It's the follow up to this:
Sure, the deck's stacked against Keynes in these videos but it basically explains both theories pretty decently. I tend to prefer Hayek intuitively because his theories of knowledge, spontaneous organization and the tactics of power jibes with my experiences and supports my views on the importance of individual liberties. I think the free-er we are the better off we are; but being free doesn't come free and in fact it's a harder life than one spent encompassed in a safety blanket that other people pay for and still other people manage. One of my in-laws is like this; she's been on the dole in England for roughly 30 years. Recent changes - they've run out of money for health care and the dole - have forced a lot of people to work. Sis-in-law, mortified, reports this week that her doctor has given her a clean bill of health. Most people would like that but for her, it wiped out her last claim to drawing pay out of the public till, a fraudulent disability check that she (as of next week) will no longer collect. (See, that's the problem when your doctor is a government employee, he operates according to government spending rules, and as of now, diabetes and idleness-induced carpal tunnel syndrome are no longer paying disabilities - damn those Tories and Lib Dems!) She now has to get her first job, at age 47. She is horrified about this, not realizing that actually earning money will leave her free to do things. She won't have to get permission to move from one state housing development to another. She won't need to use her money only to buy certain things on an approved list. She won't have to go to an office once every couple months and beg a government representative to keep subsidizing her. It will be hard for her, but maybe in a couple years, she'll realize that enslavement to personal responsibility - being a servant of one's self - means freedom from enslavement to others. The police won't arrest her if unauthorized people show up and stay in her house for a couple days - like one of her sons or her ex-husband. She wont be getting an endless, implicit lecture on how she is required to live delivered by a handful of entitlement benefits that come with strings attached. She will be free to choose her own course. This prospect is, of course, terrifying to her. It shouldn't be, but the extensive benefits she has received for her entire adult life have induced this infantile state of mind.
People often conflate "small l" libertarianism with Ayn Rand's paean to selfishness, objectivism. It isn't the same thing; Rand provides an infantile, convenient straw men for statists to skewer. Hayek isn't easily skewered, particularly in his advanced works, like Constitution of Liberty. He makes a critique of power and attempts to centrally plan the "economy" (i.e. humans and all their significant actions) that is based in part on his personal views as an Austrian Jew who escaped the Holocaust; and as an economist who saw informational advantage as a key to making markets work, and saw price as a mechanism by which information is adjusted and spread, while central control works as an obstacle to the sharing and employment of information. As the theme goes in the first video, who knows better how to run your life - you, or some distant person? As you guys know, I just want to be free, to ride my machine and not be hassled by the man. So natch I cling to the political economics that best support my inclinations. But then I'm a weirdo geeked out civil liberties attorney so I may be completely wrong, and YMMV. I'm throwing this stuff out there because I think the country's in a crisis, and it behooves us to try to educate ourselves about the mechanics of it, whether we're civic minded and paying attention to what government's up to, or just self-interested and trying to stay a step ahead of the jailer. You may not agree with me but it would probably serve you to understand at a fundamental level what the stakes are when pundits are talking about government takeovers of economic sectors, or deregulation of other sectors. So don't believe me or the videos. Go read the two authors whose ideas are at the heart of the controversy and make up your own damn mind.
If you sat through that stuff, and better yet if you understood it, you deserve a little non-economical non-polemical music as consolation.
And, in the interest of equal time for opposing viewpoints, RATM.
Now have some mellow, and go away for a while. Okay?
6 comments:
Holy crap I enjoyed that. I've got two friends, both brilliant, one a mathematician and now mutual fund manager, the other a lawyer and now chief counsel to a federal environmental watchdog agency, who I witness fight this battle daily to a draw. The first likes the Austrian school; the latter, the other. In the end, I prefer this presentation through rap. Thanks for sharin.
Road to Serfdom is on the night table. Most likely start it in coming week. I'll be peppering you with questions on the next ride.
I will read at least two of those. May I recommend "The Scheme for Full Employment" by Magnus Mills, which is a nice, fictional satire on capitalism.
May I submit that it's not an either/or situation? For instance, if we went to single payer healthcare system, what impact would that have on entrepreneurship if the "I don't want to lose my benefits" crowd suddenly didn't have that standing in the way of bringing their good ideas to market? A little Keynes, a little Hayek, a little more growth, a little more GDP. Both camps would and reasonably could claim credit.
TS - glad you liked.
JK - sure, we can talk. But the faster you go, the stupider I'll get.
Dr. Brett - good on you to do the reading. When people don't... it's evident to people who did do the reading.
SBJ - I agree with you that in the fine points you can mix things up a bit and that neither party is entirely right. Hayek admitted as much when he concede that at least a minimal social safety net is required because that's what a decent society does - no quantitative justifications there, and he sounds downright Christian/Fabian. But when there's a battle of major premises you can't really split the difference. Hayek's problem with Keynes is as much about the political economics as about the pure economics; he'd point out that the market gets warped when the end user can't work the price (and buy/no-buy) mechanism to participate in the market, and that in general the aggregation of information and decision-making power in a central government (which is what will happen if Uncle Sam is picking up the tab) is inefficient and inexorably leads to abusive situations, whether the result of callousness, or the simple information disadvantage of the central government actor. It is a bit of an apples and oranges comparison; Keynes doesn't match up well on the political economics point. Otherwise I think you make a pretty good argument about a blended approach (e.g. fed Pump Priming can be really helpful, and even Hayek would admit that), just it probably doesn't work in the health care example where the premises about information and markets are stacked up against each other very directly.
But people tend to make dumb decisions...
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