Saturday, October 24, 2015

When Friedman Readily Admitted He Didn't Understand Hayek's 'Prices and Production'

The Milton Friedman Austrian hate series continues. From the interview with Lanny Ebenstein, as reported in Chicagonomics:
I think his [Hayek's] capital theory book is unreadable, I cannot say I've read it. [laughter] It's very unreadable...I never could understand why they were so impressed  [at the London School of Economics] with the lectures that ended up as Prices and Production and I still can't.

From the book blurb:
Hayek was not only a leading champion of liberty in the 20th century. As this massive book reveals, he was also a great economist whose elaboration on monetary theory and the business cycle made him the leading foe of Keynesian theory and policy in the English-speaking world. Here are collected his most important works on these topics: re-typeset, indexed for the first time, and beautifully bound in a 536- page hardbound book for the ages. These works have been tragically out of print for many years. Together they constitute a complete presentation of Hayekian money and business cycle theory. Even more, they work together as an excellent elucidation of Austrian macroeconomic theory, which is why this book has already been adopted in some classrooms. The timing could not be better. The entire world economy is now suffering from the effects of bad monetary policy, and with results that Hayek explains in great detail. With "counter-cyclical" policy again revealed as unworkable, and while the politicians plot to make matters worse, the contents of this book has direct bearing on present and future of monetary policy. Hayek was barely out of his twenties in 1929 when he published the German versions of the first two works in this collection, Monetary Theory and the Trade Cycle and The Paradox of Saving." The latter article was a long essay that was to become the core of his celebrated book and the third work in this volume, Prices and Production, the publication of which two years later made him a world-renowned economist by the age of thirty-two...