Thursday, December 25, 2008

Hayek on Keynes

Here's a great audio clip from the old William F. Buckley show, Firing Line, when Buckley had Nobel Prize winning economist Friedrich Hayek as his guest.

In this clip, Hayek discusses Keynes and Keynesianism, and makes the charge that Keynes did not know that much economics outside of the Cambridge school and that Keynes' General Theory was really no such thing, but rather a theory suited only for a very specific time period in England, when prices dropped but wages stayed up.

Hayek sometime after Keynes had written the General Theory said to Keynes, whom he knew well, that Keynes' disciples were getting much too inflationary because of the General Theory and Keynes replied that if things got out of hand he would write another book and change public opinion. It never happened as Keynes died six months Hayek's talk with him about it.

(Via Bob Murphy)

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