Hayek and Keynes were personal friends but intellectual rivals. Keynes was a brilliant, unconventional Englishman. Hayek was an outspoken émigré from ravaged Austria. Their economic views have changed, shaped and dictated the way we understand economics and economy, state's role in the economy and state's economic policies, once and for all. (Keynes' name is frequently mispronounced; so is mine too. Do you know how to pronounce my name? :-))
Adam Smith is a father of modern economics, but it is Keynes who invented macroeconomics. John Maynard Keynes published his The General Theory (we can also read the whole book at the Google-books), a brilliant analysis of how to fight the Depression, In 1936. That book made him the most influential economist of the age. Keynes advices governments that it was possible to manage their economies. (Nobel Laurate and also the most famous Keynesian, Paul Krugman wrote an introduction to Keynes' General Theory. I will write a short note about it later. It is an important paper).
Curiously, Hayek did not write any reviews or any counter argument on The General Theory. Bruce Caldwell, Professor at Economics Department of Bryan School, North Carolina University, wrote a (free down-loadable) paper entitled “Why didn’t Hayek review Keynes’s General Theory?” in History of Political Economy, 30:4, 1998. I will also write a short note of it later. But we have to remember that working slowing and taking time is Hayek's nature; had he died young I believe he would definitely not get a Nobel prize (it takes very long time to get his view and theory understood, accepted and appreciated). If Keynes lived long, I believe he will definitely get a Nobel prize, probably not only one, but two; one for his economic theory and another one for his literary works (like Winston Churchill).
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| Image from http://www.betterworldbooks.com/the-general-theory-of-employment-interest-and-money-id-9650060251.aspx |
Curiously, Hayek did not write any reviews or any counter argument on The General Theory. Bruce Caldwell, Professor at Economics Department of Bryan School, North Carolina University, wrote a (free down-loadable) paper entitled “Why didn’t Hayek review Keynes’s General Theory?” in History of Political Economy, 30:4, 1998. I will also write a short note of it later. But we have to remember that working slowing and taking time is Hayek's nature; had he died young I believe he would definitely not get a Nobel prize (it takes very long time to get his view and theory understood, accepted and appreciated). If Keynes lived long, I believe he will definitely get a Nobel prize, probably not only one, but two; one for his economic theory and another one for his literary works (like Winston Churchill).
He invented concepts we take for granted today, like gross domestic product (GDP), the level of unemployment, the rate of inflation, all to do with general features of the economy. Moreover, he also initiated, organised and established the IMF and the World Bank. Keynes did not have long to live. Ill and overworked, his health gave way. When he died in 1946 at 62 (in fact he was not so young, according to the standard of our developing economies), Keynes was raised to sainthood.
Oh, Great Keynes, your contribution to the humanity is invaluable, much more greater than the values of all Kings, Queens, Princes, Princesses, all royal families combined together. What did these so-called majesty do for the humanity; they just colonized, bullied, attacked, annexed invaded, stole, looted almost all nations around the world, and exploited, tortured, imprisoned and assassinated countless national heroes, great leaders and freedom fighters of many nations. (I know my discussion was digressed now.)
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| Look at how they were behaving like children, they were so cheerful and carefree. I like their hats. Image from http://tek.bke.hu/keynes120/foto/keynes/keynes_russell.jpg |
On the other hand, Hayek thought government interference in the economy was a threat to freedom. Hayek always rejected macroeconomics. He rejected any government intervention during the Great Depression itself. He feared that Keynes's brave new world was a big step in the wrong direction. In 1944 he published The Road to Serfdom that is about Hayek's ideas of freedom and competitive enterprise and opposition to any state's planning and controls in the economy. (There is also a (free downloable) condensed version of it appeared in the Reader’s Digest April 1945 edition, an illustrated version of it is also included at that book.) His ideas were at that time shunned by the academic world. Most of the university departments disliked him, and economists treated him as an outsider. No universities wanted to hire him, except the Chicago School.
He won the Nobel Prize for economics in 1974. Unlike Keynes, Hayek lived a very long life, and died in 1992 at the age of 92. (Look at the interesting numbers; 1992, at the age of 92.)
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| Image from http://www.bibliovault.org/thumbs/978-0-226-32061-8-frontcover.jpg |
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| Look at how serious Hayek was, he did not smile, and was so thoughful. I don't like that class, it's too conservative; the class had only two women (perhaps just one woman). Image from http://thinkmarkets.files.wordpress.com/2011/05/hayek1.jpg |
(I will talk about them later; these two are so brilliants, two of the most important persons in the economics, and also the most important persons who influence my intellectual life. There are too much to talk about these two monsters; we can write series of books about them.)
Myo
(17 June 2011, Friday. 6:31 p.m.)
Note: I haven't written any posts these days, because I have been too busy with my study. This one is an old one that I have written long time ago. I am going to give references, to make it more academic and also include some photos of Keynes and Hayek, with a couple of their books. Both of them are so important for us.
