How about either the short or the long-run after the 2008 free-market and finance based crises those "rational" individual choices caused? Happy with the unemployment and poverty they caused? Great because you are neither unemployed nor economically suffering right?
People seem to forget that Keynes also advocated for lower spending during inflationary periods. It isn't accurate to depict Keynes as this guy who thought racking up tons and tons of debt through massive government spending all the time was a good thing because he didn't believe in that.
@@GamerGeekThug I agree, but politicans do what politicians do... Seems like he completely ruled out human aspect and abuse of government money printer by politicians in his theories.
I have always found Hayek's predilection for pointing out that "there is nothing new under the sun" as one of his most inspiring and endearing qualities.
00:00 how do you think he [Keynes] will rank in the history of economic theory or thought ? 00:07 - As a man with a great many ideas who knew very little economics 00:11 - ______________ literally, too . 00:12 - he [Keynes] knew nothing but Marshallian economics 00:15 - He [Keynes] was completely unaware of what was going on elsewhere 00:20 -He [Keynes] even knew very little about 19th century economic history. His interests were very largely guided by aesthetic appeal 00:29 - And he hated the 19th century 00:32 - And therefore knew very little about it 00:34 - Even about its scientific literature He [Keynes] was a really great expert on the Elizabethan age 00:40 - I'm absolutely astounded that you say that John Maynard Keynes really did not know the economic literature 00:46 - Very little . Very little 00:50 - Even within the English tradition he [Keynes] did know very little of the great monetary writers of the 19th century 00:59 - he [Keynes] would know nothing about Henry Thornton, Banker 01:02 - He knew a little about Ricardo, of course. The famous things But he [Keynes] could have found any number of antecedents of his inflationary ideas in the 1820's and 1830's 01:16 - And when I told him about it , it was all new to him 01:19 - How did he react ? 01:22 - Was he [Keynes] sheepish? Oh no . Not in the least 01:27 - He [Keynes] was much too self assured And amused? 01:31 - Convinced that what other people could have said about the subject was not frightfully important 01:42 - At the end , well , not in the end , there was a period just after he [Keynes] had written the General Theory where he [Keynes] was so convinced he [Keynes] had re-done the whole science that he [Keynes] was rather contemptuous of anything which had been done before 01:54 - And did he maintain that confidence to the end ? 01:59 - I can't say because I said before we'd almost stopped talking economics 02:04 - great many other subjects 02:06 - his general history of ideas and so on we were interested 02:11 - And you know I don't want you to get the impression that I underestimated him as a brain. He was one of the most intelligent and most original thinkers I have known 02:24 - but economics was just a sideline for him and he had an amazing memory 02:31 - he was extraordinarily widely read But economics was not really his main interest Well his own economics was He was convinced he could recreate the subject 02:42 - and he rather had a contempt for most of the other economists 02:49 - does this tie in with your two Kinds of Minds you wrote in Encounter some years ago? 02:54 - Well, curiously enough, I would say Keynes was rather my type of mind and not the other 03:01 - he is certainly could not have been described as a master of his subject 03:04 - Which describes the other type He was an intuitive thinker with a very wide knowledge in many fields 03:15 - who'd never felt that economics was weighty enough to 03:20 - he just took it for granted that Marshall's textbook contained everything one needs to know about the subject 03:26 - There was a certain arrogance of Cambridge economics about. They thought they were the centre of the world And if you have learned Cambridge economics there is nothing else worth learning 03:37 - I'm interested in your earlier comment about the fact that here is a man of immense intelligence , great imagination , wide learning , and so on 03:48 - And yet was not an economist . And i'm not clear whether you mean he didn't have the kind of mind that excels in economics; just as mathematics say You can find people who are brilliant but given mathematics are just hopeless 04:04 - but do you mean he didn't have the kind of mind that makes for first rate economists 04:08 - Oh he had -- I mean if he had given his whole mind to economics he could have become a master of economics , of the existing body 04:19 - but there were certain parts of economic theory which he had never been interested in 04:28 - he had never thought about the theory of capital 04:31 - he was very shaky even on the theory of international trade 04:36 - he was well informed on contemporary monetary theory but even there he did not know such things as Henry Thornton or Wicksell 04:46 - and of course his great defect was he did not read any foreign language except French 04:50 The whole german literature was inaccessible to him 04:53 - he did , curiously enough , review Mises book on money. but later admitting that, in German, he could only understand what he knew already 05:03 - what he had known before he read the book in English
I wish that people would give Ludwig von Mises the credit he deserves. He's the one that converted Hayek from socialism and he was a believe in true laissez faire. He is perhaps the greatest economist of all time.
A fascinating interview. Hayek and Keynes were friends despite their great disagreements on economic theory. I think Hayek gives a fair account of his friend in this interview. Keynes was extremely intelligent, but dismissive of the contributions of others. Unlike Newton, he refused to stand on the shoulders of giants.
Keynes was wrong: that's the main point, and the libtards and commies loved him because he advocate permissive, irresponsible economics. Look at the mess that the US is in now thanks to Keynesian economics! Obama and Bush!
Let's not forget that Keynes views on social and economic issues were colored by some interesting perspectives. First was his social class (Elitist). Second his friends were largely eugenicists, and he was their mentor. He was Director of the British Eugenicists Society. Perhaps his views entertained the notion just like good buddy Geroge Bernard Shaw, that if you could get rid of that "social trash" you could create those "sunny uplands".
+William Morrison Ehh, actually Keynes was thought a part of Fabian movement and some taint him as bolshevik. It was not such a slur then, in fact having learnt, what the winning countries after the WWI had in stock for the Europe, he was sure that was a sure path to a new world conflict and proclaimed that capital will destroy itself and all that is left for him is to be "buoyantly bolshevik". Nonetheless he was a brilliant economists compared to Hayek. There are a couple of names when it comes to economists who pushed the evolution of economy forwards, Keynes is among them and Hayek does no make the top list. He is just an intellectual lackey of big jewish capitalists, that is all that most of the austrian school is about. With an exemption of Schumpeter who did not fit with the austrian school, but was from Austrian Monarchy and (apart from Hayek) brilliant theorist
Those are ad hominem attacks and have nothing to do with Keynes ideas. Charles Darwin was also a eugenicist but that doesn't invalidate natural selection!
Keynes called Hayek's book Prices and Production "one of the most frightful muddles I have ever read", famously adding: "It is an extraordinary example of how, starting with a mistake, a remorseless logician can end in Bedlam"
I never saw that quote from Keynes, but it's ironic as hell, given that his general theory is built on the moronic postulates that build into the monstrosity we live under today
Keynes was apparently incredibly intelligent. The famous Bertrand Russell, a close friend of Keynes, said that he always felt intellectually inferior to Keynes whenever they discussed ideas.
Keynes was intelligent the only thing he lacked was understanding of human nature. He probably would have never guessed that his theories and ideas would be taken out of context and manipulated by the people. Especially the rich.
Important to note that Hayek is straight up lying when he says that Keynes didn’t know about the history of economics. Keynes had an immense knowledge of the history of economics, wrote many articles on historical economists and even discovered a secret manuscript of David Hume.
@ He was quite knowledgeable about it as can be seen from his review essays on Malthus & Stanley Jevons. In Tract On Monetary Reform, Keynes notes that Purchasing Power Parity theory was already in Ricardo (citing a speech the house of commons and Ricardo’s book protection to agriculture). He also wrote appreciations of Bagehot and others. Even early in Keynes career his obituary of de Molinari was the longest in the English language. Keynes was also one of the world’s leading experts on Ancient Mesopotamian money, which influenced Treatise On Money. He noted that units of account in terms of barley uniformly predates units of silver, which made the convenience story of money seem historically false.
In case anyone thinks Hayek is being mean to Keynes, Joan Robinson (herself a radical left-wing economist later in lafe) claimed that Keynes was criticising Marx without ever taking the time to read him.
+Fred Neecher read him. Thought it was awesome while I was a teenager, but realized it was idealistic and impossible, and once you look at attempts at communes and other socialist attempts you realize it's such a failure.
"but realized it was idealistic and impossible, and once you look at attempts at communes and other socialist attempts you realize it's such a failure" Marx himself recognized that practical attempts at working communes had been failures. He labelled them 'utopian' as opposed to his 'scientific' socialism. What he meant by that was that his socialism would supposedly come about though the working through of the necessary tendencies of capitalism. Which would create the conditions in which socialism could actually work. The supposedly inevitable conditions never materialised however, and socialism remains 'idealistic and impossible'.
Hayek talks about Keynes at greater length in his book "The Fatal Conceit". I think the book is a better but not the landmark book that the "Road to Serfdom" became.
Mike Kelley - I read ‘The Road To Serfdom’ earlier this year, and was absolutely blown away. I loved the accessibility of the Free to Choose visual TV series, but Hayek’s work is just on a whole different level compared to anything from Friedman or The Chicago School. I’ll have to check out the Fatal Conceit now, thanks!
@@christopherarmstrong2710 Consider reading "The Use of Knowledge in Society" - this essay presents an irrefutable argument as to why planned economies will always perform less efficiently than free markets... It boils down to the degree to which transactional decisions are rational - when decisions are made withe insufficient or inaccurate information, they result in inefficiencies...
Matthew Barton - I’ll add it to my list, thanks! Planned Chaos by Von Mises sounds similar. Been out of the fray of economics texts, lately (dense and dry material).
@@christopherarmstrong2710 If you're newer to austrian economics I recommend reading Murray Rothbard, he's the most easily digestible and enjoyable to read
@@joshASM Let's maybe not start with anarcho-capitalism! I think Rothbard and - especially! - Hoppe are probably too crass for someone new to the Austrian school. I got my start with Ludwig von Mises, more precisely his book "Liberalism" which I still regard as a perfect introduction to the "Austrian" thinking. But eventually you would logically have to end up with the advocats of a private law society.
@@pneron2032 Why do you think you Need an Economics degree at all to describe the Economy? After all the neoclassic theory (the dominating theory in Economics) is bullshit anyway.
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - Friedrich August von Hayek.
@@fernandor4617 not even close to accurate... I mean... Keynes has a legacy of saving capitalism from itself after it's great crise. He did more than simply nagging about how states intervene on concocted magical forces that balance everything.
“He was completely unaware of what was going on elsewhere. He even knew very little about 19th-century economics. His interests were largely guided by aesthetic appeal. And he hated the 19th century and therefore knew very little about it...”
Keynes seems like another example of those academics described by Thomas Sowell, with big egos who wander outside their main field of study with disastrous results.
There was nothing disastrous. It produced the golden age of capitalism. Far more successful by any measure than Hayek’s theories have managed in the real world, and it’s the era the working class of today always long for.
TBF there are plenty of economists who also have disastrous results. The problem is the government is so big they pay economists who say what they have to in order to get another paycheck. They end up all over the media and become more well known. If the government offered me $500k a year or more if I work for the FED to pretend minimum wage and rent control were good and fair ideas I probably would. Now you cant get a university position like Sowell and Friedman had if you arent pro big government. So you cant make a decent living. I love economics and would happily do it with my life. But I would never get hired by the central bank or by a uni. So I went into a different field.
Keynes was certainly brilliant. And yet, he failed to recognize the continued and growing power of landed interests in the modern, industrializing economies. Some of his contemporaries (such as Scott Nearing, John R. Commons and Harry Gunnison Brown in the United States) found sound analysis in Henry George's application of David Ricardo's "law of rent" to resource-laden and urban land as well as to agricultural lands. Without any deep analysis or explanation, Keynes simply asserted that rent was insignificant in modern economies. Did he not have access to statistics showing the rapid increase in location rental values in the worlds' cities. Land at the center of any city or town was valued by the square foot. The simple process of market capitalization occurred to convert annual rental values to a selling price for land. And, as George observed, this claim on wealth occurred with any expenditure of labor or capital goods on the part of the landowner/rentier. This blind spot by Keynes meant that he failed to call for changes in tax policy that would largely prevent credit-fueled and speculation driven property market cycles of boom and bust.
Keynes whole General Theory is misguided by the circumstances of his time. The purpose of a working economy is to satisfy material human needs with the least amount of resources, since these are scarce and human needs in principle indefinite. Labor is one of these (scarce) resources. Keynes perceived employment as the purpose of a working economy / labor as an abundant resource and his whole theory is guided at fulfilling this purpose even though the point in economics is to use resources effectively and efficiently. Use the resource labor just because, is the exact opposite - wastage. This may sound cold and harsh but in my opinion its true. But if you have realized this truth and how economies work you can start to think of ways and means to balance economic results, that arent exactly desirable, like the lack of use of a very expensive resource labor / unemployment. Pump more liquidity into economies / temporarily increase the velocity of money if economies try to adjust themselves (likely to the consequences of previous liquidity pumping) is no solution, it just transfers the burst into the future.
its funny my political compass came out nearly exactly where yours is and my thoughts on this are mirrored to that of your own. That thing is more accurate than i thought.
Ill-informed reply. Keynes and Smith both said that consumption is the ultimate goal of production. Thus, economics is the study of how to optimise consumption. Often this means maximise, although it should really be more qualitative and consider distribution more. To be fair, Keynes mentions the marginal propensity to consume and how it decreases with income. This is why inequality is bad. It generates too much saving (to the extent where banks cannot loan the savings to profitable enterprise. Speculative bubbles and more risk taking can happen). Or, less consumption (more saving) means firms fire people cos less people are buying products (revenues fall, less incentive to invest). Since there is no limit to human desire, the optimal economy is one where ALL resources (every piece of land, every person, all money) is put to use (in a sustainable and most effective way) to fulfil as many of our infinite needs and desires as is possible and make us all as free as possible. This is why economic wealth or utility should be interpreted as things like freedom, happiness, leisure time, life expectancy. Innovations create wealth because they make things possible, easier or more resource-efficient. (Washing machine frees up time to spend how you like. Gives you freedom. Money buys freedom. Employment gives people a chance to increase freedom. We want to give as many people as possible, an acceptable amount of freedom). Anyway, Keynes says that unemployment is irrational since it is a waste of resources (people willing and able to work = unemployed. People who could be retrained and employed in a way that helps us fulfil our infinite desires) The ideal economic system doesn’t waste resources that are able to work. The only way your idea would be correct would be if the unemployed are unable, perhaps lack the skills, to work and Keynes is simply suggesting they be paid to do ANYTHING. He did write that famous line about paying people to dig a hole and refill it. That line did more damage to the interpretation of his work than he could ever have imagined. In the case when people are being overpaid given the quality (value) of their output (productivity), government should provide physical and mental health care and welfare benefits to ensure everyone has shelter and food WHILST supporting citizens through education/training. So that these citizens (resources) can be put to productive use (so long as they wish to be) and we can maximise the fulfilment of our desires (for things and experiences that can be morally exchanged for money). The minimum wage is a moral, not an economic, policy. Yes It stops the market from functioning mathematically ‘perfectly’, although from a moral perspective it is far from ‘perfect’ that someone could be paid a wage that cannot sustain a basic life. This would require more taxes and employment support from the state.
