Saturday, February 6, 2010

Austrian Economics -vs- John M. Keynes and Deficit Spending

The stark differences  between economists Friedrich A. Hayek and John M. Keynes is accurately depicted in the following video that will follow. Unfortunately for American society the Keynesian view of deficit spending won the day.

Hayek, a brilliant and studied economic theorist never was afforded the stage Keynes so successfully captured. The results being the more rational economic theories lost the day, and to  the detriment of American society as a whole.

Here are some brief excerpts from the Ludwig von Mises Institute.:

The debate between J.M. Keynes and F.A. Hayek, both living and teaching in Britain in the 1930s, was one of the great debates of the century. Sadly, the charming globetrotter Keynes had the podium and the audience, to the point of influencing policy the world over even to the present day

As with the classical music show on public radio that takes apart a symphony to explain "why it is great," I want to explain why this video is great.
The video opens with Keynes and Hayek standing at the front desk of a hotel, both in town for the "World Economic Summit." The clerk dotes on Keynes, treating him like the star he is. Keynes arrogantly announces that he needs no agenda because he is the agenda. Meanwhile, Hayek humbly notes his presence. The person behind the desk has never heard of him. This captures the ethos of the 1930s to the present: the world-famous Keynes vs. the unknown Austrians.
It's all true to life: a number of students report having sent this video to their economics professors, who report back that before seeing this, they had never heard of Hayek.
Meanwhile, the character depiction is fantastic in this video. Keynes is popular and beloved by all, promoting a high lifestyle, parties, and living it up — the future be damned. Hayek's personality here is more intellectual, sober, and even a bit puritanical, with a focus on reality and the long-term good.
It is recommended that before viewing the video you follow the link here to read the rest of the article on Hayek vs Keynes.
Via: Ludwig von Mises Institute

1 comment:

  1. funny, we both post on the same thing at same time here. lol

    your post a little more direct in the theories while mine was in line of today's problems.


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