Economics

Una nueva contienda entre Keynes y Hayek

Aug 19, 2011 Robert Skidelsky

LONDRES - El economista austriaco Friedrich von Hayek, que murió en 1992 a la edad de 93 años, dijo una vez que quien desee tener la última palabra sólo tiene que sobrevivir a sus oponentes. Su gran fortuna fue sobrevivir a Keynes por casi 50 años, y por tanto reclamar una victoria póstuma sobre un rival que lo había embestido intelectualmente cuando estaba vivo

La apoteosis de Hayek ocurrió en la década de 1980, cuando la primera ministro británica Margaret Thatcher llegó a citar Camino de servidumbre (1944), su ataque clásico a la planificación central. Sin embargo, en economía nunca hay sentencias definitivas. Si bien la defensa de Hayek del sistema de mercado contra la ineficiencia de la planificación central fue ganando cada vez más partidarios, la opinión de Keynes de que los sistemas de mercado requieren una estabilización continua persistió en los ministerios de finanzas y bancos centrales.

Sin embargo, ambas tradiciones fueron eclipsados por la escuela de Chicago de "expectativas racionales", que ha prevalecido en la economía dominante en los últimos veinticinco años. Si los agentes económicos supuestamente poseen información perfecta sobre todas las contingencias posibles, nunca podrían suceder crisis del sistema, excepto como resultado de accidentes y sorpresas más allá del alcance de la teoría económica.

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Robert Skidelsky

Writing for PS since 2003
208 Commentaries

Robert Skidelsky, a member of the British House of Lords and Professor Emeritus of Political Economy at Warwick University, was a non-executive director of the private Russian oil company PJSC Russneft from 2016 to 2021. The author of a three-volume biography of John Maynard Keynes, he began his political career in the Labour party, became the Conservative Party’s spokesman for Treasury affairs in the House of Lords, and was eventually forced out of the Conservative Party for his opposition to NATO’s intervention in Kosovo in 1999.

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Kevin Remillard Jun 1, 2013

The Skidelsky statement: “global economic collapse of 2007-2008 discredited ‘rational expectations’ economics (though its high priests have yet to recognize this) and brought both Keynes and Hayek back into posthumous contention” is false. When you concentrate risk with liquidity instruments and a reduction in exposure to capital markets with syndication you get collapse. Ludwig von Mises is unread by Mr. Skidelsky?
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Jonathan Lam Apr 3, 2013

Gamesmith94134: Dr. Doom Warns Wall Street and Washington---- Heed Karl Marx's Warning!

Mr. Gert van Vugt,
You make the best description on the theory on the economical growth Paradigm that the economic change seems like Malthusian’s diminishing return, and I agree. However, Mr. Roubini makes his point on the social disruption reverse itself through the diminishing demand. If we can put away the elements like the Ponzi scheme and benefactors in social caused deficiency or defects to growth. Corruption by capitalism and the dependency by socialism among societies both caused failure in the economical and societal development.
Perhaps, we focus on the circuitry on the accumulation of wealth and consumable wealth that runs the economy. It seems both the capitalism and socialism ran short and proven wrong in the economical model or social model that became self-destructive; eventually, the economy runs from diminishing demand to diminishing return, or vice versa. So, if we use the living standard as the equilibrium position to the supply line of the circuitry of wealth balanced by both of the diminishing return and diminishing demand.
How about I call my paradigm on the wealth circuitry in economical and social growth that supports and balances both accumulated wealth and consumable wealth; and it created a “Z” shaped development running both on the diminishing demand and diminishing return; which is based on the assumption, the route above the standard of living equal in length with the one below the standard of living is in agreement of its living standard to sustain a viable growth, which contains;
• The base line as the diminishing return where the societies kept peace with its populace that consumable wealth that cause economical displacement like with its negative growth or no growth; it provides entitlement or social programs with non-productive individual citizens for example, 27% of its population on welfare with add-on with subsidies to sustain a standard of living.
• The top line as the diminishing demand that ended with accumulated wealth favors of concentrated wealth owned by individuals that ended with profitless, 1% holds 27% of the global or national wealth, plus those with extra wealth is not in production yields to no growth.
• And the diagonal line that connected to both ends is the support of the price and value in the middle is the standard of living which contains the most of the productive individuals who is moving up and down the ladder of growth.
If more of the wealth accumulated than the wealth consumed, then it causes saturation of the wealth. The diminishing demand under the standard of living agreement made the demand idle because of the shortage of consumption. In the process, the standard of living will go down to meet its demand after the deflationary measure to make it consumable. In reverse, the wealth consumed is over the wealth accumulated, as it is less profitable. Then, it triggers the inflationary measures to aggregate demand to accumulate more wealth in its diminishing return mode; eventually it will balance itself again with the agreement of the standard living with a viable growth.
It is not the supply and demand. It is rather the circuitry of wealth under the spells of the lower living standard that diminishing demand is being part of the deflationary measure. If the accumulated wealth became saturated, then it means the lower living standard that made the demand finite like lesser demand in loan of dollars in ECB.
I am certain I am not being introspective; I may twist the theory a little; but the proof of the lower living standard in Europe made it plausible.
May the Buddha bless you?