I put the link in the discription bar, under "Source" just click it. Or if you have problems with that or type hayek interviews into google it will be the first result. You will know when you're there as they are hosted by Universidad Francisco Marroquín (UFM) website.
"I simply do not trust them ANY of them to describe the world we live in by way of econometrics" You sound very much like Hayek in his nobel prize lecture The Pretence of Knowledge.
Funny now in 2024 I could say the same thing about all the modern economic “experts” who wouldn’t have a clue what the Austrian school was if mentioned to them
I posted this on another Hayek interview...had U.S. political leaders bought into Hayek instead of Keynes, our country would not be facing national bankruptcy.
In Keynes last letter he lamented over the fact that if he HAD found any purity in his theories it has been lost on the welfare economists who had taken his ideas and used them to promote deficit spending on social issues.
That seems to be Keynes biggest failing, he didn't understand the political implications. Politicians only listen to the parts of the proposal that they want to hear.
I can't help but think Keynes advantage was precisely that he didn't concern himself with dead ends in economic literature, and that that was the only avenue that Hayek could really compete with him.
I think Keynes views can be perceived fairly easily. He was a Fabian Socialist, though anti-communist. He was more favorable of Fascist style Statism in a controlled economy, "corporatism" (not NAZIS though he was the Director of the British Eugenicists Society). He was vindicated in his mind, by FDR's attempt at complete control of the Depression economy, and that centralized control met with his "politic". Unfortunately, he was the "sexy" economist because he was a renegade, and seemingly preached the easy way out of economic problems. But, Keynesian theory could be said to be behind the housing bubble, since two key elements were present he would approve of. Low FED interest rates, and FEDERAL LAW in the CRA Revision Acts of 1993, '95, '99 under Clinton. The laws required Banks execute Capital outlay at original 20%, then 50%, and then we had NINJA Loans in '99. That was because Congressmen who, in cooperation wrote the laws, said that if you asked someone who was a minority to provide evidence of income, or a Social Security Number, it was racism! I will never forget Barney Frank's speech on this on C-Span. Then in 2002 Andrew Cuomo was on C-Span saying 5 banks were at risk of failure, and suggested two terms I had never heard before; "credit-swaps" and "derivatives" as a solution to diversify the risk through the entire banking system. The meeting was with the CBC and ACORN leaders where he said this, and of course the Banks greedily complied and they all pulled us down. Keynes would have approved, and denied that Government had any fault in the failure of government intervention. But does common sense provide that Bank's would normally engage in risky loans?.
***** First he was a self professed Fabian Socialist along with his good buddy George Bernard Shaw. Shaw loved Fascists and Communists. Did Keynes accept Communism? No, he completely rejected it for self-serving interests probably are much as any moral reason since he was an ultimate materialist. I think you have a "NAZI" perverted leftist notion of Fascism. As Mussolini said in 1922 when asked at his first press conference, what is your economic plan. He said, "Corporatism", later defining it as "The marriage of government and business. What I don't seize I will intimidate. And not one Italian business is entitled to one Lira of profit that does not benefit the State." That sir was the definition of Fascism, not some spin-off of the Khrushchev -Stalin claims of 1936-37. Mussolini read Georges E. Sorel's, "Reflections on Violence" - 1908, in the year of 1914 and finished his transition from Communist Party President ending in 1915 to Fascist in 1919. Why? Because as he wrote to Lenin in the fall of 1919, the whole Fascist Theory was based on one line, "A nation deeply entrenched in private property will never give up that property to a bottom up proletariat revolution. It must be seized from the top down!" That sir was Fascism, not some perversion of it by desperate war monger/racists. It should also be noted that Keynes believed whole-heartedly in Shaw's agenda of mass genocide, being the Director of the British Eugenicists Society and mentor. "Middle of the road"? Give me a break! Adam Smith didn't do anything to harm the world. Marx promoted mass murder of not only his fellow Jews, but in 1850, all Slavic peoples. His view of government stimulus was politically serving and beyond common sense. Look at Japan today after its fourth Keynesian stimulus last year of $1.8 trillion. The Democrats say $867 billion wasn't enough. Well considering Japan's population, that is a whopping amount. Did it or will it work! Not a chance. Japan has just increased its troubles. However, unlike President Obama, he did not believe in debt spending. I will give you that! I don't deny a mutual admiration club between FDR and Keynes. FDR believed in 100% government control. Remember the "Blue Eagle" Program? I imagine you will not tell me Fascism was "right-wing"? Lastly, I agree completely on the deregulation except I doubt it had that much effect. The CRA Revision Acts of '93 '95, '99 and the steroid pumping of Fannie and Feddie did more than anything else. Credit Swaps and Derivatives were suggested by Andrew Cuomo in 2002 while Director of HUD to save 5 major banks on WallStreet because they were "too big to fail!" Blame the Democratic Congress. 17 bills submitted to reign in Fannie and Freddie who bought $5.5 trillion in sub-primes. 13 by Republican House, 2 by Republican Senate, and 2 by George Bush in 2002, 2003. All blocked in the Senate by Democrats, though passed in the House in 2006.
***** I put absolutely no stock in Politico or Freedom House. Mussolini told us what Fascism was. Sorel, the most radical communist in history coalesced a cabal of communists input during the 1875-1895 Communist Anti-Rationalist Movement into his book, Reflections on Violence. Not one contributor was a Conservative, or a classical liberal. Fascism was created by Communists, for Communists, because of the failures of Communism. 100% Statist control is dictatorship. Communism was compromised for the very reason I said before. Sorel understood that a nation deeply entrenched in private property would never give up that property to a bottom up proletariat revolution. Mussolini made Sorel famous in Italy, much more than in France, because of his championing of Sorel. Mussolini was the President of the Communist Swiss Mine Workers Union at age 17. He and his father were life long communists. Why the change Brian? He was the editor of 4 Communist News papers. Why the change Brian? The first person in history to claim that Fascism was "right-wing" was Nikita Khrushchev in 1936, when he called the Mensheviks, "radical right-wing Fascists!" Stalin followed in 1937 calling the POUM, the Marxist coalition (Mensheviks) that that unwitting George Orwell found himself fighting with, "right-wing Fascists!" He left off the "radical". How do I know. I still have family in Melitopol, Zaporozhye Oblast, Ukraine. I lived in the Soviet Union. I spent 1/2 my life in the Soviet Union. And I know these men. But I should defer to your convenient and contrived "modern" liberal view instead of listening to the men themselves? I have read Mussolini and Lenin's letters, released after Glasnost. On 19 March 1919 Lenin named Mussolini the rising star of communism. Later that fall Mussolini wrote to Lenin saying he was going a "Third Way". Lenin was furious. They did not write again until 1922, two years before Lenin died. Then they became friendly because Lenin saw what Mussolini was doing in Italy. I read these letters, but of course they are in Russian, and translated from Italian into Russian. You conveniently distort Fascism in the US. Who said, "Not one citizen will be allowed to make more than 2500 Marks, or be allowed to live off of their investments? Sound right-wing to you? How about this one? “We are socialists, we are enemies of today’s capitalistic economic system for the exploitation of the economically weak, with its unfair salaries, with its unseemly evaluation of a human being according to wealth and property instead of responsibility and performance, and we are all determined to destroy this system under all conditions.” - Adolf Hitler said both. Have you ever heard of I. G. Farben? Why was Hitler harassing them for almost 2 years? He harassed all corporations, especially Jewish owned. By the way, Woodrow Wilson said that Georges Eugene Sorel was his favorite Communist Theorist after reading his book sometime after 1908. I do not have time for all these issues, but FDR prolonged the depression, and only WWII saved the US economy. Europe recovered in 3 years. Show me the improvement from 1930-1940? And evidently you have not been reading the news these last two days. Japan is not what you think!
+Brian Lucas Quotes by Keynes: "Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone." "By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens." "The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods." He sure sounds like a flaming Capitalist! My guess is Tea Party.
Quasimoto44 Keynes was critical of capitalism. How is that Tea Party? Tea Party believes in Laissez-faire, limited government, and the free market. Keynes said we need government to step in and save the economy. Hoover and Roosevelt's Government interference caused the elongation of the great depression and following recession. In contrast Calvin Coolidge cut the top rate to 25%, eliminating all income taxation for some two million people-and revenue went up not down! He also cut federal spending by 50%. So instead of budget deficits, America ran surpluses, American debt was reduced by 25%, and American credit was the most sought after in the world. And by 1923, unemployment had plummeted to 2.4%.
pkswilly I think there is a disconnect. I don't think Keynes was at all Conservative. He was a Fabian Socialist, and Director of the British Eugenicists Society. He was best buddies and in a sense, mentor to George Bernard Shaw, the inventor of the gas chambers. No, you can't equate him with the Tea Party. You can me, because I am a member. Keynes couldn't get in the door. And I absolutely agree with everything you wrote here! Unfortunately fact makes no difference to leftist ideology. History is not a teacher! It simply needs a new administrator to fail again, circa President Obama. How has Keynes worked out for Japan since 1990? If you adhere to Empirical Evidence, you are a Neanderthal according to the left. But the economic view is part of the "Humanist" view that "God is dead! Mankind can only be saved by the superior experience and intellect of the Elite Class, not some pagan religion!" They believed like Marx and Engels, and Marx literary mentor, Jean Jacques Rousseau, that just trimming the "social trash" from the population would allow their humanist, economic utopia.
+The Polemic I doubt Hayek could have been more eloquent in describing your feelings for him. I've read many of Hayek's books as well as Milton Friedman, I can share your exuberence. There is a lot of excellent videos here, one of the best is Friedman and Donahue exchange. I have a lot of respect for Phil only because he asked some very good questions to Milton and that he listened as he was being schooled. Milton had a way with words and saying things that didn't offend but clearly made his point while making the other side look rather foolish. Read The Commanding Heights by Daniel Yergin. Excellent book on the story of worldwide economics. With Churchill being deposed as the prime minister of England, Clement Attlee came to power. Keynes was at the London School of Economics and was friends with Attlee and thus Attlee chose Keynes and Hayek's ideas against central government control was ignored.
Keynes is not to blame for the state of the economy. Economics is governed by rules, the people who run the economy have only one rule, stay in control. They do not obey rules, they make the rules. This is why Economic theory does not model the role of central banks and the banking system in general with any rigour. This enables people to major in economics and understand nothing about how the real world actually works. Lots of math and models and theories, but when 2008 came it was a surprise. The reason was that the instability was engineered through the banking system, the economist's blind spot. Economics is not a science, it is a hobby. As long as banks can transfer wealth by manipulating interest rates or creating currency wealth flows will not obey any economic theory.
Alex B. If I define economy as efficient management of the worlds resources and the interaction of the population with the distribution and consumption of those resources, a successful economic model would be a sustainable version of this that objectively meets the human needs of the population. I would define the market itself as a failure, all you really need to do is look at the world around us. However I could generalise the problem of market economics as being based on some fundamentally questionable assumptions of human nature: Motivation, competition, and greed. I would reccomend Dr James gilligan and his studies of human behaviour along with Dr Robert Sapolsky and his work with genetics. I would like to know what you think. Human nature is a loaded term that displaces causality to something out of our control. I think it would benefit our economic train of thought to understand that a substantial amount of human behaviour is circumstantial and heavily influenced by environmental coercion. To summarise, the assumptions of human nature in market ideology are actually behavioural symptoms of market dynamics in and of itself. Market psychology is inherently coercive, competitive and selfl-interested, inequality is inevitable. This is certainly not good for humanity and I would like to point out Johan Galtung's theory of structural violence.
Adam Crossley "I could generalise the problem of market economics as being based on some fundamentally questionable assumptions of human nature: Motivation, competition, and greed." Of course, you could NOT "generalise the problem of market economics" based on the above, as FREE market economics is based on cooperation. Of course, human nature does indeed contain motivation, competition, and greed, but those do NOT form the basis of voluntary transactions. Peaceful cooperation does. At least you got the definition of market failure correct, though. The problem that many have is they think that other institutions besides free markets can do better, when the entirety of human economic history says otherwise. Inefficient allocation of resources is almost the definition of government action as it DEPENDS on coercive actions forcing others to do things they don't want to do. If you cannot convince people to do something, it is likely not in their best interest, and the forceful coercion of people into those actions is by definition inefficient. "Market psychology is inherently coercive" Of course, this is absolutely false, as NO ONE in a free market can coerce anyone to do anything. Persuasion and cooperation towards common goals are the basis of free markets. It is government action that is based upon coercion.
Alex B. This is quite a typical response from anarcho-captilism. The problem with this is the failure to recognise the coercion. A free market you say is based on cooperation and voluntary transaction, therefore by definition it is in opposition to coercion. What I would like to point out first is that peaceful cooperation would only come to fruition in an environment that structurally promotes that ideal. Free market economics does not reinforce cooperation because it is structurally coercive. To address this specific failure to recognise the coercion comes from a truncated point of view of what coercion means and its source. When I say it is structural, it is the market system itself that is the source of coercion. The coercion is the necessity to engage in the market outright, do you comprehend? This is coercion because it is not a choice. Although it is not an explicit physical coercion, it is a systematic one. It is a futile endeavour to pedal such a false dichotomy as free-markets and controlled markets because the market itself is structurally incapable of being optimal with respect to my earlier definition of economy. Peter Joseph tries to break down this cognitive pathological tendency in free-market capitalist ideology in his debate with Stefan Molyneux, to no avail as Stefan’s capacity for critical thought is limited by this duality coupled with his personal investment in his beliefs of anarcho-capitalism. We are technically capable of feeding and housing the world’s population without discrimination, and this is a quantifiable fact. We also have more than enough resources to supply the world’s energy needs for thousands and thousands of years. Relative abundance is fact. We need to orient our economy towards scientific principles and change our value systems.
@@jgmediting7770 Hayekian theory is the economic orthodoxy😐 Really man? New-Keynesian economics is by far the second most prevelant school of thought in the whole field of economics behind neo-classical economics
@@WielkaPolska-o9t we’ve had a neoliberal economic system for the past 40 years. With regards neoclassical school, that is not necessarily a free market school. But you only ever hear from the free market wing of the school, because that’s who gets platformed and the other wing cancelled. Economics of the neoclassical school has actually come up with good ideas and research that destroy the free market wing. Dating back many years. Hayek and friedman is the orthodoxy for the past 40 years, yes. The gods of the right wing. And it’s utterly failed, like it’s always failed. Unless you’re a certain kind of capitalist. I mean, you are aware of the 3 economic systems of the past 200 years in America and Britain?
