The current GOP ostensibly reveres Hayek, but they disregard much of his work.
For example, he thought that the provision of healthcare was a legitimate
Friedman understood the two fundamental human emotions: fear and desire (or as
those who revile those unafraid of failure, risk and competition term it0
"greed").If anyone would understand motivation, I'd
assume it to be a theatrical director....Rand "marginal"? She occupies
the top two spots on the Modern Library's list of 100 greatest American
novels as judged by the public..Hayek marginal? The
only person who is marginal is Krugman. How can the government take on more
debt and print more money and expect a good outcome? By selling wheelborrows
with which to carry our money to the store?
Excellent "My View," Eric. Yes, Krugman can be a bit pointed in his
critique, but the GOP does deserve to have its nonsensical economic ideas
revealed for what they are.
Here's another aspect that the GOP and, likely, most other people disregard
about Hayek: he considered himself a "social democrat." For example, he
dedicated his Road to Serfdom to "the socialists in all parties." They also disregard that his major work as an economist was something
called Pure Theory of Capitalism. His fame as an economist came from other
works, primarily 1) Monetary Theory and the Trade Cycle and 2) his Prices and
Production. The Road to Serfdom was more of a philosophical work that attracted
popular attention, but was not the basis for his Nobel Prize selection. His
greatest contribution was his trade cycle theory, which he borrowed up from the
great Ludwig von Mises. It was not his original thinking, but because Nobel
committees cannot find it in their Keynesian hearts to bestow the prize on
anyone but another Keynesian, they waited until Hayek established himself as one
of them and no longer as an Austrian economist.Austrian economists
predicted the dot-com bust, the real-estate bust, and they predict that the
prescriptions of Bernanke and Krugman will cause probably the greatest economic
downturn of all-time.
Sey- thank you for educating me further on this matter....insightful indeed,
Reymun,I would suggest that the fact that Ayn Rand is popular as a
novelist in a poll does not suggest that her views on economics should be
considered of value. And since essentially all major economists predicted the
real estate bust does not suggest that the views of Austrian school economists
should be given any credence whatever. They're wrong about Krugman, just
as they've been wrong about every development since the establishment of
So Mr. Samuelson is putting all his eggs in the Krugman basket. Problem is
Krugman is a rabid partisan and one can't be sure his politics aren't
framing his theory. Even so given the fact that the most noted economists
have more often than not been wrong in their prophecies, perhaps even Krugman in
his non-partisan moments, if he has any, would admit to a degree of humility as
to his "solutions". Samuelson also ignores other noted Economists who
don't write columns who disdagree with brother Krugman. I recall in none
of Krugman's pre-crash columns any warnings of an impending sub-prime
crisis. The relatively conservative Economist, edited in London, was warning
about the bubble and the Frank-Dodd policies long before the bubble burst.
Incidentally at the time of the Nobel prize there was much talk that the prize
was as much due to his anti-Bush diatribes as his professional work. The Swedes
loved his politics as much as they may have admired his theories.
To ron holdaway: Paul Krugman is far less partisan than any economist on the
right. He very frequently criticizes President Obama and the Democrats.
Eric,First, if another post appears similar to this, I apologize. I
have waited several hours and my original post has not surfaced so I am writing
again.Second, I agree wholeheartedly that neither Keynes nor Hayek
are the gold standard. They were innovators in their time, but modern economics
provides more nuanced views and better data support.Third, I too am
discouraged with the modern fascination with Austrian economics. Though Hayek
moved forward, the thoughts of the most ardent Austrians have not. Their patron
saint is Von Mises, not Hayek.I differ with you on Krugman. He has
some good insights but is clearly partisan. I don’t think anyone is 100%
on predicting the future (not over the long term). The economy is too complex
and the variables too many. But he did have that great quote about Atlas
Shrugged . . .
re: reymun77 8:58 a.m. Krugman is forgetting one of the basic
tenets of economics... the more common something is; the less valuable it is.
And the GOP VP nominee is Paul (Ayn Rand) Ryan.I loved this: "The point is, ladies and gentleman, that greed -- for lack of a
better word -- is good.Greed is right.Greed works.Greed clarifies, cuts through, and captures the essence of the
evolutionary spirit.Greed, in all of its forms -- greed for life,
for money, for love, knowledge -- has marked the upward surge of mankind.And greed -- you mark my words -- will not only save Teldar Paper, but
that other malfunctioning corporation called the USA.
Thank you very much." ~ The modern GOP is best potrayed as the fictional
character Gordon Gekko, played by Michael Douglas in the movie
Ron Holdaway>So Mr. Samuelsen is putting all his eggs in the Krugman
basket. No, but he's a voice we should listen to. I mentioned several
economists.Samuelson also ignores other noted Economists. I cited
several other economists. >I recall in none of Krugman's
pre-crash columns any warnings of an impending sub-prime crisis.In fact,
he did, repeatedly, loudly and often.>At the time of the Nobel prize
there was much talk that the prize was as much due to his anti-Bush diatribes as
his professional work.On Fox News and the Wall Street Journal editorial
page. In fact, he was honored for his contributions to New Trade Theory and his
work on liquidity traps. Read his citation; nothing there about politics at all.
But yes, I do think it's time for another stimulus, and I do think
that, since the debt is actually not harming our economy at all yet, it's a
problem to be dealt with later.
Twin LightsGood to hear from you again! It's been awhile.I
appreciate your insights. I quite agree, of course, about the Austrian school,
and I imagine you share my dismay over the huge crush so many on the Right have
on Ayn Rand. (If that's not true, I apologize; I don't mean to
misstate your views, Atlas Shrugged quote notwithstanding!) On Krugman, I
just suggest that people read his book. Make up their own minds. It's like
Rachel Maddow's book, Drift. Because it's written by Rachel Maddow, I
suspect a lot people figure it's just the usual partisan nonsense.
