Fight of the Century: Keynes vs. Hayek Round Two
“Fight of the Century” is the new economics hip-hop music video by John Papola and Russ Roberts at http://EconStories.tv.
According to the National Bureau of Economic Research, the Great Recession ended almost two years ago, in the summer of 2009. Yet we’re all uneasy. Job growth has been disappointing. The recovery seems fragile. Where should we head from here? Is that question even meaningful? Can the government steer the economy or have past attempts helped create the mess we’re still in?
In “Fight of the Century”, Keynes and Hayek weigh in on these central questions. Do we need more government spending or less? What’s the evidence that government spending promotes prosperity in troubled times? Can war or natural disasters paradoxically be good for an economy in a slump? Should more spending come from the top down or from the bottom up? What are the ultimate sources of prosperity?
Keynes and Hayek never agreed on the answers to these questions and they still don’t. Let’s listen to the greats. See Keynes and Hayek throwing down in “Fight of the Century”!
Tweet
Facebook
Reddit
Digg this!
April 28th, 2011 at 8:01 am
[...] Fight of the Century: Keynes vs. Hayek Round Two [...]
April 28th, 2011 at 8:20 am
“A reflective, often biting, commentary on the nature of our society and its dominant thought by one who is passionately opposed to the coercion of human beings by the arbitrary will of others, who puts liberty above welfare and is sanguine that greater welfare will thereby ensue.”—Sidney Hook, New York Times Book Review
In this classic work Hayek restates the ideals of freedom that he believes have guided, and must continue to guide, the growth of Western civilization. Hayek’s book, first published in 1960, urges us to clarify our beliefs in today’s struggle of political ideologies.
The Constitution of Liberty
Hayek gives the main arguments for the free-market case and presents his manifesto on the “errors of socialism.” Hayek argues that socialism has, from its origins, been mistaken on factual, and even on logical, grounds and that its repeated failures in the many different practical applications of socialist ideas that this century has witnessed were the direct outcome of these errors. He labels as the “fatal conceit” the idea that “man is able to shape the world around him according to his wishes.”
“The achievement of The Fatal Conceit is that it freshly shows why socialism must be refuted rather than merely dismissed—then refutes it again.”—David R. Henderson, Fortune.
“Fascinating. . . . The energy and precision with which Mr. Hayek sweeps away his opposition is impressive.”—Edward H. Crane, Wall Street Journal
The Fatal Conceit: The Errors of Socialism (The Collected Works of F. A. Hayek)
Hayek’s Page @ AMZN
and, just, to mix metaphors… “Three Strikes”, JMK, and the band of merry Totalitarians that have used him as a ‘beard’, should have been ‘Called Out’ .. long ago…
April 28th, 2011 at 10:43 am
Sublime educational video.
Wonder if Sal Khan will us it.
April 28th, 2011 at 12:44 pm
wow – that was good .. really good
(I’d cut the latex glove scene) almost turned it off then & there
but -
thanks for sharing .. I suppose I should get out more and search the www
…
MarkEH – one of the link to link to links yesterday got me reading the below article – and thus pondering overday&nite this very videos aspects .. I’m still pondering where things need to go to save us from war -/- because we don’t share well -/- and yet still have the spirit & drive all animals need (I guess)
http://en.wikipedia.org/wiki/Collectivization_in_the_Soviet_Union
April 28th, 2011 at 1:15 pm
loved it. my high school daughter just approached me 2 days ago asking me my opinion on the stimulus package. she was working on an assignment for one of her classes. i asked her if she wants my 90 second off the cuff version, or the 90 minute keynes/hayek debate. she opted for the former. i landed somewhere in between. i just sent her this.
greg0658, i just read somewhere that the guard with the glove is a professor of econ at duke:
http://econ.duke.edu/people?subpage=profile&Gurl=%2Faas%2FEconomics&Uil=michael.munger
April 28th, 2011 at 1:24 pm
Both are right and both are wrong.
Neither one is, nor will ever be, a clear “winner”.
Demand side economics did seem to result in excessive inflation in the 1097s, but that was conflated with other factors, such as the demographics of the time, and the rise of OPEC, so it is difficult to clearly ascribe causality. And, of course, that demand side experiment ended with the Reagan Revolution.
Supply side / free-market economics, which took the helm along with Reagan in 1981, resulted in a financial collapse and deflation in 2008. But that was prevented from reaching its endpoint by emergency government intervention. Had it been allowed to fully collapse, as would have been consistent with a truly free-market economy, then we might have had a clearer indication of which was the greater evil. But as it is, we will never know.
We will never know because we have always had, at least since the GD, a mixed economy containing characteristics of both free-market capitalism and socialism. One could argue, as I do, that this is as it should be. We need both, to adhere to one exclusively leads to imbalances in the economy which are inevitably unsustainable. We saw the evidence of this in the 1970’s and now.
.
“However great an evil immorality may be, we must not forget that it is not without its beneficial consequences. It is only through extremes that men can arrive at the middle path of wisdom and virtue.”
Wilhelm von Humboldt
“One foot isn’t enough to walk with.”
Egyptian Proverbs found in the temples of Luxor.
.
Excellent video, btw. And very encouraging to see such intelligence being applied in this context. Hope it goes viral!
April 28th, 2011 at 1:49 pm
also, love the line as hayek comes away from the room where he was presumedly searched (after saying ‘hayek, as in high explosives’), and keynes ribs him by saying that he ‘ must have taken a detour on the road to serfdom’.
i wish my econ classes had been this entertaining.
April 28th, 2011 at 2:38 pm
Yes.
There is more than one way to cook a chicken and there are reasons why cars don’t drive on one gear.
April 28th, 2011 at 3:18 pm
The problem is this fake wall set between individual spending on self-indulgence vs the collective spending on societal needs. From an economic point there are no inherent advantage on GDP or growth from private spending compared to public spending. Within each sector there are completely useless (or destructive) spending as well as very economically stimulating spending. But from the economic growth point of view it makes no difference if you spend 2 million to build an extra bedroom onto 100 individuals homes or you tax that money away from these same individuals and spend 2 million to build a bridge that will allow them to get across a river to drive to a nearby town. Both are construction spending and very stimulating to the economy.
The selfish individual wants everything spend on their own personal indulgencies and nothing spend on societal needs (because at best (s)he gets only a fraction of the benefits from that) – at least until they face a situation where they need societal service. That is why right wingers only want public spending on police, jails and military – they want the freedom to predate on other weaker individuals but demand societal protection from those that would predate on them.
Trickle down supply side economics has been discredited with real life experiments multiple times and has no theoretical foundation. In modern efficient production there is no such thing as producing “on faith” without having secured the presence of sufficient costumers that will purchase the product. So the idea that taxcuts to the rich and big corporations would get them to start building factories and employ more people, is completely absurd in the first place.
April 30th, 2011 at 7:02 am
this video and the situation it hashes has me pingponging it .. “the it isn’t an engine its organic” .. anyway I found the creator on Facebook and saw another link to its discussion on Fox with The Judge:
http://video.foxbusiness.com/#/v/4670184/the-hayek-keynes-battle-rap-continues/?playlist_id=87185
so I have to say to that:
war destroys wealth :-| ya but war creates need in a world already built to satisfaction .. population growth and its needs can’t get economies to euphoria alone … that said I need to be clear I’m for a new solution not more war …
back to TBP …
TBTF is Collectivization redux sorta .. resources in hands that do not feel the original intent of its need .. TBTF only need the chips in the corner to get bigger .. because that is the game as stated (correct?)