No (and your comment is very close to getting the banhammer for baseless slander). Hayek was in Britain in Cambridge during WW2, writing the (Nazi unfriendly) Road to Serfdom & often having dinner with John Maynard Keynes. Hayek moved to Britain in the 1930's and abandoned use of his title voluntarily on becoming a British citizen. No one would have stopped him using 'von' if he wanted to but he chose to be known as FA Hayek.
Keynes vs Hayek boils down to theory vs reality. Keynes approach of powerful central planning is more likely to result in power hungry despots gaining control and developing a world full of corruption. Hayek’s theories lend towards organic growth and decentralized power, much less vulnerable to becoming corrupted.
"The Nazis weren't socialists" It is clear that anyone who makes that argument has not read The Road to Serfdom. It is the definitions which catch the unwary out. "A lot of people talk about my book very few have actually read it" Friedrich Hayek "Fascism is a capitalist response to socialism" Is a self serving Marxist canard spewed by people who don't want to study the world in its full complexity.
Malthus0 You can use socialist term for nazis, even you can see seahorse as a real horse, snowbird as a bird made of snow, that's okay for me. But you can't equalize marxists and nazis. Equalizing the Marxists and nazis is oversimplification and falsification of the facts and history.
@@tusk9901 Well yes, equalizing them entirely is wrong - their names are different for a reason. But knowing the history of both ideologies one cannot deny they are deeply related. They ended up enemies as over time, farther away from their common conception, they heavily diverged. But nevertheless, their roots are both in Marx. As marxists developed marxian theory deeper, the french syndicalist Georges Sorel eventually slightly diverged, and claimed the workers' revolution could never be achieved so long as democracy rules (he viewed democracy as keeping the workers barely satisfied in the short term with many inconsequential perks so they do not revolt). Heavily inspired by Sorel, Mussolini developed his doctrine of fascism, where he covered socialism from a nationalist perspective - proletarian nations vs. bourgeois nations. Nazis developed further into racial territory. Point being - they are connected by their roots, and their fundamentals. Polylogism, collectivism, totalitarianism (not necessarily dictatorial, but necessarily totalizing politicization of life), opposition to liberalism and capitalism. Calling nazis socialists is not calling seahorses horses. It's more like calling horses equines. Their socialism is based on very different characteristics (economic class and relationship to the means of production vs. race and a wide idea of nationality and ethnicity), but it is still socialism all the same. A donkey is different to a horse, but they are both equines. A porcupine, however, is not a subspecies of equine; that's capitalism.
Yeah, Keynes was a man of many interests. He was a government worker and administrator and the #2 man for the British at the Treaty of Versailles conference, a popular author, the editor of an academic journal, an investor, an investor for an endowment for King's college and for some insurance companies, a lecturing professor at Cambridge, an art lover and art sponsor, a life-long student of probability, philosophy, poetry, etc. Bertrand Russell knew him since Keynes was a teenager and said "he worked himself to death."
@@spencerhopkinson9874 He was the greatest Economist who ever lived and he was correct in almost all respects. He demolished the Austrian School. The three worst Economists? Mises and Hayek and Rothbard....
@@spencerhopkinson9874 Hayek wasn't a proponent of Freedom and he was never an intellectual. He was a backward ignoramus with an anachronistic 19th Century view of human nature. He was a Social Darwinist...and all of those guys are idiots. Sounds like your one of them. You need to look up the term statist "Einstein." Keynes was not a statist and neither am I. There are no Utopias in Economics or politics. Keynes, brilliantly, understood that any socioeconomic system had to be an admixture of both to curb the shortcomings and excesses of both. You need to read more...Keynes won. Your ilk just can't handle the truth of it...
Math is the wrong note to strike with Keynes regarding his blind spot. Keynes was a math major at Cambridge and an expert on statistics, especially. He was an expert on probability too and wrote his fellowship dissertation on it. Keynes was focused on philosophy, math, stock markets, commodities futures, running endowments for life insurance companies, teaching, high society, ballet, etc. He was the kind of person to score 800 on both math and verbal sections of the SAT.
He was pretty good at math but by Cambridge standards he wasn't elite, his mathematics tutor called him "competent" at mathematics but said " he had no specific genius for mathematics ". This is born out by the fact that he finished 12th in the Tripos, which is good for a normal person but not great by the standards at Cambridge. When he took the civil service exam he finished 2nd overall out of the 10 hired that year, but his two worst section scores were in mathematics and economics, which prevented him from getting first place and the position he wanted at the Treasury. However this is beside the point, Hayek was talking about Keynes' lack of understanding of economics, which he didn't specialize in. Hayek did say he could have been great, but that he didn't devote the time necessary to master the subject.
aligborat Apart from what the Tripos and civil service exam tested, his specialty in math was more in the area of statistics and probability, anyway. As you know, math is a vast field with many sub-specialties - topology, set theory, etc. Keynes toyed with the idea of teaching statistics as a fall back job after graduation, and, of course, wrote his dissertation on probability, on which I think most would say he was beyond merely "competent."
Dexter Haven His thesis was initially rejected by a committee of two math professors in 1908, after conferring with the two examiners ( One of whom was Whitehead ) and Russell he significantly reworked the thesis and submitted a new version in 1909, and the new version was accepted and then he was elected a Fellow, this thesis then became the basis for his book on probability. He apparently tried hard in the Mathematical Tripos, but he finished 12th, very good for a normal person, but not exactly sparkling for Cambridge or Oxford. The point was that Keynes often didn't think he needed to work as hard as others, but he was often wrong, Hayek said that wasn't aware of much economics literature outside of Britain, that was the main point anyway.
aligborat OK, very interesting. But I think one key factor even more than "thinking" he didn't have to work so hard was how he styled himself a polymath and spread himself so thin - with the Moral Sciences Club, as editor of the Journal of Economics, as a professor, writer, commodities trader, investor for insurance companies and colleges, government work, patron of the Opera, Bloomsbury Society, etc. I would have liked to have seen his monthly calendar! Ever think he and Russell were part of the final wave of men with the conceit to think they could know it all? And Russell's idol as a kid was his godfather John Stewart Mill, the last official Renaissance man. But the sciences were expanding fast, outpacing Russell and Keynes, making their polymathic efforts futile, and revealing how shallow their understanding was in their core areas. Russell's protege Wittgenstein did far more trenchant work in philosophy than he after WW1, and Russell and Whitehead's PM was proven wrongheaded ab initio by Godel later, etc. And Keynes made naive assumptions about politicians, and what their self-interest would do to entrench deficit spending in good times and how they would remain beholden to vested union interests, always favoring short term targeted stimulus for votes at the expense of the general interest and long term economic health, and so on, which has gotten us in our current fix. The US's Founding Fathers were right to put politicians in a strait-jacket as much as possible, I think. They knew well the abuses of powerful politicians, who break things and then demand a power increase to fix them...
Unfortunately you miss the cornerstone of Austrian school of economics. Please read Friedrich August von Hayek's nobel prize lecture "The Pretence of Knowledge". Also there are many economic writings that are written in plain english. Read "Economics in One Lesson" by Henry Hazlitt. This book is free on the internet. Google it! :)
It is really sad to observe the most think of these two gentlemen almost as prophets, as though they were dealing with religeon. My friends, we are supposed to produce science and knowledge. There is no Keyner vs Hayek. Being caught in this artificial debate limits your ability to see beyond and to push economics and social science forward. Science is constructed upon the cadavers of previous great thinkers.
Nonsense. You merely ply one definition of science so to suit your nonsense. Definition of science: *a systematically organised body of knowledge on a particular subject.* It is utterly true that any attempt to use science methodology of, say, physics and apply it to economics will end in utter failure - hence, the failure of "econometrics" - believing human beings can be condensed into a variable. But economic science, as a "systematically organised body of knowledge" utilises root axioms to build its cause/consequences, the primary root axiom being: "Man must act to live"
Whereas I agree with most of your above posts, I challenge that the definition of "science" I apply is "vague". And yes, most of what you present are "Sciences". Geometry is not. It is branch of mathematics, a tool used by science. Architecture is not. It is engineering, the application of mathematics and science. It takes the lessons learned from science and applies it. History is not a science, since it does not require systemic organisation, it is an recounting of a perception of "facts". Perhaps this definition is more complete: *Science is a body of empirical, theoretical, and practical knowledge about the natural world*
Westerners are too fortunate to understand the consequences of government-led intervention. If they merely talk about it but are not willing to live in such a government-led country to experience corruption and bureaucracy, they are not practicing their theories. Keynesianism or neoclassical economics pairs well with authoritarian regimes, but in Western societies, the impact of government intervention under Keynesianism is diluted across various sectors by politicians, thus minimizing harm. Unlike in authoritarian regimes, they don't follow one path to the bitter end. Why can't Westerners realize the preciousness of this hard-won freedom? So many people envy you!😷
0:12 "He knew nothing about Marshallian economics." 3:21 "He took it for granted that Marshall's textbook contained everything one needed to know about the subject." I'm a little confused. The latter statement implies Keynes was familiar with Marshallian economics.
Many comments here are quite humorous showing a pure left wing political bias in favour of the big government and bigger government spending Keynesian philosophy. I am surprised that Hayek speaks so negatively about Keynes’ knowledge of economics though. I am just about to start reading an old book about the clash between Hayek and Keynes, should be an interesting read. Like all things political these days, the Left is not right and the Right is not wrong, just differences of opinion which unfortunately can no longer be discussed in public, at least not calmly and maturely.
I thought (and I may be wrong) that England's ventures in India and elsewhere were financial losers, and the cost of administering their empire outpaced whatever returns the crown could capture. It's never been clear to me that imperialism was ever very lucrative for the nations that engaged in it, and I've always thought it had more impact on 19th century politics rather than economics.
Keynes was a great economist and a great man. The battle between Keynes and his camp and the Hayekians was won by Keynes by technical K.O. Hayek was aware of that. His last theoretical book acknowledged that half-heartedly and by a genius move he turned to economic philosophy, a field in which the differences between Keynes and Hayek were marginal. Later in the century Keynesianism got vulgarized and misused.
"The basic Keynesian economic idea increased government spending and lower interest rates." Government spending and tax cuts. Keynes preferred fiscal to monetary measures. Anyway, that was a specific policy recommendation to respond to the great depression. He also recommended raising taxes and cutting spending after the crisis was over. Keynes never said that the government should just spend and spend and spend as a general principle.
A survival of the fittest, justification for inequality has nothing to do with Hayek, and I doubt the other figures you mentioned ether unless you can give a source. Hayek (like Adam Smith) thinks that success in the market is primarily down to luck, rather then genetic endowment. Hayek does have a theory of the selection of cultural groups. But that is about as far as it can be from 'social Darwinism' with its selection of individuals.
Economics is really weird to try and study because no one agrees about anything. I feel like people tend to sympathize more with economic theories that reflect their own political predispositions. I think a fair assessment of Keynes' ideas is that they could be used to create models that have a lot of validity to them. However due to the nature of models Keynes' ideas are incomplete and other options could be devised to create similar or better effects on an economy. What I can say with certainty is that his ideas have been used to great effect by institutions like reserve banks to prevent or lessen the effect of economic recessions and the like. Also please put a comma after the word "brilliant" in the description.
+dahalofreeek You are absolutely correct. That's because the majority of people on this planet are retarded, and look to politics instead of economic reasoning to solve their problems. Politics is a function of retarded population.
I just had a thought about economics. At the end of the day it is the study to further the filed of the "finding the actual most perfect, maximizing happiness thing(s) to do." Maybe this should be more like the core of their political opinions and what they spend time thinking about and discussing.
At the end of the day economics runs the world. You can work with it or against it, so if you want to work against it, let me introduce you to politics.
Sounds like you do not understand spontaneous order. People are going to do what they want or feel they need to do to survive regardless of government policy. In the Soviet Union, people took to trading on the Black Market to get things, the government systems could not furnish. If you introduce a new tax, not all people are going to just pay it and give the government the revenue it expects. People will adjust themselves to avoid paying the tax or minimize the amount they have to pay. Markets may not answer what should be, but they will reflect what people want.
Ok smarty -- how does a society get out of a depression? By conjuring magic spells? Reading entrails of animals? Patience? Adam smith, ricardo, and the rest of his predecessors did not even consider depressions. Hayek is just an ideologue. Heck, Marx was a better economist and Marx was just a philosopher of history.
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery. Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose. John Maynard Keynes (1919)
+DoMe Quote mining, pls, read the full paragraph, if not the whole chapter where this is taken from, and stop taking it out of context. Keynes was much more worried about the social instability that bad economic conditions will cause than Hayek or any of his spawn... Also, pls, point to a single full blow neoliberal reform that was done in a democratic fashion, anywhere in the world. I am genuinely interested...
liberal and democrat are oxymorons....you can't be liberal and promote rise taxes and increase the size of the government to control every aspect of the citizen's life.
Hmmmm I gotta get the text out where in letters Hayak agreed with Keynes fundamentals but differs in the prescription for recovery.Here "Oh that Keynes...."
Keynes's insights were never accepted by mainstream economics. Instead they were substituted by the so called "Neo-Classical Synthesis": Hicks, Hansen, Viner, Samuleson, Krugman, etc, which contended that Keynes's ideas had only to do with restoring an economy after a depression, the rest was compatible with free market laissez faire. You'll want to read Keynes's reply to Jacob Viner in 1937 "The General Theory of Employment." Or read Dudley Dillard's essay "Keynes and the Institutionalist's." Keynes did for economics what Darwin did for biology: he applied the methodology of science to the field whereas before it was only dogma and doctrine. Which is where he differs primarily with austrians who see economics as an "extreme a priorism"- Rothbard. The Keynesian model is one that sees the world as a capitalistic, profit-motivated one with complex financial institutions and debt structures to finance capital assets. Not the barter paradigm of Leon Walras- the basis of the classical outlook. He sees money as the essence and aim of the system and not a mere convenience as it is in classical economics- check out Wesley C Mitchell's 1916 essay "The role of money in economic theory" where he points out how previous economists took a very unrealistic approach by proposing that was money unimportant. He realizes that under capitalism production is for profit, not for consumption or utility and thus capital theorists and marginal utilitarians are made irrelevant in regards to our current economy. And he understands the importance of institutions in our economy (a fact which is altogether absent from classical economics where only individuals exist) especially the institution of banking and how they and not the government or the central bank are the creators of money- thus making the economy hostage to their state of mind. watch?v=JBZWw1DG8zU (Ben Dyson explaining money creation under fractional reserve banking) watch?v=J4Wsu_svOAc (Lord Adair Turner. You'll all profit to watch this!)
The problem for Hayek is that while he may have known of the 19th Century thinkers in economics, he didn't (apparently) know of the data of the 20th and 21st centuries on things, like, US M2 supply and consumer price inflation, and how there's almost no data correlating the two let alone establishing causality. If economics wants to be a serious science, it needs to be measurable and to be tested. Neither of these gentlemen were doing that, not with the rigor required. I'm not sure why people argue about Hayek and Keynes as if it applies to something like US monetary policy today. I'm not even sure it'll apply to Argentina today.
