Saturday, February 6, 2010

"The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."


This video, brought to my attention via GeneExpression, is totally off the effing hook.

And sad but true: Hayek is ignored; Keynes gets attention. My spellcheck recognizes the latter but not the former, for god's sake (It also doesn't recognize "spellcheck"). Is it just my bias, or do the quotes from Keynes and Hayek at the end both seem to testify against Keynesians?

This video is also interesting as a propaganda piece in the way it seems to be manipulating human perceptions of social status. The Keynes character is full of loathsome conceit, the Hayek character is pitiable. I wonder how effective this is in subtle persuasion?

Added; some pithy points learned from the interviews with Hayek that YouTube (wonderful tool) suggests as follow-ups to that nice little rap:

Keynes's recommendation of deliberate inflation was a remedy to "sticky wages;" which was the result of trade unions having become very powerful in Britain at the time. That is to say: the contracts with unions forbade paying them a smaller amount of currency, so a roundabout way to achieve the same goal is to make the currency worth less in real terms. Note: "real terms" means "what one can actually buy with the currency" vs the face value of the currency. So inflation in this context can (and should) be viewed as a sneaky way of using government to stick it to the working folk. Though presumably to achieve a greater good. Presumably.

Hayek notes that Keynes later repudiated his own theory, and was appalled at the policies his pupils were using it to support. Keynes claimed that he would very strongly oppose such policies, but then died before he could be effective in the endeavor. I suppose this reversal means I can't continue to dislike Keynes as a person; but it casts a deeper shadow on those who continue to espouse Keynes's own disavowed theories in his name.


Matthew J Peterson said...

I love this video too because it takes the drama away from the distracting current events and returns the dialog to ideas.

TJ Murphy said...

Excellent point, and well said.

It does obliquely allude to current events though; "Hayek" mentions the housing construction bubble, and "Keynes" is quoting Nixon when he says "were all Keynesians now."