The opening introduction by Levin seems to me to be an incredible exaggeration of Hayek’s importance, but anyway some other comments also occur:
(1) What strikes me, above all, is that Hayek just sounds like a mainstream neoclassical in his emphasis on the role of prices: what is this but the Walrasian neoclassical view of an economy with a market-clearing price vector that converges to general equilibrium? In other writings at this stage of his career, Hayek was expressing a disillusionment with general equilibrium theory, yet here he just repeats that same tired old neoclassical equilibrium myths.
(2) This interview was conducted in the early years of Thatcher (Prime Minister of the UK from 1979–1990), who appealed to Hayek as one of her economic influences, though in practice her policy owed more to monetarism than Austrian economics.
(3) Hayek’s prescription of high unemployment and bankruptcy as a solution to stagflation evokes the worst nonsense of his liquidationism.
(4) Hayek’s discussion of his conception of liberty (from 19.00) is of some interest.
(5) Some of my posts relevant to this interview:“Hayek on the Flaws and Irrelevance of his Trade Cycle Theory,” June 29, 2011.
“Did Hayek Advocate Public Works in a Depression?,” September 25, 2011.
“Hayek and the Concept of Equilibrium,” September 20, 2011.
On Hayek's work on knowledge...you could have criticised Hayek's "Use of Knowledge" paper by making reference to Dr. Michael Emmett Brady's paper that compares and contrasts Hayek's approach to uncertainty with Keynes's approach to uncertainty.
ReplyDeletehttp://papers.ssrn.com/sol3/papers.cfm?abstract_id=1751569
Otherwise Lord Keynes, I will agree with you that Austrian economists seem to end up with similar policy implications with neoclassical economists.
(One has to distinguish between the various strands of Classical thought, however. There's Ricardian economics, Marxian economics, Malthusian economics, Marshallian economics, et cetera.)
I don't see how this resembles 'Walrasian neoclassical' views of markets. What he's saying is entirely consistent with his own approach regarding information and signals, whereas Walrasian equilibrium is essentially just a bit of mathematics. There are many many arguments for the efficiency of the price mechanism, it doesn't have to involve Walrasian mathematics. His arguments are qualitative and philosophical, Walrasian economics on the other hand is quantitative.
ReplyDeleteThatcher's policies were monetarist, but she got into politics after reading Hayek's great piece of agitprop "The Road to Serfdom". The whole story can be found in this series:
ReplyDeletehttp://www.youtube.com/watch?v=NNRO82QMJwQ
Comment: "Socialism is the attempt to discredit all morals and then create new morals..."
Good God. Hayek was a crank through and through. He always wanted to be a priest, didn't he? He claimed to love freedom and liberty -- but implicitly he was just a pamphleteer handing out cheap moralistic tat. That's all he'll ever be too. A cheap charlatan posing as an economist -- but flogging his wares to half-baked idiots like Thatcher and the IEA.
What was it he called them? Second-hand peddlers in ideas? Oh, here was a thoroughly self-conscious propagandist -- a priest through and through.
And like Mises, the commitment to "liberty" went out the door at certain times too:
Deletehttp://socialdemocracy21stcentury.blogspot.com/2012/07/hayek-and-pinochet-endless-love.html
And while we're on the subject, Hayek - like Keynes - had some ugly prejudices too:
Deletehttp://socialdemocracy21stcentury.blogspot.com/2012/01/hayek-ethnic-bigot-and-perils-of-ad.html
Yuck. I'd never seen his comments on this before. Calling Pinochet a "liberal dictator" after he had trade unionists rounded up, tortured, forced to have sex with animals and then thrown out of helicopters, shows that von Hayek had a very strange understanding of what the word "liberal" means.
DeleteScratch an anarcho-capitalist and you'll find a fascist. Like any extremist political philosophy, it's prone to authoritarianism despite its outward calls for freedom.
'Scratch an anarchy-capitalist and you'll find a fascist'.Hayek wasn't an anarcho-capitalist so what are you talking about?
ReplyDeleteThey're all the same to me. I'm loathe to call Hayek a "classic liberal" which, I'm aware, is what he liked to be referred to as. It's a complete bastardisation of the term.
DeleteHow about this: scratch a modern-day Austrian and you'll find a fascist in the making. Better?
@Lord Keynes "yet here he just repeats that same tired old neoclassical equilibrium myths" Britonomist is right. And the market process view is present here when he talks about not being able reverse the signal. Which is the key point Hayek took from the socialist calculation debate & leads to his thinking in terms of markets as a forward looking entrepreneurial discovery procedure. (which is hardly simultaneous Walrasian general equilibrium).
ReplyDelete@Philip Pilkington
"Socialism is the attempt to discredit all morals and then create new morals"
Moralistic? Hardly. He is talking about the kinds of moral rules that are required to for a functioning market order vs that of a completely communal society like that of a primitive tribes, & the inbuilt propensity for humanity to prefer the latter. For Hayek morals were a functional part of society & evolves with it. He had no inherent attachment to any particular moral conception in the same way a Christian or Objectivist might.
Hayek's ethics were system/indirect utilitarianism. Which only allowed moral judgements on the most general level because the knowledge problem rendered other types of utilitarianism useless.
Which is where Pinochet comes in. For Hayek & Mises the question is not about short term abuses but about the results of long term political economy when faced with limited & non ideal choices. There is no contradiction between Hayek's supporting a dictator & his commitment to liberty & progress. In fact it is his commitment to those values that would have made him make that choice.
"Scratch an anarcho-capitalist" Lol Hayek an 'anarcho capitalist'? Pull the other one.
"Moralistic? Hardly. He is talking about the kinds of MORAL RULES that are required to for a functioning market order vs that of a completely communal society like that of a primitive tribes, & the inbuilt propensity for humanity to prefer the latter." (My emphasis)
DeleteYes, you're right he was talking about certain moral rules that he thought dictated the "good society". Hayek was obsessed with this. He was a moralist and a priest.
It's hilarious that you say "Moralist? Hardly" and then go on to discuss "moral rules". You Austrians are priests, you talk about priestly stuff -- quite explicitly -- and then you repress it in your own minds and claim that talking about, for example, "moral rules" is not "moralistic". It's fascinating -- from a purely psychological point of view. The mechanisms are the same as any religion. They equate their position with "Truth" and so they are not "preaching", but merely spreading the "Good Word".
"There is no contradiction between Hayek's supporting a dictator & his commitment to liberty & progress. In fact it is his commitment to those values that would have made him make that choice."
Yep. I know. That's what makes them fascists in disguise. Lenin used to reason the same way. The repression under the "dictatorship of the proletariat" was only to be temporary. Communist freedom was just around the corner.
Again, your blind spot allows you to avoid what you are actually supporting by looking into an imagined future. Fascinating -- from a psychological perspective. All sorts of horrors could be justified and for an indefinite period of time, as you claim that freedom is "nearly here". This is the essence of the authoritarian mind. I've always seen it in the Austrians. They're just upside-down Marxists without a proletariat.
Now, back to sleep friend.
Marx's dictatorship of the proletariat was the Paris commune not post revolutionary Russia. So Marxists are not up side down propertarians.
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