Oops, I forgot a comma. Does 'the social elite' need to be plural as well in the same context? What about upper class? I am not making an argument one way or the other, I am merely curious if you feel this extends to similar terms in the same context. It is a sentence. Just not a complete sentence. Much like this one and the one preceding it. These are grammatically erroneous fragmented or dependent sentences, called such as they rely on what proceeds or follows them to be complete thoughts.
Has there been any practical application of any of Hayek's economic theories because it seems the comment section is people flinging bananas at each other and no one giving valuable information on why Hayek works and Keynes does not. I only minored in Econ and from what I know, no such thing as a flawless economic theory. All economic theories have their flaws because at the forefront of it all is human behavior.
Making demand depends on long term, e.g. - panic buying vs products still available but now in excess due to demand a few months later (e.g. - 2020 toliet paper value).
"RUclips is not one speech community like above examples so you WILL have to define your terms." Of course. Which is why I did it. And he agreed that the definition I provided was sound. And then he proceeded to argue that it doesn't really mean that anymore. The problem with the word "socialism" is that there aren't two competing precisely defined meanings. There's one precisely defined meaning (the one I gave) and then a bunch of vague usages which vary wildly.
Ideas like socialism and communism sound great to people who do not understand how economics works or how human psychology works. If they did, then they would see just how overly simplistic and impossible their ideas are.
What a load of nonsense. Keynes knew everything about Economic history and had studied it his whole life. His father was Economist John Neville Keynes for crying out loud. Hayek was an anti-intellectual and not an Economist because he didn't believe in applying mathematics. He engaged in the pop psychology of his day. He was ideological and did not assess, evaluate or predict outcomes with the same veracity as Keynes. Austrian economics. Classical liberal. We’d call it libertarian. He called it neoliberal, but the term has picked up different connotations. Like Mises, he was wrong. Keynes has been proven to be correct by the data.
Super interesting comments. There are many brilliant people who don’t have the desire to put time into learning the wide range of scholarship available. They’re too smart to study. That’s Keynes
Keynes had the job of putting theory into practice. Never easy for theorists. As to the "thinking", and the speaking, I think Keynes succeeded, for a short time, in changing the terms in the debate: "public investment" instead of "government spending" and "inflationary spending". There is a difference. Like all investing, public investing can be done well or less well or downright badly. It's a bit too easy to just tut-tut and say "inflationary spending" is bad. Public investment, investment in the public good and in the common wealth, can be done and should be done. It has to be done well. Such that it produces positive future returns, which of course can be hard to quantify, though hardly impossible. Good publicly-owned roads can drive a ton of future private business and profit. Good universal healthcare can reduce sick days and boost the health of the economy. Good investment in scientific and medical and pharmaceutical R&D can (and does) drive innovation and invention (that patents on those inventions should be publicly-controlled at least in part is an important discussion to have).
Physics was actually a sideline for Isaac Newton, too. Newton was more fascinated with the occult and was too busy catching counterfeiters later in life.
@@afgor1088 No he didn't, you are lying. And yes, we are all suffering from a guy whos main interest wasn't economics, it wasn't his thing and what we have is the result.
@@ScandinavianHeretic his main interest wasn't economics but then again newton's main interest wasn't calculus He was eminently well read in economics and even got a professorship of economics at Oxford. Far more than can be said for you, Derek, Mr or Hayek since what he studied was ideology not economics
@@afgor1088 That is just moving the goalpost to be about the potential in aperson's secondary interest, Keynes is not Newton but I can see why you'd like to compare him in this fashion. To confuse the central point about the result, for how much someone read, when the necessary metric is how Well you know your subject, is to approach this in bad faith. I find your proposal unsatisfying. What is more likely after all, that Hayek lied about a close friend whom he know almost a lifetime, went to his actual seminars, himself awarded for his ability in the field of economics, or, that you got it wrong due to your own bias. I know what I see.
@@ScandinavianHeretic when did i ever say it was his main interest? go on point me to where i said that also what bias? i'm no fan of kynes goodbye, clearly you're too emotional to have a rational discussion with
Keynes was more than fortunate that his idea fitted and worked well under the conditions at that specific period of time. In other situations, however, it would be a different story.
Your Keynes quote is a about history of economic thought. Which would have been known Marshall and the Cambridge set. So how does that counter Hayek's claim that Keynes's knowledge in economics was mostly confined to Marshall & Cambridge?
Como você pensa que o Keynes será classificado na história da teoria econômica ou do pensamento? Como um homem com muitos grandes ideias mas que conhecia muito pouco de economia Digo literalmente Veja, ele não conhecia nada a não ser a economia marshaliana Ele estava completamente inconsciente do que estava acontecendo em outros lugares Ele mesmo conhecia muito pouco da história econômica do século XIX Seus interesses eram guiados principalmente por atração estética E ele odiava o século XIX E portanto conhecia muito pouco sobre ele Mesmo sobre sua literatura científica ele era realmente um grande especialista Na Era Elizabethana Eu estou absolutamente espantado que você disse que John Maynard Keynes realmente não conhecia a literatura econômica Muito pouco, muito pouco Mesmo na tradição inglesa ele conhecia muito pouco dos grandes escritores monetários do século XIX Ele não conhecia nada sobre Henry Thornton Ele conhecia um pouco sobre Ricardo, naturalmente as coisas mais famosas, mas ele poderia ter encontrado um bom número de antecedentes de suas ideias inflacionárias em 1820 e 1830, e quando eu lhe falei sobre isso era tudo novo para ele E como ele reagiu? Ele ficou envergonhado? - Oh, não, nenhum pouco Ele era muito seguro de si e convencido que o que as outras pessoas poderiam ter dito sobre o assunto não era realmente importante ... No fim... bem, não no fim, houve um período logo após ele ter escrito a Teoria Geral em que ele estava tão convencido que ele tinha re-feito toda a ciência que ele estava bastante desdenhoso sobre qualquer coisa que foi feita antes E ele manteve essa confiança até o fim? Eu não posso dizer, porque como eu disse antes, nós quase paramos de falar sobre economia Muitos outros assuntos Sua teoria geral das ideias e assim por diante estávamos interessados E você sabe Eu não quero que você fique com a impressão que eu o subestimava Como um cérebro ele era um dos homens mais inteligentes e mais originais que eu já conhecia Mas economia era apenas algo secundário pra ele E ele tinha uma memória incrível Ele era tinha um conhecimento tão extraordinariamente amplo Mas economia não era realmente seu principal interesse - bem, sua própria economia era que ele estava convencido que ele poderia recriar a disciplina e ele tinha mais um desprezo pelos outros economistas Isso se liga a seu ensaio Sobre os Dois Tipos de Mente que você escreveu ao Encounter alguns anos atrás? Bem, de forma bastante curiosa eu diria que Keynes estava mais para meu tipo de mente e não o outro Ele certamente não poderia ser descrito como um mestre em sua disciplina o que descreve o outro tipo que ele era um pensador intuitivo com conhecimento muito amplo em muitos campos que nunca sentiu que a economia era importante o suficiente para... Ele tomou como certo que o livro-texto de Marshall continha tudo que alguém precisa conhecer sobre o assunto Havia uma certa arrogância na economia de Cambridge sobre isso, e eles pensavam que eles eram o centro do mundo e que se você conhecesse a economia de Cambridge não havia nada mais que valia a pena conhecer Eu estou interessado em seu comentário anterior sobre o fato de que ele é um homem com imensa inteligência grande imaginação conhecimento amplo e assim por diante e ainda não era um economista, e não estou claro se você quer dizer que ele não tinha o tipo de mente que sobressai em economia tal como matemática, digo, você pode encontrar pessoas que são brilhantes mas que em matemática são simplesmente sem solução Mas você quer dizer que ele não tinha o tipo de mente que gera economistas de primeira classe Oh, ele tinha, se ele tivesse dedicado toda sua mente à economia ele poderia ter se tornado um mestre de economia da bibliografia existente Mas havia certas partes da teoria econômica que ele nunca se interessou Ele nunca pensou sobre a teoria do capital Ele era muito débil na teoria do comércio internacional Ele era muito bem informado na teoria monetária contemporânea, mas mesmo aqui ele não conhecia tais coisas como Henry Thornton ou Wicksell E naturalmente, seu grande efeito era que ele não sabia ler em nenhuma língua estrangeira exceto o francês Toda a literatura alemã era inacessível para ele ele, de forma bastante curiosa, resenhou o livro de Mises sobre o dinheiro mas depois admitindo que em alemão era só podia compreender o que ele já conhecia O que ele sabia antes de ler o livro
Keynes' knowledge of economics was vastly superior to that of Hayek. Deep down Hayek knew that Hayek had no understanding of money or how a monetary economy worked. Austrian School economics has no applicability to the real world. Shame JMK wasn't there to defend himself.
What I'm gleaning from this is that Keynes derived his popularity with the elites by telling them what they wanted to hear -- that it was okay to tinker with interest rates and inflationary policies and not to worry about consequences. My guess is, the other economists who came before him were more about telling the truth to the same elites, so they were a check on their impulses and passions. What Hayek is saying here is that Keynes was not all that studied on the subject as he and their other contemporaries were. He was brilliant on other subjects and on his limited range in economics.
Another major shortcoming of Keynes's analysis is related to Hayek's criticism that Keynes had not studied the 19th century political economists. Had Keynes read Henry George, perhaps he would have grasped the significance of land markets as a primary driver of economic cycles. It takes no deep study to understand that land markets are speculation-driven and highly unstable. Add cheap and easy credit to the mix and the recipe is ripe for not simply a periodic correction but a major financial collapse and economic crisis.
I worded that poorly. And you are right. They accept them in the current system. They believe the proposed system would be relieved of any market failures, since government intervention would be subsided.
"There was one good thing about Marx, he wasn't a Keynesian"
Murray Rothbard
AHAHA! Love that one! :)
Marx came way before keynes, that comparison is stupid
LaFlammeAzure
Faux cul.
so marx and keynes didn't agree on general principles? i'll let you do the work.
haha
'keynes is dead and we're dealing with his long run.'
M. Rothbard
How about either the short or the long-run after the 2008 free-market and finance based crises those "rational" individual choices caused? Happy with the unemployment and poverty they caused? Great because you are neither unemployed nor economically suffering right?
@@kingerchack1 Ever heard of the Austrian business cycle???
The Central Banks AKA Monetary Socialism caused the crisis.
@@Swift-mr5zi ever heard of the "natural rate of unemployment"? Be unemployed then try to accept who calls your situation as "natural". Idle.
Ignorant of reality
"Prepare to get schooled in my Austrian perspective"
It's one of the lyric haha
I often think that Keynes was loved by governments because he offered a painless political solution and licence to increase spending.
thats why econ academia praise keynes and is supported by financial organizations that rely on state funding and privileges
yep
People seem to forget that Keynes also advocated for lower spending during inflationary periods. It isn't accurate to depict Keynes as this guy who thought racking up tons and tons of debt through massive government spending all the time was a good thing because he didn't believe in that.
Exactly. Its all about incentives. This is why also keynesian econ is predominantly taught in universities. Indoctrination.
@@GamerGeekThug I agree, but politicans do what politicians do... Seems like he completely ruled out human aspect and abuse of government money printer by politicians in his theories.
Guy 1 - Did you hear about the banker who became a farmer?
Guy 2 - Yeah. He could have harvested a surplus but he had no interest.
I have always found Hayek's predilection for pointing out that "there is nothing new under the sun" as one of his most inspiring and endearing qualities.
Yeah, but it's nothing new.
Fred Neecher I see what you did there,and that's nothing new.
it is akchuali from the Bible.
@@yordanvidenov6554 Well thats new
@@ancientnpc yap, especialy 5 years later www.biblegateway.com/passage/?search=Ecclesiastes%201%3A9&version=NIV
I approve this message.
This made me smile.
Where’s your VON
Ded Hayek Ded Hayek
Economic liberaloids cunts approve this shitty report
@@MrLaizard emotional much?
00:00
how do you think he [Keynes] will rank in the history of economic theory or thought ?
00:07 - As a man with a great many ideas who knew very little economics
00:11 - ______________ literally, too .
00:12 - he [Keynes] knew nothing but Marshallian economics
00:15 - He [Keynes] was completely unaware of what was going on elsewhere
00:20 -He [Keynes] even knew very little about 19th century economic history.
His interests were very largely guided by aesthetic appeal
00:29 - And he hated the 19th century
00:32 - And therefore knew very little about it
00:34 - Even about its scientific literature
He [Keynes] was a really great expert on the Elizabethan age
00:40 - I'm absolutely astounded that you say that John Maynard Keynes really did not know the economic literature
00:46 - Very little . Very little
00:50 - Even within the English tradition he [Keynes] did know very little of the great monetary writers of the 19th century
00:59 - he [Keynes] would know nothing about Henry Thornton, Banker
01:02 - He knew a little about Ricardo, of course. The famous things
But he [Keynes] could have found any number of antecedents of his inflationary ideas in the 1820's and 1830's
01:16 - And when I told him about it , it was all new to him
01:19 - How did he react ?
01:22 - Was he [Keynes] sheepish?
Oh no . Not in the least
01:27 - He [Keynes] was much too self assured
And amused?
01:31 - Convinced that what other people could have said about the subject was not frightfully important
01:42 - At the end , well , not in the end , there was a period just after he [Keynes] had written the General Theory where he [Keynes] was so convinced he [Keynes] had re-done the whole science that he [Keynes] was rather contemptuous of anything which had been done before
01:54 - And did he maintain that confidence to the end ?
01:59 - I can't say because I said before we'd almost stopped talking economics
02:04 - great many other subjects
02:06 - his general history of ideas and so on we were interested
02:11 - And you know I don't want you to get the impression that I underestimated him as a brain.
He was one of the most intelligent and most original thinkers I have known
02:24 - but economics was just a sideline for him and he had an amazing memory
02:31 - he was extraordinarily widely read
But economics was not really his main interest
Well his own economics was
He was convinced he could recreate the subject
02:42 - and he rather had a contempt for most of the other economists
02:49 - does this tie in with your two Kinds of Minds you wrote in Encounter some years ago?
02:54 - Well, curiously enough, I would say Keynes was rather my type of mind and not the other
03:01 - he is certainly could not have been described as a master of his subject
03:04 - Which describes the other type
He was an intuitive thinker with a very wide knowledge in many fields
03:15 - who'd never felt that economics was weighty enough to
03:20 - he just took it for granted that Marshall's textbook contained everything one needs to know about the subject
03:26 - There was a certain arrogance of Cambridge economics about.
