Another Keynes & Hayek Open-Thread

“In my opinion it is a grand book…. Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.” ~ Keynes on Hayek’s “Road to Serfdom”

See also: Karl Smith.

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24 thoughts on “Another Keynes & Hayek Open-Thread

  1. I’ve always loved this quote, and every time I see it, I find a new reason to fall in love with it.

    Today’s reason: it shows just how different the times were. Nowadays, their disciples generally act as if they’re at opposite extremes of the political spectrum. And in any analysis of mainstream political thought, they are in fact more or less at opposite ends of the spectrum. Then? Not so much. That spectrum just ain’t what it was.

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    • Its definitely changed. When Keynes and Hayek were writing, it was respectable to advocate a centrally planned economy under a democratic government. While Keynes didn’t advocate any such thing, Hayek thought his political prescriptions would provide too much scope for it.

      However, while Hayek represented the least interventionist position that was respectable then, there are people now who hold even less interventionist ones. Hayek was quite at ease with state-provided services and safety nets, provided they didn’t interfere with the coordinating role of prices.

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      • Nor can certain harmful effects of deforestation, or of some methods of farming, or of the smoke and noise of factories, be confined to the owner of the property in question or to those who are willing to submit to the damage for an agreed compensation. In such instances we must find some substitute for the regulation by the price mechanism. But the fact that we have to resort to the substitution of direct regulation by authority where the conditions for the proper working of competition cannot be created, does not prove that we should suppress competition where it can be made to function.

        F. Hayek, from Road to Serfdom.

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        • I’m definitely a libertarian of a Hayekian stripe. I’m OK with welfare (I have some bones to pick on specific points, but I don’t want to tear down the whole edifice) and if there are real market failures, I support government action tailored to correct those failures if it passes basic tests of good quality policy.

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          • Yeah, exactly. I keep maundering on playing my Symphony for Single Cymbal here: welfare needs to demonstrate positive results: if at the end of all the addition and subtraction we’re not getting the desired results, hard questions must be asked and changes made. It’s an ongoing process and we must not tolerate excuses. Sometimes it’s just easier to start over: no point putting new wine in old wineskins.

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          • Indeed. I think this is almost the centre line of present-day politics, at least in the anglosphere. Where the consenus breaks down is on one exactly constitutes a market failure and what degree of collateral damage is acceptable in government attempts to correct them.

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            • I don’t want to understate my disagreements with the left. My conception of the proper role for government would result in the state doing a lot less, whether you’re talking about your government or mine (though I’m happier with mine than yours on the whole).

              I’m a critic of government, but ultimately I’m one of the Loyal Opposition. I want to hold the government to the fire because I care about whether its working or not, and where is isn’t working I want to fix it.

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              • Well, let’s not confuse the Left of yore with today’s exponents: the Left is not entirely devoid of common sense. LBJ thought he could legislate away poverty: we know that’s impossible today. The Left wants government to work, in all the senses of that word: nobody is sicker of ineffective bureaucracies than we are. I think all social welfare programs should have sunset provisions attached, otherwise these goddamn agencies turn into Institutions, more interested in self-preservation than actually doing their jobs.

                Some of the Greek states used to routinely put their leadership on trial at the end of their terms. That might be a great idea for these agency heads. We need results, not more of this cheap talk about Oh Those Poor Children, as if anyone who dares to question the efficacy of these schemes is a heartless bastard.

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                • Yes, I shouldn’t overstate my differences with the left either. Actual socialism is no longer advocated by the mainstream left, which puts us much closer together than in times past.

                  I think one of the reasons I spend more time arguing with liberals than conservatives is that I feel with liberals we both have a similar view of what good government is, our disagreements are about mechanisms. With conservatives, I don’t think we share even basic premises which makes debate kinda pointless.

                  And I totally agree about monitoring and evaluation of welfare programmes (of all programmes in fact). I push for this whenever I can in my own Department. It’s tragically underdone in government, with monitoring and evaluation frameworks often created as an afterthought, if at all.

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