I bet not many know of Keynes or Hayek, economist may find theories on the principles; however, the burden now lean on the majority who strive under the margin of affordability. The coming disaster with not be defaults of banks; it will be strike and riots within that supply and demand which became irrelevant to them. Social uprising demonstrates the defiance of the price and valuation that Central Bank and governments. This is because they erased the deflation for the convenience of easier balance in the budget or stability as Ms. Thatcher demanded, and not within the pockets of the labor, and they do not get relief. Further stimulation could become the rift as interest rate or CPI rises. And, I said the chaos begin in October when CDS and CoCos and shareholders of the bank having conflict in reviving the debt or the banking. Goldman Sachs is the first sign, another Buffet?

Sorry, I have never read "The Road to Serfdom", and I hands shake when I took out my credit card.

May the Buddha bless you?

May the Buddha bless you?
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Marinus Huizer Apr 3, 2013

Why is there so much emphasis on "austerity" in Europe, and so much criticism from the US and UK about that position? Is tray reduceable to Hayek vs Keynes? I guess not
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G. A. Pakela Apr 3, 2013

When indiduals need to save more, as in the aftermath of the most recent crisis, it is because they are over-leveraged. They have borrowed too much relative to their income and assets. Since the accumulation of excess debt on the part of households was widespread, it is better to allow them to get their fiscal houses in order so they can return to a more reasonable or equilibrium level of consumption. Keynesian economics would suggest that in the interim, government purchases take up the slack. This already takes place with deficit spending and automatic stabilizers in the federal budget. However, a permanent increase in government spending will create problems down the road as households will have to be taxed more in order to pay for the increase.

The effort on the part of central banks to cheapen money by taking real interests to zero and below is counter productive because those that can afford to borrow are made better off with cheaper debt, while those that depend on savings for retirement are made worse off. The question is whether this has become a zero sum game or worse.

Finally, a case can be made that the increased "stimulus" spending is crowding out private investment. While this might seem to be a counterintuitive outcome during a recession, the massive government deficits are causing lending to flow to the government at the expense of smaller firms. This has led to less private investment, and government is unable to pick up the slack through direct hiring.
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Stamatis Kavvadias Mar 7, 2013

The debate of Hayek-Keynes is outdated, and return to these views is a clear sign that economics, at least those popular to policy makers, are *not a science*. I am not an economist, but it is easy to see that in western economies, where the crisis hit, the ultra rich that amount to the largest part of the economy (those with the greatest savings, and least need to spend), have been those with the largest ability to save during the crisis. They have increased their wealth. The only issue is that they are placing their investments in developing countries instead of western ones.
Is that less or more investment economists?

From such ideological ...heights, the solution to the crisis could be, and all normal people (non-economists) can already see it, Hayekian to the ultra rich and Keynesian to the rest! They will leave with their firms? Make it very heavy economically to leave, for a sort interval, and "liquidate misallocations" fast.

There is an even bigger issue hidden by such ideological conversations of "economics scientists", which are not based on data and facts for today's economies, and still ask if cause of the crisis is "more investment or less", "more savings or less". The issue of 95% debt-created money, on which the western economies owe interest, no matter the choice between "liquidating the misallocations" or state borrowing to spend in the economy! States have tied their own hands, giving away the privilege to create money to the private banks (keeping only the central banks which play neutral). Now serious mismanagement of the most crucial part of the private sector, the banks, still does not raise political discussion to take away the privilege. There is no need for private banks to be the only suppliers of money, and for all money to be credit. Print real money (same as US zero interest rates), as long as banks do not lend, but do not give it to the banks. Put it directly to help, education, and infrastructure. Stiglitz is the only one making any sense.

Maybe the US can borrow at zero interest and spend around the world (possibly that is what the author insinuates). But if the above issue I mention is not addressed, only the ultra rich will benefit. A scam to monopolize an immense amount of money, far larger than nations can create (unless central banks really interfere bypassing private banks), will have worked.
- Stamatis Kavvadias Mar 7, 2013
  
  Well, I made a mistake. Really "printed" money are not like the US borrowing at zero interest, because they stay in the economy until removed purposely (with intervention). This is problematic when money is lent twice and owed to two simultaneous lenders... When virtually all money is debt, there is no way to repay the amount of twice lent money.
  ...And the question is if you would print real "everlasting" money, would it be wise to repay such lenders?
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Carol Maczinsky Mar 5, 2013

Mr. Skidelsky overlooked the real Austrian school: Ordoliberalism. This view is the winner of all debates we had in the last 50 years, including the USSR transition. The sort of US softy regulation inflicts too high costs. Of course ordoliberal policies require a defense of the governance against corporate capture.

It is not important wheter the "the coordinated global stimulus of 2009 stopped the slide into another Great Depression.", simply because it is the response to previous regulatory failure, and the regulatory side still isn't fixed.. When the house burns you may argue whether it is useful to pour water in or do sth else to keep the fire under control. That is no argument for living in wet rooms.
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