They thought they were the centre of the world
And if you have learned Cambridge economics there is nothing else worth learning
03:37 - I'm interested in your earlier comment about the fact that here is a man of immense intelligence , great imagination , wide learning , and so on
03:48 - And yet was not an economist . And i'm not clear whether you mean he didn't have the kind of mind that excels in economics; just as mathematics say
You can find people who are brilliant but given mathematics are just hopeless
04:04 - but do you mean he didn't have the kind of mind that makes for first rate economists
04:08 - Oh he had -- I mean if he had given his whole mind to economics he could have become a master of economics , of the existing body
04:19 - but there were certain parts of economic theory which he had never been interested in
04:28 - he had never thought about the theory of capital
04:31 - he was very shaky even on the theory of international trade
04:36 - he was well informed on contemporary monetary theory but even there he did not know such things as Henry Thornton or Wicksell
04:46 - and of course his great defect was he did not read any foreign language except French
04:50 The whole german literature was inaccessible to him
04:53 - he did , curiously enough , review Mises book on money.
but later admitting that, in German, he could only understand what he knew already
05:03 - what he had known before he read the book in English
xD this vid has 5 min
@@dziwko-e2l yes, he did a great work
thx for the lyrics
Thank you
I wish that people would give Ludwig von Mises the credit he deserves. He's the one that converted Hayek from socialism and he was a believe in true laissez faire. He is perhaps the greatest economist of all time.
Yeap, true scientific genius when he introduced the term "praxeology".
2008 Lehman Brothers
They Made a vídeo of mises vs marx
There is an entire liberal institute named after him.
The best economist is Keynes. Not these idiots.
A fascinating interview. Hayek and Keynes were friends despite their great disagreements on economic theory. I think Hayek gives a fair account of his friend in this interview. Keynes was extremely intelligent, but dismissive of the contributions of others. Unlike Newton, he refused to stand on the shoulders of giants.
Unlike Newton? Newton hated people who would use his ideas to do even better things
Newton also stole calculus from Leibniz and claimed he created it. Fuck Newton.
No No I did not steal anything!
Keynes was wrong: that's the main point, and the libtards and commies loved him because he advocate permissive, irresponsible economics. Look at the mess that the US is in now thanks to Keynesian economics! Obama and Bush!
@@NoNo-mq8nl It was developed by both of them at the same time
Let's not forget that Keynes views on social and economic issues were colored by some interesting perspectives. First was his social class (Elitist). Second his friends were largely eugenicists, and he was their mentor. He was Director of the British Eugenicists Society. Perhaps his views entertained the notion just like good buddy Geroge Bernard Shaw, that if you could get rid of that "social trash" you could create those "sunny uplands".
Charlie Duran There is liberal intellect for ya! Genius!
Prove one thing I said false.
+Quasimoto44 Don't worry about that guy he is just another liberal smart ass.
+William Morrison Ehh, actually Keynes was thought a part of Fabian movement and some taint him as bolshevik. It was not such a slur then, in fact having learnt, what the winning countries after the WWI had in stock for the Europe, he was sure that was a sure path to a new world conflict and proclaimed that capital will destroy itself and all that is left for him is to be "buoyantly bolshevik". Nonetheless he was a brilliant economists compared to Hayek. There are a couple of names when it comes to economists who pushed the evolution of economy forwards, Keynes is among them and Hayek does no make the top list. He is just an intellectual lackey of big jewish capitalists, that is all that most of the austrian school is about. With an exemption of Schumpeter who did not fit with the austrian school, but was from Austrian Monarchy and (apart from Hayek) brilliant theorist
+William Morrison True in part. Brilliant, yes! Bastard? Yes! Brilliant Economist? Not so much.
Those are ad hominem attacks and have nothing to do with Keynes ideas. Charles Darwin was also a eugenicist but that doesn't invalidate natural selection!
Keynes called Hayek's book Prices and Production "one of the most frightful muddles I have ever read", famously adding: "It is an extraordinary example of how, starting with a mistake, a remorseless logician can end in Bedlam"
I never saw that quote from Keynes, but it's ironic as hell, given that his general theory is built on the moronic postulates that build into the monstrosity we live under today
Keynes was apparently incredibly intelligent. The famous Bertrand Russell, a close friend of Keynes, said that he always felt intellectually inferior to Keynes whenever they discussed ideas.
Keynes was intelligent the only thing he lacked was understanding of human nature. He probably would have never guessed that his theories and ideas would be taken out of context and manipulated by the people. Especially the rich.
@@mheekkim2901 - Keynes ideas manipulated by the rich, lol.
Important to note that Hayek is straight up lying when he says that Keynes didn’t know about the history of economics. Keynes had an immense knowledge of the history of economics, wrote many articles on historical economists and even discovered a secret manuscript of David Hume.
How about 19th century economic history?
@ He was quite knowledgeable about it as can be seen from his review essays on Malthus & Stanley Jevons. In Tract On Monetary Reform, Keynes notes that Purchasing Power Parity theory was already in Ricardo (citing a speech the house of commons and Ricardo’s book protection to agriculture). He also wrote appreciations of Bagehot and others. Even early in Keynes career his obituary of de Molinari was the longest in the English language.
Keynes was also one of the world’s leading experts on Ancient Mesopotamian money, which influenced Treatise On Money. He noted that units of account in terms of barley uniformly predates units of silver, which made the convenience story of money seem historically false.
In case anyone thinks Hayek is being mean to Keynes, Joan Robinson (herself a radical left-wing economist later in lafe) claimed that Keynes was criticising Marx without ever taking the time to read him.
I think you'll find most people who criticise Marx have never actually read him.
hahahaha. I totally agree. I'm a Marxist sympathiser and I've never read anything he wrote either.
+Fred Neecher read him. Thought it was awesome while I was a teenager, but realized it was idealistic and impossible, and once you look at attempts at communes and other socialist attempts you realize it's such a failure.
"but realized it was idealistic and impossible, and once you look at attempts at communes and other socialist attempts you realize it's such a failure"
Marx himself recognized that practical attempts at working communes had been failures. He labelled them 'utopian' as opposed to his 'scientific' socialism. What he meant by that was that his socialism would supposedly come about though the working through of the necessary tendencies of capitalism. Which would create the conditions in which socialism could actually work. The supposedly inevitable conditions never materialised however, and socialism remains 'idealistic and impossible'.
Socialism CANNOT work, period.
It is immoral, violent, and irrational.
There is NO WAY it can work, period.
Hayek talks about Keynes at greater length in his book "The Fatal Conceit". I think the book is a better but not the landmark book that the "Road to Serfdom" became.
Mike Kelley - I read ‘The Road To Serfdom’ earlier this year, and was absolutely blown away. I loved the accessibility of the Free to Choose visual TV series, but Hayek’s work is just on a whole different level compared to anything from Friedman or The Chicago School. I’ll have to check out the Fatal Conceit now, thanks!
@@christopherarmstrong2710 Consider reading "The Use of Knowledge in Society" - this essay presents an irrefutable argument as to why planned economies will always perform less efficiently than free markets... It boils down to the degree to which transactional decisions are rational - when decisions are made withe insufficient or inaccurate information, they result in inefficiencies...
Matthew Barton - I’ll add it to my list, thanks! Planned Chaos by Von Mises sounds similar. Been out of the fray of economics texts, lately (dense and dry material).
@@christopherarmstrong2710 If you're newer to austrian economics I recommend reading Murray Rothbard, he's the most easily digestible and enjoyable to read
@@joshASM
Let's maybe not start with anarcho-capitalism! I think Rothbard and - especially! - Hoppe are probably too crass for someone new to the Austrian school.
I got my start with Ludwig von Mises, more precisely his book "Liberalism" which I still regard as a perfect introduction to the "Austrian" thinking.
But eventually you would logically have to end up with the advocats of a private law society.
Keynes never actually studied much economics? Well that makes...absolutely perfect sense and explains a whole lot.
Biden is applying keynesian "economics" and guess what stagflation
Keynes had no formal economics education. He had a BA in mathematics. That's it 😳
@@pneron2032 Why do you think you Need an Economics degree at all to describe the Economy? After all the neoclassic theory (the dominating theory in Economics) is bullshit anyway.
@@marjo7467 ... Did Keynes simply "describe the economy"? Name one Keynes book that you have read.
@@pneron2032 Winnie the Pooh
"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design." - Friedrich August von Hayek.
I came hear from the Keynes vs Hayek rap battle. Fear the Boom and Bust. It was pretty cool
Me too!
How can it be that the algorithm never showed that to me? That is awesome!
Economics was not his main interest. lol
I don't know. We are just listening to Hayek's views about Keynes. I don't know how accurate that is.
@@fernandor4617 He was right.
Fernando Ramos I think he is making a joke about interest (rates)
@@fernandor4617 not even close to accurate... I mean... Keynes has a legacy of saving capitalism from itself after it's great crise. He did more than simply nagging about how states intervene on concocted magical forces that balance everything.
It's true. Keynes made also a lot of contributions on other fields like probability theory and statistics, where he indeed was better.
Keynes didn't have to know economics. He only had to know what the politicians and bankers wanted to hear.
"he was completely unaware of what was going on elsewhere" bars
“He was completely unaware of what was going on elsewhere. He even knew very little about 19th-century economics. His interests were largely guided by aesthetic appeal. And he hated the 19th century and therefore knew very little about it...”
Keynes seems like another example of those academics described by Thomas Sowell, with big egos who wander outside their main field of study with disastrous results.
There was nothing disastrous. It produced the golden age of capitalism. Far more successful by any measure than Hayek’s theories have managed in the real world, and it’s the era the working class of today always long for.
Like, very sadly, Jordan Peterson seems to be doing now :(
@@piotrd.4850 How exactly does Jordan do that? Care to elaborate?
@@piotrd.4850 care to explain?
TBF there are plenty of economists who also have disastrous results. The problem is the government is so big they pay economists who say what they have to in order to get another paycheck. They end up all over the media and become more well known.
If the government offered me $500k a year or more if I work for the FED to pretend minimum wage and rent control were good and fair ideas I probably would.
Now you cant get a university position like Sowell and Friedman had if you arent pro big government. So you cant make a decent living.
I love economics and would happily do it with my life. But I would never get hired by the central bank or by a uni. So I went into a different field.
Keynes was certainly brilliant. And yet, he failed to recognize the continued and growing power of landed interests in the modern, industrializing economies. Some of his contemporaries (such as Scott Nearing, John R. Commons and Harry Gunnison Brown in the United States) found sound analysis in Henry George's application of David Ricardo's "law of rent" to resource-laden and urban land as well as to agricultural lands. Without any deep analysis or explanation, Keynes simply asserted that rent was insignificant in modern economies. Did he not have access to statistics showing the rapid increase in location rental values in the worlds' cities. Land at the center of any city or town was valued by the square foot. The simple process of market capitalization occurred to convert annual rental values to a selling price for land. And, as George observed, this claim on wealth occurred with any expenditure of labor or capital goods on the part of the landowner/rentier. This blind spot by Keynes meant that he failed to call for changes in tax policy that would largely prevent credit-fueled and speculation driven property market cycles of boom and bust.
This aged like fine wine.
Thanks for uploading these videos, I find them fascinating.
Keynes whole General Theory is misguided by the circumstances of his time.
The purpose of a working economy is to satisfy material human needs with the least amount of resources, since these are scarce and human needs in principle indefinite. Labor is one of these (scarce) resources. Keynes perceived employment as the purpose of a working economy / labor as an abundant resource and his whole theory is guided at fulfilling this purpose even though the point in economics is to use resources effectively and efficiently. Use the resource labor just because, is the exact opposite - wastage.
This may sound cold and harsh but in my opinion its true.
But if you have realized this truth and how economies work you can start to think of ways and means to balance economic results, that arent exactly desirable, like the lack of use of a very expensive resource labor / unemployment.
Pump more liquidity into economies / temporarily increase the velocity of money if economies try to adjust themselves (likely to the consequences of previous liquidity pumping) is no solution, it just transfers the burst into the future.
He was a millenial socialist who believed in a post scarcity world.
perfect
its funny my political compass came out nearly exactly where yours is and my thoughts on this are mirrored to that of your own. That thing is more accurate than i thought.
Ill-informed reply. Keynes and Smith both said that consumption is the ultimate goal of production. Thus, economics is the study of how to optimise consumption. Often this means maximise, although it should really be more qualitative and consider distribution more. To be fair, Keynes mentions the marginal propensity to consume and how it decreases with income. This is why inequality is bad. It generates too much saving (to the extent where banks cannot loan the savings to profitable enterprise. Speculative bubbles and more risk taking can happen). Or, less consumption (more saving) means firms fire people cos less people are buying products (revenues fall, less incentive to invest).
Since there is no limit to human desire, the optimal economy is one where ALL resources (every piece of land, every person, all money) is put to use (in a sustainable and most effective way) to fulfil as many of our infinite needs and desires as is possible and make us all as free as possible. This is why economic wealth or utility should be interpreted as things like freedom, happiness, leisure time, life expectancy. Innovations create wealth because they make things possible, easier or more resource-efficient. (Washing machine frees up time to spend how you like. Gives you freedom. Money buys freedom. Employment gives people a chance to increase freedom. We want to give as many people as possible, an acceptable amount of freedom).
Anyway, Keynes says that unemployment is irrational since it is a waste of resources (people willing and able to work = unemployed. People who could be retrained and employed in a way that helps us fulfil our infinite desires) The ideal economic system doesn’t waste resources that are able to work.
The only way your idea would be correct would be if the unemployed are unable, perhaps lack the skills, to work and Keynes is simply suggesting they be paid to do ANYTHING. He did write that famous line about paying people to dig a hole and refill it. That line did more damage to the interpretation of his work than he could ever have imagined. In the case when people are being overpaid given the quality (value) of their output (productivity), government should provide physical and mental health care and welfare benefits to ensure everyone has shelter and food WHILST supporting citizens through education/training. So that these citizens (resources) can be put to productive use (so long as they wish to be) and we can maximise the fulfilment of our desires (for things and experiences that can be morally exchanged for money).
The minimum wage is a moral, not an economic, policy. Yes It stops the market from functioning mathematically ‘perfectly’, although from a moral perspective it is far from ‘perfect’ that someone could be paid a wage that cannot sustain a basic life.
This would require more taxes and employment support from the state.
the fact that Keynes is loved by government types is all people need to know.
I put the link in the discription bar, under "Source" just click it. Or if you have problems with that or type hayek interviews into google it will be the first result. You will know when you're there as they are hosted by Universidad Francisco Marroquín (UFM) website.
"I simply do not trust them ANY of them to describe the world we live in by way of econometrics" You sound very much like Hayek in his nobel prize lecture The Pretence of Knowledge.
Funny now in 2024 I could say the same thing about all the modern economic “experts” who wouldn’t have a clue what the Austrian school was if mentioned to them
I posted this on another Hayek interview...had U.S. political leaders bought into Hayek instead of Keynes, our country would not be facing national bankruptcy.
