F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things.
Economist Sudha Shenoy decided to rectify the problem. As a Hayek scholar, she noted that Hayek had in fact addressed Keynesian policy in scattered places throughout 40 years of writing. She decided to select the most poignant passages. She linked them all together with marvelous commentary and analysis.
And voila! Here is the book on Keynesian economics that Hayek never wrote.
It first came out in 1972, to wide acclaim. The Hayek parts are fantastic, of course. The surprise is the expert editing job by Professor Shenoy, which adds enormous value. In 192 pages, the book ended up being a total demolition by Hayek of the most baneful influence on economic science in the 20th century.
It was published by the Institute of Economic Affairs but fell out of print. The Mises Institute cooperated with IEA to completely reset the book and publish it anew. It adds something even more wonderful: a massive introduction by monetary theorist Joseph T. Salerno.
In total, then, this is a priceless collection, one that will enlighten and save you from hoping up and down to your bookshelf. It strikes you as you read what a brilliant mind Hayek had, how tough minded he really was, and just how off base is Keynesian theory.
You can get the metaphor the title. What Keynesianism unleashes is wicked inflation that no one can control. This might be the essential guide to our future.
Books excerpted include:
Prices and Production (1931)
Monetary Nationalism and International Stability (1937)
The Pure Theory of Capital (1941)
‘A Commodity Reserve Currency’, Economic Journal (1943)
Studies in Philosophy, Politics and Economics (1967)
The Constitution of Liberty (1960)
‘Personal Recollections of Keynes and the “Keynesian Revolution”,’ The Oriental Economist (1966)
‘Competition as a Discovery Procedure’, New Studies in Philosophy, Politics and Economics (1978)
‘Caracas Conference Remarks’, Mont Pèlerin Conference (1969)
‘Good and Bad Unemployment Policies’, Sunday Times (1944)
‘Full Employment Illusions’, Commercial & Financial Chronicle (1946)
‘Full Employment in a Free Society’, Fortune (1945)
{ 16 comments }
Unsurprisingly, the reason Hayek never wrote a comprehensive rebuttal to the General Theory, is because he wrote a full refutation to a previous Keynes book (Treatise on Money, methinks). Keynes effectively said “oh that book, I don’t beleive in that anymore”.
Good to see a lot of Hayekian thought being published by the Mises Institute.
online version?
sorry, a bit late on this. look for it next week. just haven’t had time. getting ahead of ourselves.
“F.A. Hayek said that his biggest regret in a lifetime of writing was that he never wrote a book-length refutation of Keynesian economics. He seriously doubted that Keynesian style planning would ever captivate governments, so he focused on different things.”
Honestly, isn’t it possible that he simply could not refute the theory completely at that time? After all, even Robbins joined Keynes for reasons unknown. The Keynesian case must have been very convincing.
Undoing Socialism
Friday, April 17, 2009
Got The Keynesian Tiger By The Tail!
What a great title and what a timely publication! This is especially true since the media has allowed Hayek’s contributions to receive praise. (They don’t dare open the flood gates by suggesting that Ludwig von Mises was the greatest economist of the twentieth century.)
As usual we are all greatly indebted to the Mises Institute.
Now the demolition of Keynes will be complete. It is true that it was an error on Hayek’s part not to demolish the ‘General Theory’ when it came out. But that error has now been corrected!
Rest in peace, Fredrich von Hayek!
I purchased a second hand copy of this a few years ago and it is indeed great. Does the mises institute have any plans to republish other out of print IEA titles? There are a good number i’m interested in reading but pretty much the only option at present is tracking down scruffy ex-library copies at silly prices.
I have a pristine copy of this from 1971. I unearthed it at a used book store recently as I wasn’t born till long after it was published, but I can’t believe what good condition I found it in.
If only Obama and his constituents could be forwarded a copy of this literature and be persuaded to stop using discredited theories in their policies.
I’m liking the new cover better than the one I have:
http://i43.tinypic.com/311uat2.jpg
I never grow tired of reading Hayek’s criticism of other peoples’ half-cooked theories. I don’t know why.
Hayek refutes Keynes in the 4 part of his _The Pure Theory of Capital_, and much of his refutation of Keynes’ 1930 also applies to Keynes’ 1936 — so in effect Hayek had refuted the “General Theory” in advance.
As I’ve long suggested, Hayek’s 1936 Presidential address “Economics and Knowledge” (1937) can be read as a refutation of Keynes as much as anything.
If you read Hayek, you see that he just couldn’t take Keynes seriously. He was truly shocked that anyone but the politics-only focused lefty economists did so.
Nick wrote:
“Honestly, isn’t it possible that he simply could not refute the theory completely at that time?”
Hayek refutes Keynes in the 4 part of his _The Pure Theory of Capital_, and much of his refutation of Keynes’ 1930 also applies to Keynes’ 1936 — so in effect Hayek had refuted the “General Theory” in advance.
As I’ve long suggested, Hayek’s 1936 Presidential address “Economics and Knowledge” (1937) can be read as a refutation of Keynes as much as anything.
If you read Hayek, you see that he just couldn’t take Keynes seriously. He was truly shocked that anyone but the politics-only focused lefty economists did so.
Nick wrote:
“Honestly, isn’t it possible that he simply could not refute the theory completely at that time?”
Why isn’t the IEA doing this kind of thing?
Well, the thing is, Greg, that IEA is doing this, in cooperation with the Mises Institute. This is the 3rd Hayek book we’ve copublished with IEA.
Did anyone look at the interview in which Hayek describes Keynes’ lack of knowledge of economics? Hayek said Keynes basically understood Marshall well and the attitude in the UK at the time was that only Marshall mattered. So Keynes knew nothing about any other economic thinking and knew no history. In fact, Hayek said that Keynes found economics boring and more of a hobby than anything. Keynes was far more interested in the arts.
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