just featured on "The Pirate's Dilemma," a website dedicated to the freedom of information.
Damn, that song is tight. My money's on Hayek, by the way.
It is disappointing the Chicago School is not included. The Chicago School has produced more Nobel Prize winners than the Keynesians and the Austrians combined.
Where I think Keynesianism wins out is that this discussion is not fully about economics. When things really go to hell the government needs to be seen to be doing something. Just stating that it'll all work out in the end may or may not be the actual best option but in the end it simply does not matter - the people won't wait for things to sort themselves out even if it could be shown to be the best option.
Doing nothing is flirting with complete destabilization and, potentially revolution. If the Americans had chosen not to bail out their banks historians may well have been looking back on that as a watershed moment in the history of the current era due to the fall out and what that did, both to the American regime and to other regimes around the world.
In other words even if Keynesiam does introduce some bad habits into the economy, even if that will distort some things in the future, its likely still worth it because the alternative is potentially catastrophic.
Hayek's model is pretty pointless if the state itself has torn itself apart and is in the midst of a civil war, the ultimate catalyst for which was a complete collapse of the economy.
Hence both Bush and Obama where on board with a stimulus plan, since neither was willing to risk going down in history as the last President of the United States of America.
Ogre pointed me to >THIS< podcast from www.econtalk.org .
Larry White of George Mason University talks with EconTalk host Russ Roberts about Hayek's ideas on the business cycle and money. White lays out Hayek's view of business cycles and the role of monetary policy in creating a boom and bust cycle ...
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I knew I had heard of Keynes before but it was due to his thoughts on Eugenics not for his economic theories.
Ogre pointed me to >THIS< podcast from www.econtalk.org .
Larry White of George Mason University talks with EconTalk host Russ Roberts about Hayek's ideas on the business cycle and money. White lays out Hayek's view of business cycles and the role of monetary policy in creating a boom and bust cycle ...
I'd not say I agree with all of what was contended here but it was a good podcast. Hayek's views are very useful in understanding why we ended up in this mess in the first place. If true then presumably much of the blame can be laid at Greenspan's feet as he kept interest rates low and, arguably contributed to the housing bubble.
I still like Keynes for dealing with the mess after its become wide spread, even if Hayek's concerns are valid mainly because some mis- allocated resources during the period where one is trying to climb out of a bad recession is pretty trivial to the potential, non economic, fallout from doing nothing.
More fun with economic music HERE.
This from a broadway musical piece produced for National Public Radio for a story they did on the Hedge Fund Magnetar.
P.S. Everything I said in this thread I made up.
It's a bit of a false debate, as very few if any economists truly follow Hayek or the Austrian school anymore. It's really more Keynes vs Friedman.
To put it in examples of people:
Keynes = Krugman
Friedman = Greenspan
The first predicted our economic collapse, our descent into debt, and our increasing problems with unemployment.
The second lead us into two+ bubbles that swiftly popped to the detriment of the entire economy.
Can you guess which one I follow? :p