In Keynes last letter he lamented over the fact that if he HAD found any purity in his theories it has been lost on the welfare economists who had taken his ideas and used them to promote deficit spending on social issues.
That seems to be Keynes biggest failing, he didn't understand the political implications. Politicians only listen to the parts of the proposal that they want to hear.
Amazing that Keynes economics has prevailed as it is apparently that which works best in the politicians' interests in getting re-elected.
Yup, they just picked the parts they liked while hiding behind the blanket called Keynes.
Exactly "keynesian economics" is good for politicians and elections and bad for economics lol
Its simply marx draped in the cape of markets.
Hayek-Splosive information here, and on our channel. Come check it out.
Why'd you agree that Keynes "knows little about economics"?
OMG, I am just connecting the dots... 👍 Thanks Mike
@@boulevarda.aladetoyinbo4773Keynsian economics has destroyed the world. January 2021 Trillions $ being printed, economic reset/ collapse imminent!
I can't help but think Keynes advantage was precisely that he didn't concern himself with dead ends in economic literature, and that that was the only avenue that Hayek could really compete with him.
I think Keynes views can be perceived fairly easily. He was a Fabian Socialist, though anti-communist. He was more favorable of Fascist style Statism in a controlled economy, "corporatism" (not NAZIS though he was the Director of the British Eugenicists Society). He was vindicated in his mind, by FDR's attempt at complete control of the Depression economy, and that centralized control met with his "politic". Unfortunately, he was the "sexy" economist because he was a renegade, and seemingly preached the easy way out of economic problems. But, Keynesian theory could be said to be behind the housing bubble, since two key elements were present he would approve of. Low FED interest rates, and FEDERAL LAW in the CRA Revision Acts of 1993, '95, '99 under Clinton. The laws required Banks execute Capital outlay at original 20%, then 50%, and then we had NINJA Loans in '99. That was because Congressmen who, in cooperation wrote the laws, said that if you asked someone who was a minority to provide evidence of income, or a Social Security Number, it was racism! I will never forget Barney Frank's speech on this on C-Span. Then in 2002 Andrew Cuomo was on C-Span saying 5 banks were at risk of failure, and suggested two terms I had never heard before; "credit-swaps" and "derivatives" as a solution to diversify the risk through the entire banking system. The meeting was with the CBC and ACORN leaders where he said this, and of course the Banks greedily complied and they all pulled us down. Keynes would have approved, and denied that Government had any fault in the failure of government intervention. But does common sense provide that Bank's would normally engage in risky loans?.
*****
First he was a self professed Fabian Socialist along with his good buddy George Bernard Shaw. Shaw loved Fascists and Communists. Did Keynes accept Communism? No, he completely rejected it for self-serving interests probably are much as any moral reason since he was an ultimate materialist.
I think you have a "NAZI" perverted leftist notion of Fascism. As Mussolini said in 1922 when asked at his first press conference, what is your economic plan. He said, "Corporatism", later defining it as "The marriage of government and business. What I don't seize I will intimidate. And not one Italian business is entitled to one Lira of profit that does not benefit the State." That sir was the definition of Fascism, not some spin-off of the Khrushchev -Stalin claims of 1936-37. Mussolini read Georges E. Sorel's, "Reflections on Violence" - 1908, in the year of 1914 and finished his transition from Communist Party President ending in 1915 to Fascist in 1919. Why? Because as he wrote to Lenin in the fall of 1919, the whole Fascist Theory was based on one line, "A nation deeply entrenched in private property will never give up that property to a bottom up proletariat revolution. It must be seized from the top down!" That sir was Fascism, not some perversion of it by desperate war monger/racists.
It should also be noted that Keynes believed whole-heartedly in Shaw's agenda of mass genocide, being the Director of the British Eugenicists Society and mentor. "Middle of the road"? Give me a break! Adam Smith didn't do anything to harm the world. Marx promoted mass murder of not only his fellow Jews, but in 1850, all Slavic peoples. His view of government stimulus was politically serving and beyond common sense. Look at Japan today after its fourth Keynesian stimulus last year of $1.8 trillion. The Democrats say $867 billion wasn't enough. Well considering Japan's population, that is a whopping amount. Did it or will it work! Not a chance. Japan has just increased its troubles. However, unlike President Obama, he did not believe in debt spending. I will give you that! I don't deny a mutual admiration club between FDR and Keynes. FDR believed in 100% government control. Remember the "Blue Eagle" Program? I imagine you will not tell me Fascism was "right-wing"?
Lastly, I agree completely on the deregulation except I doubt it had that much effect. The CRA Revision Acts of '93 '95, '99 and the steroid pumping of Fannie and Feddie did more than anything else. Credit Swaps and Derivatives were suggested by Andrew Cuomo in 2002 while Director of HUD to save 5 major banks on WallStreet because they were "too big to fail!" Blame the Democratic Congress. 17 bills submitted to reign in Fannie and Freddie who bought $5.5 trillion in sub-primes. 13 by Republican House, 2 by Republican Senate, and 2 by George Bush in 2002, 2003. All blocked in the Senate by Democrats, though passed in the House in 2006.
*****
I put absolutely no stock in Politico or Freedom House. Mussolini told us what Fascism was. Sorel, the most radical communist in history coalesced a cabal of communists input during the 1875-1895 Communist Anti-Rationalist Movement into his book, Reflections on Violence. Not one contributor was a Conservative, or a classical liberal. Fascism was created by Communists, for Communists, because of the failures of Communism. 100% Statist control is dictatorship. Communism was compromised for the very reason I said before. Sorel understood that a nation deeply entrenched in private property would never give up that property to a bottom up proletariat revolution. Mussolini made Sorel famous in Italy, much more than in France, because of his championing of Sorel. Mussolini was the President of the Communist Swiss Mine Workers Union at age 17. He and his father were life long communists. Why the change Brian? He was the editor of 4 Communist News papers. Why the change Brian? The first person in history to claim that Fascism was "right-wing" was Nikita Khrushchev in 1936, when he called the Mensheviks, "radical right-wing Fascists!" Stalin followed in 1937 calling the POUM, the Marxist coalition (Mensheviks) that that unwitting George Orwell found himself fighting with, "right-wing Fascists!" He left off the "radical". How do I know. I still have family in Melitopol, Zaporozhye Oblast, Ukraine. I lived in the Soviet Union. I spent 1/2 my life in the Soviet Union. And I know these men. But I should defer to your convenient and contrived "modern" liberal view instead of listening to the men themselves? I have read Mussolini and Lenin's letters, released after Glasnost. On 19 March 1919 Lenin named Mussolini the rising star of communism. Later that fall Mussolini wrote to Lenin saying he was going a "Third Way". Lenin was furious. They did not write again until 1922, two years before Lenin died. Then they became friendly because Lenin saw what Mussolini was doing in Italy. I read these letters, but of course they are in Russian, and translated from Italian into Russian. You conveniently distort Fascism in the US. Who said, "Not one citizen will be allowed to make more than 2500 Marks, or be allowed to live off of their investments? Sound right-wing to you? How about this one? “We are socialists, we are enemies of today’s capitalistic economic system for the exploitation of the economically weak, with its unfair salaries, with its unseemly evaluation of a human being according to wealth and property instead of responsibility and performance, and we are all determined to destroy this system under all conditions.” - Adolf Hitler said both. Have you ever heard of I. G. Farben? Why was Hitler harassing them for almost 2 years? He harassed all corporations, especially Jewish owned. By the way, Woodrow Wilson said that Georges Eugene Sorel was his favorite Communist Theorist after reading his book sometime after 1908.
I do not have time for all these issues, but FDR prolonged the depression, and only WWII saved the US economy. Europe recovered in 3 years. Show me the improvement from 1930-1940? And evidently you have not been reading the news these last two days. Japan is not what you think!
+Brian Lucas
Quotes by Keynes:
"Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone."
"By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens."
"The decadent international but individualistic capitalism in the hands of which we found ourselves after the war is not a success. It is not intelligent. It is not beautiful. It is not just. It is not virtuous. And it doesn't deliver the goods."
He sure sounds like a flaming Capitalist! My guess is Tea Party.
Quasimoto44
Keynes was critical of capitalism. How is that Tea Party? Tea Party believes in Laissez-faire, limited government, and the free market.
Keynes said we need government to step in and save the economy. Hoover and Roosevelt's Government interference caused the elongation of the great depression and following recession. In contrast Calvin Coolidge cut the top rate to 25%, eliminating all income taxation for some two million people-and revenue went up not down! He also cut federal spending by 50%. So instead of budget deficits, America ran surpluses, American debt was reduced by 25%, and American credit was the most sought after in the world. And by 1923, unemployment had plummeted to 2.4%.
pkswilly
I think there is a disconnect. I don't think Keynes was at all Conservative. He was a Fabian Socialist, and Director of the British Eugenicists Society. He was best buddies and in a sense, mentor to George Bernard Shaw, the inventor of the gas chambers. No, you can't equate him with the Tea Party. You can me, because I am a member. Keynes couldn't get in the door. And I absolutely agree with everything you wrote here!
Unfortunately fact makes no difference to leftist ideology. History is not a teacher! It simply needs a new administrator to fail again, circa President Obama. How has Keynes worked out for Japan since 1990? If you adhere to Empirical Evidence, you are a Neanderthal according to the left. But the economic view is part of the "Humanist" view that "God is dead! Mankind can only be saved by the superior experience and intellect of the Elite Class, not some pagan religion!" They believed like Marx and Engels, and Marx literary mentor, Jean Jacques Rousseau, that just trimming the "social trash" from the population would allow their humanist, economic utopia.
This man is one of my fucking heroes.
+The Polemic Hey, what about Milton Friedman, he was the real legend.
+The Polemic I doubt Hayek could have been more eloquent in describing your feelings for him. I've read many of Hayek's books as well as Milton Friedman, I can share your exuberence. There is a lot of excellent videos here, one of the best is Friedman and Donahue exchange. I have a lot of respect for Phil only because he asked some very good questions to Milton and that he listened as he was being schooled. Milton had a way with words and saying things that didn't offend but clearly made his point while making the other side look rather foolish. Read The Commanding Heights by Daniel Yergin. Excellent book on the story of worldwide economics. With Churchill being deposed as the prime minister of England, Clement Attlee came to power. Keynes was at the London School of Economics and was friends with Attlee and thus Attlee chose Keynes and Hayek's ideas against central government control was ignored.
+Muhammad Adil as an Austrian that disagrees with Milton on a lot he is absolutely a genius and a hero
+mynameisliberty1 Uncle Milty's son David and grandson Patri are wonderful...
+soapbxprod I've seen David speak but haven't read his books yet. He's great at discussing anarchism from a utilitarian perspective
Most economists are well-informed, well-meaning and wish happiness to all. That itself is reason to respect the discipline.
Keynes is not to blame for the state of the economy. Economics is governed by rules, the people who run the economy have only one rule, stay in control.
They do not obey rules, they make the rules.
This is why Economic theory does not model the role of central banks and the banking system in general with any rigour.
This enables people to major in economics and understand nothing about how the real world actually works. Lots of math and models and theories, but when 2008 came it was a surprise.
The reason was that the instability was engineered through the banking system, the economist's blind spot.
Economics is not a science, it is a hobby. As long as banks can transfer wealth by manipulating interest rates or creating currency wealth flows will not obey any economic theory.
True enough, Kaynes isn't to blame for the state of the economy, the people who follow his misguided economic theroies are to blame.
Matias Nope, can you define "market failure"? I often find people who use this phrase have no idea what it actually means.
Dear Alex B., although I do not want to intrude, "market failure" must be the moment when bankers rush to the White House
asking for tax payer money
***** I see. So you have no idea what a market failure is.
Alex B. If I define economy as efficient management of the worlds resources and the interaction of the population with the distribution and consumption of those resources, a successful economic model would be a sustainable version of this that objectively meets the human needs of the population.
I would define the market itself as a failure, all you really need to do is look at the world around us. However I could generalise the problem of market economics as being based on some fundamentally questionable assumptions of human nature: Motivation, competition, and greed.
I would reccomend Dr James gilligan and his studies of human behaviour along with Dr Robert Sapolsky and his work with genetics. I would like to know what you think.
Human nature is a loaded term that displaces causality to something out of our control. I think it would benefit our economic train of thought to understand that a substantial amount of human behaviour is circumstantial and heavily influenced by environmental coercion.
To summarise, the assumptions of human nature in market ideology are actually behavioural symptoms of market dynamics in and of itself. Market psychology is inherently coercive, competitive and selfl-interested, inequality is inevitable. This is certainly not good for humanity and I would like to point out Johan Galtung's theory of structural violence.
Adam Crossley "I could generalise the problem of market economics as being based on some fundamentally questionable assumptions of human nature: Motivation, competition, and greed."
Of course, you could NOT "generalise the problem of market economics" based on the above, as FREE market economics is based on cooperation. Of course, human nature does indeed contain motivation, competition, and greed, but those do NOT form the basis of voluntary transactions. Peaceful cooperation does.
At least you got the definition of market failure correct, though. The problem that many have is they think that other institutions besides free markets can do better, when the entirety of human economic history says otherwise. Inefficient allocation of resources is almost the definition of government action as it DEPENDS on coercive actions forcing others to do things they don't want to do. If you cannot convince people to do something, it is likely not in their best interest, and the forceful coercion of people into those actions is by definition inefficient.
"Market psychology is inherently coercive"
Of course, this is absolutely false, as NO ONE in a free market can coerce anyone to do anything. Persuasion and cooperation towards common goals are the basis of free markets. It is government action that is based upon coercion.
Alex B. This is quite a typical response from anarcho-captilism. The problem with this is the failure to recognise the coercion. A free market you say is based on cooperation and voluntary transaction, therefore by definition it is in opposition to coercion.
What I would like to point out first is that peaceful cooperation would only come to fruition in an environment that structurally promotes that ideal. Free market economics does not reinforce cooperation because it is structurally coercive.
To address this specific failure to recognise the coercion comes from a truncated point of view of what coercion means and its source. When I say it is structural, it is the market system itself that is the source of coercion.
The coercion is the necessity to engage in the market outright, do you comprehend? This is coercion because it is not a choice. Although it is not an explicit physical coercion, it is a systematic one.
It is a futile endeavour to pedal such a false dichotomy as free-markets and controlled markets because the market itself is structurally incapable of being optimal with respect to my earlier definition of economy.
Peter Joseph tries to break down this cognitive pathological tendency in free-market capitalist ideology in his debate with Stefan Molyneux, to no avail as Stefan’s capacity for critical thought is limited by this duality coupled with his personal investment in his beliefs of anarcho-capitalism.
We are technically capable of feeding and housing the world’s population without discrimination, and this is a quantifiable fact. We also have more than enough resources to supply the world’s energy needs for thousands and thousands of years.
