Editorial Reviews. Review. Keynes Hayek: The Clash That Defined Modern Economics. Nicholas Wapshott. Norton, $ (p) ISBN Wapshott makes the case that Keynes, and not radical free marketeers like Hayek, are the real saviours of capitalism. The final quote, from John Kenneth. Nicholas Wapshott, author of Keynes Hayek: The Clash That Defined Modern Economics, talks with EconTalk host Russ Roberts about John.
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He met his opposite in a little-known Austrian economics professor, Freidrich Hayek, who considered attempts to intervene both pointless and potentially dangerous. Here I suspect that Wapshott didn’t ken the material either. By the way, another job he did, he was the bursar of King’s [King’s College, part of Cambridge], and he invested enormous amounts of money for King’s and made a lot of money for King’s.
There is no doubt that some of Keynes innovations in thinking have now been discredited, yet plenty of his theories are still correct. Friedman, an ardent new dealer in his youth, was an economist who fought with same macro-economic weapons as the Keynesians, but sought to substitute manipulation of monetary policy, through interest rates, for that of fiscal policy, through taxing and spending.
When I interviewed Milton in shortly before he passed away, I was recounting how many of his ideas in Capitalism and Freedom, a book written in I think, how many of them had come into the mainstream, and how at least half full the glass was; and Friedman’s reaction, akin to Hayek’s I think, was: Time Podcast Episode Highlights.
If some things work, fine; if they don’t work, it doesn’t matter. But still pretty far apart. The American economist and businessman who has written this book, whose name escapes me right now–they had made what is essentially a Keynesian argument–that savings can be bad and spending is good.
This book is at once biography, covering the lives of J. Keynes’s conclusion that every pound that a government to create jobs was not just a pound, because as he explained it a number of times: How do we get from the present situation back to advocating authentically conservative policy which is both democratically and economically viable?
This is an unbelievable thing, right? But there is a sense in which Keynes “invents macroeconomics”. He refused, too, to take seriously the general theory’s insistence that the outcome for the economy as a whole, in aggregate, may defy analysis purely in terms of the behaviour of individuals.
Keynes – Hayek by Nicholas Wapshott – review | Books | The Guardian
KevinF Nov 5 at 2: It’s a cheap shot against him that somehow because we are not all enslaved, the book was wrong. I also would have liked to have more of the personalities of the men–my own bias towards intellectual biographies.
This divergence makes the equilibrium theory even more unattainable. For our favorite battle Keynes vs. President Nixon embracing Keynes and the left-wing President Clinton showing a fear of deficits and distrust of governments which would have delighted Hayek.
Ironically, some of the most interesting and obscure arguments between the two camps are to be found in Micro-Economics, although these will not be settled or understood in the public arena of politics. He’s lost to modern graduate economics, I’m afraid. And as he pointed out–the wonderful word that anyone who every heard Hayek in these days–called “fluctuations”, which is what Hayek called it–the fluctuations, the business cycle, was really something that you really could not, however much you might want to, at the top or the bottom of the business cycle, the fact was the business cycle was as if a natural phenomenon.
Actually had read him. Threads collapsed expanded unthreaded. Heavy hitting on both sides, all above the belt. He was not used to being treated in this way. For conservatives concerned over the intellectual vacuity of the Republican Party and Tea Party, this book puts one in complete despair. Summarising the difference of opinion between these two great intellectual behemoths is no easy task, and Wapshott does a marvellous job of framing both sides of the debate in a concise, intelligible language that often eludes economists.
Quarterly Journal of Austrian Economics
Nothing is heard from him about this book, which is a book that is a devastating intellectual challenge to his whole world view. Not a very long book, couldn’t take him very long. Hayek actually supported government-supported universal health care and unemployment insurance! But that turned out to be part of its charm, and also Keynesians will say this, and they did.
To that extent, all macroeconomics today that wapshot used is macroeconomics. Is there somebody alive today–maybe hundreds of people–who took Hayek’s economics classes in Arkansas?
Cambridge is very stratified, like everything else in England. And he said that was the road to serfdom, a road to tyranny, if you kejnes. There might have been other Austrian hayej who were probably more distinguished than Hayek.
Famous letter that Keynes writes. But by then it was probably too late. What happened when Hayek came to England? I should therefore be able to follow everything in a book intended for the general public.
They never got any further than locking horns. Because actually economic activity is about individual choices, and the only thing you can be certain of is the prices are trying to tell you something.
I don’t want to be unfair to Keynes. So I enjoyed the first half of the book covering the era before Keynes’ deathand didn’t lea Very balanced, refusing to take sides until the last paragraph Wapshott gives J. From their first face-to-face encounter to the heated wapsott between their ardent disciples, Nicholas Wapshott here unearths the contemporary relevance of Keynes and Hayek, as present-day arguments over the virtues of the free market and government intervention rage with the same ferocity as keynex did in the wapshtt.
It harnesses the author’s skills as a journalist in a lucid and accessible introduction to Hayek’s work. So he worked out–again, this is probably something you and I would recoil from–he actually tried to work out specifically what that that figure would be. Keynes was making leaps and bounds in challenging the orthodoxy of economics, mainly for the practical reason that Britain was enduring, in the s, vast amounts of unemployment; would continue right until of course the end of the s.
Wapshott’s focus is not so much on economic theory as on its relevance to economic policy-making. Talk about that book and how it indirectly became a counterpoint to Keynes.