It's not. It's a thoughtful, interesting, thought-provoking book.
Same with Krugman. Read End This Depression. You may find it surprising.I should add, by the way, that I did not write the headline for my My View.
The DesNews headline writer did--unnecessarily cutesy, I thought.
Just for fun, since we seem to be recommending outside reading, I recommend that
some of you take the time to read an article by the Austrian economist (yes, a
Ph.D. and all that) Robert P. Murphy called "Charting Fun with Krugman."
You'll get an idea of just how convoluted Paul Krugman can be in his
analysis of economic history. It sheds light on how Krugman denies Fed
mismanagement.Another one you might enjoy is by Mark Thornton,
another Austrian economist. He put together an article called "Krugman Did
Cause the Housing Bubble." Krugman was a huge advocate (and influence) of
the very policies that brought about the housing bubble and its inevitable
collapse.And finally, if you're up for it, there's a book
review by David Gordon of Krugman's book The Hangover Theory. Gordon
relentlessly pokes gaping holes in Krugman's understanding of Austrian
business cycle theory. Apparently, Krugman is one of the leading misinterpreters
of Austrian economics.I'm hoping against hope that maybe the
aspersions cast on Austrian economics can be rectified if people actually read
what they say rather than just believing what their favorite critic says about
them. Just sayin'.
Eric,I think there is much of Hayek that is valuable. Same with
Keynes. But I find neither to be complete by themselves. What I see as more
problematic is the fascination with Von Mises and the very strict Austrian
school. Inevitably this seems to lead to the concept of no central bank and to
bringing back the gold standard.I see this as an out-of-fashion view
that makes a comeback once those that actually remember the old days have
disappeared from the scene. The past can then be romanticized which, in turn,
leads to a desire to revisit those great days when all was good.I
read Krugman's blogs and articles (I have little time for whole books). I
read lots of views. I think it is necessary to compare and contrast.At least your headline was spelled correctly. I have caught several of late
that have contained rookie mistakes.If you have not seen the video,
search for "Fear the Boom and Bust a Hayek vs. Keynes Rap Anthem". It
is reasonably good summary of their positions and a lot of fun to watch. I
suspect you will appreciate it.
SEY,You are my favorite Austrian on these boards.The
"Charting Fun with Krugman" Article ignores the issue that the Fed was
not the Fed we understand until Marriner Eccles and the Great Depression. That
is, to understand the effects of the Fed, you have to look after it was
strengthened under Eccles.The great miss by the Fed in recent times
was under Greenspan who fell victim to the concept that markets always cure
themselves. Keynes would not be pleased . . .As to Krugman or any
other one person causing the housing bubble. No. It was a confluence of actors
all spurred by the same type of ideas that afflicted Greenspan. Also, the
deadly idea that risk can be tamed by technology.Again, I think
there is a lot of Hayek that is worthwhile. It is his more austere brethren
that I find unacceptable.Schön mit dir zu reden
Twin LightsI have seen the Keynes/Hayek rap video! Love it! You're
right, it's very funny, but it also gets the economics right. I
quite share your dismay over the von Mises shut-down-the-Fed,
bring-back-the-gold-standard extremism. It finds political expression, of
course, in the Presidential campaign of Ron Paul, and the views of his son.
Doesn't Rand Paul represent your fine state? Does that give pause? I also rather like Ron Paul, however. You have to admire his courage, at
least. And he's not wrong about everything. Just economics. One
point I make in my play is the similarity between the Austrian school and
Marxism. Marx argued that impersonal forces of history, dialectical materialism
would cause capitalism to implode, and that nothing needed to be done, or even
could be done, to hasten things along. A dictatorship of the proletariat was
the inevitable outcome we could all look forward to. The Austrian school posits
a perfect equilibrium, achieved through non-intervention and careful inaction.
I prefer nations to create their own destinies.
Eric,Yes. We have Rand Paul. I share your (partial) admiration for
his father but less so the son. The opposing candidate was pretty terrible.You wrote a play about economics? Dude, even economists call it the
dismal science. What were you thinking? On the other hand, I would probably be
interested but then, even my family says I am boring . . . I count
myself as a "semi-strong" adherent to the efficient market hypothesis.
I believe markets are powerful, and the only real engine of economic growth in
the long term. But they can have weaknesses where govt. structures are
important (i.e. regulation). Further, that there are some markets that do not
respond well to market forces (at least not in the way we want). Higher
education and hospitals are two examples where market forces rarely (I
won't say never) result in the best available product.So, back
to the dismal arts. What play of yours dares to put the audience into deep
(catatonic?) sleep via economic exposition? You do know that when they say
“write what you know about” they don't mean economics,
right?This is my final post. Good luck to that team in Bloomington
. . .
Your "My View" and the ensuing comments have been and enjoyable and
enlightening read, Eric.Just over 20 years ago, as an undergrad
economics major at the "U", I took a one-time offering upper division
economics course titled "Debt and the Twin Deficits Debate" from
Professor James Rock. Though Professor Rock was a self-proclaimed
"Keynesophile", his course was remarkably balanced and presented
contrasting points of view from several highly-regarded economists.Based on this course, and in addition to the economists that Eric Samuelsen
recommends, I would also recommend studying the ideas and writings of Alan
Blinder, Robert Barro (particularly regarding "Ricardian Equivalence"),
Edward Gramlich, and Robert Heilbroner.I agree that Paul Krugman has
contributed significantly to modern economics; my only real beef with him is
over how he generally disparages John Kenneth Galbraith's economic ideas
(Galbraith is one of my favorite economists).