Relative abundance is fact. We need to orient our economy towards scientific principles and change our value systems.
And we're suffering under his economic theories still.
Hayek’s, yes.
@@jgmediting7770 Hayekian theory is the economic orthodoxy😐 Really man? New-Keynesian economics is by far the second most prevelant school of thought in the whole field of economics behind neo-classical economics
@@WielkaPolska-o9t we’ve had a neoliberal economic system for the past 40 years. With regards neoclassical school, that is not necessarily a free market school. But you only ever hear from the free market wing of the school, because that’s who gets platformed and the other wing cancelled. Economics of the neoclassical school has actually come up with good ideas and research that destroy the free market wing. Dating back many years.
Hayek and friedman is the orthodoxy for the past 40 years, yes. The gods of the right wing. And it’s utterly failed, like it’s always failed. Unless you’re a certain kind of capitalist. I mean, you are aware of the 3 economic systems of the past 200 years in America and Britain?
Hayek's influence on Margaret Thatcher was phenomenal. My book "Thatcherism Hayek & the Political Economics of the Conservative Party" looks at this
No (and your comment is very close to getting the banhammer for baseless slander). Hayek was in Britain in Cambridge during WW2, writing the (Nazi unfriendly) Road to Serfdom & often having dinner with John Maynard Keynes. Hayek moved to Britain in the 1930's and abandoned use of his title voluntarily on becoming a British citizen. No one would have stopped him using 'von' if he wanted to but he chose to be known as FA Hayek.
Keynes vs Hayek boils down to theory vs reality. Keynes approach of powerful central planning is more likely to result in power hungry despots gaining control and developing a world full of corruption. Hayek’s theories lend towards organic growth and decentralized power, much less vulnerable to becoming corrupted.
"The Nazis weren't socialists" It is clear that anyone who makes that argument has not read The Road to Serfdom. It is the definitions which catch the unwary out.
"A lot of people talk about my book very few have actually read it" Friedrich Hayek
"Fascism is a capitalist response to socialism" Is a self serving Marxist canard spewed by people who don't want to study the world in its full complexity.
A nazi is just a communist with a racial theory.
Malthus0 You can use socialist term for nazis, even you can see seahorse as a real horse, snowbird as a bird made of snow, that's okay for me. But you can't equalize marxists and nazis. Equalizing the Marxists and nazis is oversimplification and falsification of the facts and history.
@@tusk9901 Well yes, equalizing them entirely is wrong - their names are different for a reason. But knowing the history of both ideologies one cannot deny they are deeply related. They ended up enemies as over time, farther away from their common conception, they heavily diverged.
But nevertheless, their roots are both in Marx. As marxists developed marxian theory deeper, the french syndicalist Georges Sorel eventually slightly diverged, and claimed the workers' revolution could never be achieved so long as democracy rules (he viewed democracy as keeping the workers barely satisfied in the short term with many inconsequential perks so they do not revolt). Heavily inspired by Sorel, Mussolini developed his doctrine of fascism, where he covered socialism from a nationalist perspective - proletarian nations vs. bourgeois nations. Nazis developed further into racial territory.
Point being - they are connected by their roots, and their fundamentals. Polylogism, collectivism, totalitarianism (not necessarily dictatorial, but necessarily totalizing politicization of life), opposition to liberalism and capitalism.
Calling nazis socialists is not calling seahorses horses. It's more like calling horses equines. Their socialism is based on very different characteristics (economic class and relationship to the means of production vs. race and a wide idea of nationality and ethnicity), but it is still socialism all the same. A donkey is different to a horse, but they are both equines.
A porcupine, however, is not a subspecies of equine; that's capitalism.
Yeah, Keynes was a man of many interests. He was a government worker and administrator and the #2 man for the British at the Treaty of Versailles conference, a popular author, the editor of an academic journal, an investor, an investor for an endowment for King's college and for some insurance companies, a lecturing professor at Cambridge, an art lover and art sponsor, a life-long student of probability, philosophy, poetry, etc. Bertrand Russell knew him since Keynes was a teenager and said "he worked himself to death."
More importantly than his many interests is that he was still wrong about economics.
@@spencerhopkinson9874 He was the greatest Economist who ever lived and he was correct in almost all respects. He demolished the Austrian School. The three worst Economists? Mises and Hayek and Rothbard....
@@myguitardetective5961
We get it, you’re a statist and freedom scares you. Cry more.
@@spencerhopkinson9874 Hayek wasn't a proponent of Freedom and he was never an intellectual. He was a backward ignoramus with an anachronistic 19th Century view of human nature. He was a Social Darwinist...and all of those guys are idiots. Sounds like your one of them. You need to look up the term statist "Einstein." Keynes was not a statist and neither am I. There are no Utopias in Economics or politics. Keynes, brilliantly, understood that any socioeconomic system had to be an admixture of both to curb the shortcomings and excesses of both. You need to read more...Keynes won. Your ilk just can't handle the truth of it...
@@myguitardetective5961 commie statist.
Math is the wrong note to strike with Keynes regarding his blind spot. Keynes was a math major at Cambridge and an expert on statistics, especially. He was an expert on probability too and wrote his fellowship dissertation on it. Keynes was focused on philosophy, math, stock markets, commodities futures, running endowments for life insurance companies, teaching, high society, ballet, etc. He was the kind of person to score 800 on both math and verbal sections of the SAT.
Hayek wasn't criticizing his math. He was criticizing his lack of economics.
He was pretty good at math but by Cambridge standards he wasn't elite, his mathematics tutor called him "competent" at mathematics but said " he had no specific genius for mathematics ". This is born out by the fact that he finished 12th in the Tripos, which is good for a normal person but not great by the standards at Cambridge.
When he took the civil service exam he finished 2nd overall out of the 10 hired that year, but his two worst section scores were in mathematics and economics, which prevented him from getting first place and the position he wanted at the Treasury. However this is beside the point, Hayek was talking about Keynes' lack of understanding of economics, which he didn't specialize in. Hayek did say he could have been great, but that he didn't devote the time necessary to master the subject.
aligborat Apart from what the Tripos and civil service exam tested, his specialty in math was more in the area of statistics and probability, anyway. As you know, math is a vast field with many sub-specialties - topology, set theory, etc. Keynes toyed with the idea of teaching statistics as a fall back job after graduation, and, of course, wrote his dissertation on probability, on which I think most would say he was beyond merely "competent."
Dexter Haven His thesis was initially rejected by a committee of two math professors in 1908, after conferring with the two examiners ( One of whom was Whitehead ) and Russell he significantly reworked the thesis and submitted a new version in 1909, and the new version was accepted and then he was elected a Fellow, this thesis then became the basis for his book on probability. He apparently tried hard in the Mathematical Tripos, but he finished 12th, very good for a normal person, but not exactly sparkling for Cambridge or Oxford. The point was that Keynes often didn't think he needed to work as hard as others, but he was often wrong, Hayek said that wasn't aware of much economics literature outside of Britain, that was the main point anyway.
aligborat OK, very interesting. But I think one key factor even more than "thinking" he didn't have to work so hard was how he styled himself a polymath and spread himself so thin - with the Moral Sciences Club, as editor of the Journal of Economics, as a professor, writer, commodities trader, investor for insurance companies and colleges, government work, patron of the Opera, Bloomsbury Society, etc. I would have liked to have seen his monthly calendar!
Ever think he and Russell were part of the final wave of men with the conceit to think they could know it all? And Russell's idol as a kid was his godfather John Stewart Mill, the last official Renaissance man. But the sciences were expanding fast, outpacing Russell and Keynes, making their polymathic efforts futile, and revealing how shallow their understanding was in their core areas. Russell's protege Wittgenstein did far more trenchant work in philosophy than he after WW1, and Russell and Whitehead's PM was proven wrongheaded ab initio by Godel later, etc.
And Keynes made naive assumptions about politicians, and what their self-interest would do to entrench deficit spending in good times and how they would remain beholden to vested union interests, always favoring short term targeted stimulus for votes at the expense of the general interest and long term economic health, and so on, which has gotten us in our current fix. The US's Founding Fathers were right to put politicians in a strait-jacket as much as possible, I think. They knew well the abuses of powerful politicians, who break things and then demand a power increase to fix them...
Unfortunately you miss the cornerstone of Austrian school of economics. Please read Friedrich August von Hayek's nobel prize lecture "The Pretence of Knowledge". Also there are many economic writings that are written in plain english. Read "Economics in One Lesson" by Henry Hazlitt. This book is free on the internet. Google it! :)
It is really sad to observe the most think of these two gentlemen almost as prophets, as though they were dealing with religeon. My friends, we are supposed to produce science and knowledge. There is no Keyner vs Hayek. Being caught in this artificial debate limits your ability to see beyond and to push economics and social science forward. Science is constructed upon the cadavers of previous great thinkers.
Nonsense.
You merely ply one definition of science so to suit your nonsense.
Definition of science:
*a systematically organised body of knowledge on a particular subject.*
It is utterly true that any attempt to use science methodology of, say, physics and apply it to economics will end in utter failure - hence, the failure of "econometrics" - believing human beings can be condensed into a variable.
But economic science, as a "systematically organised body of knowledge" utilises root axioms to build its cause/consequences, the primary root axiom being:
"Man must act to live"
Whereas I agree with most of your above posts, I challenge that the definition of "science" I apply is "vague".
And yes, most of what you present are "Sciences".
Geometry is not. It is branch of mathematics, a tool used by science.
Architecture is not. It is engineering, the application of mathematics and science. It takes the lessons learned from science and applies it.
History is not a science, since it does not require systemic organisation, it is an recounting of a perception of "facts".
Perhaps this definition is more complete:
*Science is a body of empirical, theoretical, and practical knowledge about the natural world*
Myelinator,
Economics is a science, and the "Austrian School" (among others)
are purveyors of the science of Economics.
Agreed. You cannot create an "experiment" on the human race to validate the theory.
@@BlackFlag2012a who sy that they have the truth ?
Westerners are too fortunate to understand the consequences of government-led intervention. If they merely talk about it but are not willing to live in such a government-led country to experience corruption and bureaucracy, they are not practicing their theories. Keynesianism or neoclassical economics pairs well with authoritarian regimes, but in Western societies, the impact of government intervention under Keynesianism is diluted across various sectors by politicians, thus minimizing harm. Unlike in authoritarian regimes, they don't follow one path to the bitter end. Why can't Westerners realize the preciousness of this hard-won freedom? So many people envy you!😷
He wasn't interested in the theory of capital or international trade? How was this guy taken seriously as an economist?
He gave politically easy answers. A politicians dream.
0:12 "He knew nothing about Marshallian economics."
3:21 "He took it for granted that Marshall's textbook contained everything one needed to know about the subject."
I'm a little confused. The latter statement implies Keynes was familiar with Marshallian economics.
He knew nothing BUT Marshallian economics
Hayek was a saint. Eff that fake keynes
Many comments here are quite humorous showing a pure left wing political bias in favour of the big government and bigger government spending Keynesian philosophy. I am surprised that Hayek speaks so negatively about Keynes’ knowledge of economics though. I am just about to start reading an old book about the clash between Hayek and Keynes, should be an interesting read. Like all things political these days, the Left is not right and the Right is not wrong, just differences of opinion which unfortunately can no longer be discussed in public, at least not calmly and maturely.
The irony those are the same people who claim they want to be "free" and speak like liberals.....Rajneesh: "...but the people are retardish"
I thought (and I may be wrong) that England's ventures in India and elsewhere were financial losers, and the cost of administering their empire outpaced whatever returns the crown could capture. It's never been clear to me that imperialism was ever very lucrative for the nations that engaged in it, and I've always thought it had more impact on 19th century politics rather than economics.
Keynes was a great economist and a great man. The battle between Keynes and his camp and the Hayekians was won by Keynes by technical K.O. Hayek was aware of that. His last theoretical book acknowledged that half-heartedly and by a genius move he turned to economic philosophy, a field in which the differences between Keynes and Hayek were marginal.
Later in the century Keynesianism got vulgarized and misused.
"The basic Keynesian economic idea increased government spending and lower interest rates."
Government spending and tax cuts. Keynes preferred fiscal to monetary measures.
Anyway, that was a specific policy recommendation to respond to the great depression. He also recommended raising taxes and cutting spending after the crisis was over. Keynes never said that the government should just spend and spend and spend as a general principle.
Spend in time of roughness, cut in time of wealth and money
A survival of the fittest, justification for inequality has nothing to do with Hayek, and I doubt the other figures you mentioned ether unless you can give a source. Hayek (like Adam Smith) thinks that success in the market is primarily down to luck, rather then genetic endowment. Hayek does have a theory of the selection of cultural groups. But that is about as far as it can be from 'social Darwinism' with its selection of individuals.
Economics is really weird to try and study because no one agrees about anything. I feel like people tend to sympathize more with economic theories that reflect their own political predispositions. I think a fair assessment of Keynes' ideas is that they could be used to create models that have a lot of validity to them. However due to the nature of models Keynes' ideas are incomplete and other options could be devised to create similar or better effects on an economy. What I can say with certainty is that his ideas have been used to great effect by institutions like reserve banks to prevent or lessen the effect of economic recessions and the like. Also please put a comma after the word "brilliant" in the description.
+dahalofreeek You are absolutely correct. That's because the majority of people on this planet are retarded, and look to politics instead of economic reasoning to solve their problems. Politics is a function of retarded population.
I just had a thought about economics. At the end of the day it is the study to further the filed of the "finding the actual most perfect, maximizing happiness thing(s) to do." Maybe this should be more like the core of their political opinions and what they spend time thinking about and discussing.
I agree with this comment.
At the end of the day economics runs the world. You can work with it or against it, so if you want to work against it, let me introduce you to politics.
Sounds like you do not understand spontaneous order. People are going to do what they want or feel they need to do to survive regardless of government policy. In the Soviet Union, people took to trading on the Black Market to get things, the government systems could not furnish. If you introduce a new tax, not all people are going to just pay it and give the government the revenue it expects. People will adjust themselves to avoid paying the tax or minimize the amount they have to pay. Markets may not answer what should be, but they will reflect what people want.
Ok smarty -- how does a society get out of a depression? By conjuring magic spells? Reading entrails of animals? Patience? Adam smith, ricardo, and the rest of his predecessors did not even consider depressions. Hayek is just an ideologue. Heck, Marx was a better economist and Marx was just a philosopher of history.
Lenin is said to have declared that the best way to destroy the capitalist system was to debauch the currency. By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some. The sight of this arbitrary rearrangement of riches strikes not only at security, but at confidence in the equity of the existing distribution of wealth. Those to whom the system brings windfalls, beyond their deserts and even beyond their expectations or desires, become ‘profiteers,’ who are the object of the hatred of the bourgeoisie, whom the inflationism has impoverished, not less than of the proletariat. As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.
