Keynes vs Hayek; Keynes wins on points.

[owedtojoy]

A fantastic idea for a debate. Take two groups of economists, one espousing the ideas of JM Keynes, the other that of F Hayek. These two men, friends when they were both alive, have become polar opposites in economic philosophy.

Let the teams debate before a knowledgeable audience, against a backdrop of economic disaster, with a vote for the one with the best prescriptions.

Well, it's been done .. and Keynes emerged as the clear winner. Why? Because Keynes offered clear analysis and recommendations corresponding to the real world.

Hayek was the original Dr No - he knew what he was against, but was much less successful at explaining what he was for. In the end, the brutal Chilean regime of General Pinochet was the best he had to offer. I am not sure who wants to go there, maybe the Tea Party.

Keynes Trumps Hayek in Asia Society Debate Over Economic Policy - The Daily Beast

In the Asia Society debate, Keynes was a proxy for Obama’s economic policies and Hayek played the same role for GOP presidential candidates—with most of the audience siding with the Keynesians who think the government should do something about the economy

[Con Gallagher]

When did economic purist theory ever have any application in the world of Irish parish pump politics?
McCreevy's mantra of when I have money I spend it, when I don't, I don't is more realistic reflection.

[owedtojoy]

When did economic purist theory ever have any application in the world of Irish parish pump politics?
McCreevy's mantra of when I have money I spend it, when I don't, I don't is more realistic reflection.

McCreevy was the classic anti-Keynesian, in fact his statement probably had poor ould JM spinning in his grave.

Keynes' recommendation is that when Governments have it, they save it. They save it for the recessionary years when the economy needs pump-priming. Keynes' regarded slumps as a necessary concomitant of the freedom of the market, what he called "animal high spirits", and government should be prepared to even out the business cycles that result.

Keynes believed that in boom times, private enterprise should be perfectly well able to get along on its own. The government-driven taxation-friendly Irish and US housing booms would have disgusted him.

Some of Keynes' ideas are definitely old hat - I do not think anyone now believes that Governments should own "the commanding heights of the economy" - transport, heavy industry etc. Hayek has definitely won out there, and Keynes in the 1970s would have also supported of a lot of Thatcherite policies in regard to unions and the labour market.

[Analyzer]

Cowen and Ahern were the two heavy hitters of Irish Keynesian. They knew how to spend money.

[NotoriousFin]

Very misleading analysis of it:
The pre debate figures in the crowd were: 47% Keynes, 33% Hayek, 20% Undecided.
The after debate figures were: 52% Keynes, 42% Hayek, 6% Undecided.
So essentially there were only 20% to play for.
Keynes's support went up 5% whereas Hayek support went up nearly twice that with 9%. In short, Hayek took 2/3 of the undecideds who actually, well, decided.

[KingCash]

So basically Keynesianism won? Okay then, we should start on the road of his economic beliefs. Perhaps it will get us out of this mess....

[owedtojoy]

So basically Keynesianism won
? Okay then, we should start on the road of his economic beliefs. Perhaps it will get us out of this mess....

If anything, we are heading in the opposite direction.

I no longer believe that untramelled stimulus would work .. in fact, it is a good time to take the axe to a lot of useless public spending, like corporate welfare, and rationalise the taxation system to eliminate loopholes. But focussed stimulus would have a good chance.

[Cassandra Syndrome]

That's QED folks.... Time to burn all them books by Hayek, especially that Road to Serfdom one. Warning us of the danger of tyranny that inevitably results from government control of economic decision-making through gradually incremental increasing central planning? The abandonment of individualism, classical liberalism, and freedom inevitably leads to socialist or fascist oppression and tyranny and the serfdom of the individual?

Imagine that reality? Like we were dictated from central planners say in Brussels under stealth from Germany and France and say in the past few weeks they without any resistance denied say Greece having a referendum and say appointed 2 like minded technocrats to be leaders of Italy and Greece. Real Twilight Zone script there, eh?....

Try doing the same experiment as the OP article with a sample of people who live in the real economy from working class and middle class backgrounds, Hayek would rout Keynes on points. Simply because he better understood the human condition and human action and how dynamic real markets are and how the discovery principle works between producers and consumers in the real world, without the use of complex mathematical models.

BTW, The GOP claim to be Hayekian, but about 10% of them have probably read him and that's the Ron Paul section. Hayek was not a Conservative.

Anyway best to illustrate this debate through the medium of Hip Hop. Enjoy...

[pragmaticapproach]

That's QED folks.... Time to burn all them books by Hayek, especially that Road to Serfdom one. Warning us of the danger of tyranny that inevitably results from government control of economic decision-making through gradually incremental increasing central planning? The abandonment of individualism, classical liberalism, and freedom inevitably leads to socialist or fascist oppression and tyranny and the serfdom of the individual?

Imagine that reality? Like we were dictated from central planners say in Brussels under stealth from Germany and France and say in the past few weeks they without any resistance denied say Greece having a referendum and say appointed 2 like minded technocrats to be leaders of Italy and Greece. Real Twilight Zone script there, eh?....

Try doing the same experiment as the OP article with a sample of people who live in the real economy from working class and middle class backgrounds, Hayek would rout Keynes on points. Simply because he better understood the human condition and human action and how dynamic real markets are and how the discovery principle works between producers and consumers in the real world, without the use of complex mathematical models.

BTW, The GOP claim to be Hayekian, but about 10% of them have probably read him and that's the Ron Paul section. Hayek was not a Conservative.

Anyway best to illustrate this debate through the medium of Hip Hop. Enjoy...

within the austro-libertarian school of thought, Hayek was by far the most moderate and sensible. I believe he refered to himself as a classical liberal and "old whig" on a number of occasions, and he believed ina basic welfare state and a modest amount of regulation provided it was applied equally across the board.

However,i disagree with him about permitting fractional reserve banking. I believe the state should enforce a full reserve requirement amongst competing private, commodity backed currency providers, so i tend to agree with Hazlitt when it comes to monetary policy.