Lenin was certainly right. There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.
John Maynard Keynes (1919)
DoMe Why do the libtards love George Soros?
+DoMe
Quote mining, pls, read the full paragraph, if not the whole chapter where this is taken from, and stop taking it out of context. Keynes was much more worried about the social instability that bad economic conditions will cause than Hayek or any of his spawn... Also, pls, point to a single full blow neoliberal reform that was done in a democratic fashion, anywhere in the world. I am genuinely interested...
Thank you so much for the upload!
:...he was very self assured....yet wrong."
Sounds exactly like today's progressive liberal democrat.
liberal and democrat are oxymorons....you can't be liberal and promote rise taxes and increase the size of the government to control every aspect of the citizen's life.
Hmmmm I gotta get the text out where in letters Hayak agreed with Keynes fundamentals but differs in the prescription for recovery.Here "Oh that Keynes...."
Keynes's insights were never accepted by mainstream economics. Instead they were substituted by the so called "Neo-Classical Synthesis": Hicks, Hansen, Viner, Samuleson, Krugman, etc, which contended that Keynes's ideas had only to do with restoring an economy after a depression, the rest was compatible with free market laissez faire. You'll want to read Keynes's reply to Jacob Viner in 1937 "The General Theory of Employment." Or read Dudley Dillard's essay "Keynes and the Institutionalist's."
Keynes did for economics what Darwin did for biology: he applied the methodology of science to the field whereas before it was only dogma and doctrine. Which is where he differs primarily with austrians who see economics as an "extreme a priorism"- Rothbard.
The Keynesian model is one that sees the world as a capitalistic, profit-motivated one with complex financial institutions and debt structures to finance capital assets. Not the barter paradigm of Leon Walras- the basis of the classical outlook.
He sees money as the essence and aim of the system and not a mere convenience as it is in classical economics- check out Wesley C Mitchell's 1916 essay "The role of money in economic theory" where he points out how previous economists took a very unrealistic approach by proposing that was money unimportant.
He realizes that under capitalism production is for profit, not for consumption or utility and thus capital theorists and marginal utilitarians are made irrelevant in regards to our current economy.
And he understands the importance of institutions in our economy (a fact which is altogether absent from classical economics where only individuals exist) especially the institution of banking and how they and not the government or the central bank are the creators of money- thus making the economy hostage to their state of mind.
watch?v=JBZWw1DG8zU (Ben Dyson explaining money creation under fractional reserve banking)
watch?v=J4Wsu_svOAc (Lord Adair Turner. You'll all profit to watch this!)
"But muh nooooo, only individual influence the market and the market is perfect and autoregulate everytime"
The problem for Hayek is that while he may have known of the 19th Century thinkers in economics, he didn't (apparently) know of the data of the 20th and 21st centuries on things, like, US M2 supply and consumer price inflation, and how there's almost no data correlating the two let alone establishing causality. If economics wants to be a serious science, it needs to be measurable and to be tested. Neither of these gentlemen were doing that, not with the rigor required. I'm not sure why people argue about Hayek and Keynes as if it applies to something like US monetary policy today. I'm not even sure it'll apply to Argentina today.
Keynes in one word "SPEND"
Oops, I forgot a comma.
Does 'the social elite' need to be plural as well in the same context? What about upper class? I am not making an argument one way or the other, I am merely curious if you feel this extends to similar terms in the same context.
It is a sentence. Just not a complete sentence. Much like this one and the one preceding it. These are grammatically erroneous fragmented or dependent sentences, called such as they rely on what proceeds or follows them to be complete thoughts.
Has there been any practical application of any of Hayek's economic theories because it seems the comment section is people flinging bananas at each other and no one giving valuable information on why Hayek works and Keynes does not. I only minored in Econ and from what I know, no such thing as a flawless economic theory. All economic theories have their flaws because at the forefront of it all is human behavior.
Hayek’s doesn’t work. Keynes’ did.
Making demand depends on long term, e.g. - panic buying vs products still available but now in excess due to demand a few months later (e.g. - 2020 toliet paper value).
Hayek my hero 🦸♂️ along with Thomas Sowell!
Lol
@@herbalagenda another sad 😢 lefty in the comment section lol 😂
Hayek, Friedman, laffer, sowell.
Lol funny
"RUclips is not one speech community like above examples so you WILL have to define your terms."
Of course. Which is why I did it. And he agreed that the definition I provided was sound. And then he proceeded to argue that it doesn't really mean that anymore.
The problem with the word "socialism" is that there aren't two competing precisely defined meanings. There's one precisely defined meaning (the one I gave) and then a bunch of vague usages which vary wildly.
So the critique is "How dare he come up with a good idea without having read all about the wrong ones?"
There was no good idea
Despite all this, his ideas and methods are far superior to anything the classical approach has to offer.
And neoliberalism has done wonders for the world hasn’t it?
Ideas like socialism and communism sound great to people who do not understand how economics works or how human psychology works. If they did, then they would see just how overly simplistic and impossible their ideas are.
What a load of nonsense. Keynes knew everything about Economic history and had studied it his whole life. His father was Economist John Neville Keynes for crying out loud. Hayek was an anti-intellectual and not an Economist because he didn't believe in applying mathematics. He engaged in the pop psychology of his day. He was ideological and did not assess, evaluate or predict outcomes with the same veracity as Keynes. Austrian economics. Classical liberal. We’d call it libertarian. He called it neoliberal, but the term has picked up different connotations. Like Mises, he was wrong. Keynes has been proven to be correct by the data.
Super interesting comments. There are many brilliant people who don’t have the desire to put time into learning the wide range of scholarship available. They’re too smart to study. That’s Keynes
Economics is an esoteric subject “when I taught it to him,he was surprised.....There are certain part of economics he was interested in”
Keynes was the Dane Cook of economics.
Keynes had the job of putting theory into practice. Never easy for theorists. As to the "thinking", and the speaking, I think Keynes succeeded, for a short time, in changing the terms in the debate: "public investment" instead of "government spending" and "inflationary spending". There is a difference. Like all investing, public investing can be done well or less well or downright badly. It's a bit too easy to just tut-tut and say "inflationary spending" is bad. Public investment, investment in the public good and in the common wealth, can be done and should be done. It has to be done well. Such that it produces positive future returns, which of course can be hard to quantify, though hardly impossible. Good publicly-owned roads can drive a ton of future private business and profit. Good universal healthcare can reduce sick days and boost the health of the economy. Good investment in scientific and medical and pharmaceutical R&D can (and does) drive innovation and invention (that patents on those inventions should be publicly-controlled at least in part is an important discussion to have).
Physics was actually a sideline for Isaac Newton, too. Newton was more fascinated with the occult and was too busy catching counterfeiters later in life.
Newton was built different. If he picked up a sword, swordsman centuries later would probably be reading about how he revolutionised the discipline.
So we are all suffering from a guy who didn’t even study economics?
he did, Hayek was lying
@@afgor1088 No he didn't, you are lying. And yes, we are all suffering from a guy whos main interest wasn't economics, it wasn't his thing and what we have is the result.
@@ScandinavianHeretic his main interest wasn't economics but then again newton's main interest wasn't calculus
He was eminently well read in economics and even got a professorship of economics at Oxford.
Far more than can be said for you, Derek, Mr or Hayek since what he studied was ideology not economics
@@afgor1088 That is just moving the goalpost to be about the potential in aperson's secondary interest, Keynes is not Newton but I can see why you'd like to compare him in this fashion.
To confuse the central point about the result, for how much someone read, when the necessary metric is how Well you know your subject, is to approach this in bad faith.
I find your proposal unsatisfying. What is more likely after all, that Hayek lied about a close friend whom he know almost a lifetime, went to his actual seminars, himself awarded for his ability in the field of economics, or, that you got it wrong due to your own bias.
I know what I see.
@@ScandinavianHeretic when did i ever say it was his main interest? go on point me to where i said that
also what bias? i'm no fan of kynes
goodbye, clearly you're too emotional to have a rational discussion with
Hayek>Keynes
+Monarchy KING Why?
Monarchy KING very true
Rothbard>Hayek>Keynes
He is fatter than Keynes? Get a job bro
Keynes was more than fortunate that his idea fitted and worked well under the conditions at that specific period of time. In other situations, however, it would be a different story.
It was convenient for governmrnts just to believe in Keynes's economics. And still is.
Your Keynes quote is a about history of economic thought. Which would have been known Marshall and the Cambridge set. So how does that counter Hayek's claim that Keynes's knowledge in economics was mostly confined to Marshall & Cambridge?
Como você pensa que o Keynes será classificado na história da teoria econômica ou do pensamento?
Como um homem com muitos grandes ideias mas que conhecia muito pouco de economia
Digo literalmente
Veja, ele não conhecia nada a não ser a economia marshaliana
Ele estava completamente inconsciente do que estava acontecendo em outros lugares
Ele mesmo conhecia muito pouco da história econômica do século XIX
Seus interesses eram guiados principalmente por atração estética
E ele odiava o século XIX
E portanto conhecia muito pouco sobre ele
Mesmo sobre sua literatura científica ele era realmente um grande especialista
Na Era Elizabethana
Eu estou absolutamente espantado
que você disse que John Maynard Keynes realmente não conhecia a literatura econômica
Muito pouco, muito pouco
Mesmo na tradição inglesa ele conhecia muito pouco dos
grandes escritores monetários do século XIX
Ele não conhecia nada sobre Henry Thornton
Ele conhecia um pouco sobre Ricardo, naturalmente as coisas mais famosas, mas
ele poderia ter encontrado um bom número de antecedentes de
suas ideias inflacionárias em 1820 e 1830,
e quando eu lhe falei sobre isso era tudo novo para ele
E como ele reagiu?
Ele ficou envergonhado? - Oh, não, nenhum pouco
Ele era muito seguro de si e convencido que
o que as outras pessoas poderiam ter dito sobre o assunto não era realmente importante
...
No fim... bem, não no fim, houve um período logo após ele ter escrito a Teoria Geral em que
ele estava tão convencido que ele tinha re-feito toda a ciência
que ele estava bastante desdenhoso sobre qualquer coisa que foi feita antes
E ele manteve essa confiança até o fim?
Eu não posso dizer, porque como eu disse antes, nós quase paramos de falar sobre economia
Muitos outros assuntos
Sua teoria geral das ideias e assim por diante estávamos
interessados
E você sabe
Eu não quero que você fique com a impressão que eu o subestimava
Como um cérebro ele era um dos homens mais inteligentes e mais originais
que eu já conhecia
Mas economia era apenas algo secundário pra ele
E ele tinha uma memória incrível
Ele era tinha um conhecimento tão extraordinariamente amplo
Mas economia não era realmente seu principal interesse - bem, sua própria economia
era que ele estava convencido que ele poderia recriar a disciplina
e ele tinha mais um desprezo pelos outros economistas
Isso se liga a seu ensaio
Sobre os Dois Tipos de Mente que você escreveu ao Encounter alguns anos atrás?
Bem, de forma bastante curiosa eu diria que Keynes estava mais para meu tipo de mente
e não o outro
Ele certamente não poderia ser descrito como um mestre em sua disciplina
o que descreve o outro tipo que ele era
um pensador intuitivo com
conhecimento muito amplo em muitos campos
que nunca sentiu que a economia era importante o suficiente para...
Ele tomou como certo que o livro-texto de Marshall
continha tudo que alguém precisa conhecer sobre o assunto
Havia uma certa arrogância
na economia de Cambridge sobre isso, e eles pensavam que eles eram o centro
do mundo e que se você conhecesse a economia de Cambridge não havia nada mais que valia a pena conhecer
Eu estou interessado em seu comentário anterior sobre o fato
de que ele é um homem com imensa inteligência
grande imaginação
conhecimento amplo e assim por diante
e ainda não era um economista, e não estou claro se você quer dizer
que ele não tinha o tipo de mente que sobressai em economia tal como
matemática, digo, você pode encontrar pessoas que são brilhantes mas que em matemática
são simplesmente sem solução
Mas você quer dizer que ele não tinha o tipo de mente que gera
economistas de primeira classe
Oh, ele tinha, se ele tivesse dedicado toda sua mente
à economia ele poderia ter se tornado
um mestre de economia
da bibliografia existente
Mas havia certas partes
da teoria econômica que ele
nunca se interessou
Ele nunca pensou sobre a teoria do capital
Ele era muito débil na teoria do comércio internacional
Ele era muito bem informado na teoria monetária contemporânea, mas mesmo aqui
ele não conhecia tais coisas como Henry Thornton ou Wicksell
E naturalmente, seu grande efeito era que ele não sabia ler em nenhuma língua estrangeira exceto o francês
Toda a literatura alemã era inacessível para ele
ele, de forma bastante curiosa, resenhou o livro de Mises sobre o dinheiro mas
depois admitindo que em alemão era só podia compreender o que ele já conhecia
O que ele sabia antes de ler o livro
Surprised this video isn't days long.
Keynes' knowledge of economics was vastly superior to that of Hayek. Deep down Hayek knew that Hayek had no understanding of money or how a monetary economy worked. Austrian School economics has no applicability to the real world. Shame JMK wasn't there to defend himself.
Define applicability
Keynes? you mean the guy who invested in the german mark during the Weimar Republic?.......yeah, I trust that guy anytime!
What I'm gleaning from this is that Keynes derived his popularity with the elites by telling them what they wanted to hear -- that it was okay to tinker with interest rates and inflationary policies and not to worry about consequences. My guess is, the other economists who came before him were more about telling the truth to the same elites, so they were a check on their impulses and passions. What Hayek is saying here is that Keynes was not all that studied on the subject as he and their other contemporaries were. He was brilliant on other subjects and on his limited range in economics.
if people only heeded hayeks warning we wouldn't be even close to our nightmare that is today
Another major shortcoming of Keynes's analysis is related to Hayek's criticism that Keynes had not studied the 19th century political economists. Had Keynes read Henry George, perhaps he would have grasped the significance of land markets as a primary driver of economic cycles. It takes no deep study to understand that land markets are speculation-driven and highly unstable. Add cheap and easy credit to the mix and the recipe is ripe for not simply a periodic correction but a major financial collapse and economic crisis.
And, still, so many countries follow what that guy said. We deserve the shit government do. #TaxationIsTheft
Property is theft too.
I worded that poorly. And you are right. They accept them in the current system. They believe the proposed system would be relieved of any market failures, since government intervention would be subsided.
Hayek trash talking, I love it!
Most people in this comments section couldn't draw a Keynesian LRAS curve or describe what Keynes theory stated or meant.
Marx ≠ Marxism, Keynes ≠ Keynesianism.....
Robert Koch Right, but those are the natural consequences of their philosophies.
Not true, the austrian school doesn't believe in market failures, in fact they say the market failures exist because of interventionism