Keynes vs Hayek

Discussion in 'Economy' started by LOki, Sep 28, 2011.

  1. LOki
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    LOki The Yaweh of Mischief

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    Sorry if these have already been posted.

    [ame=http://www.youtube.com/watch?v=d0nERTFo-Sk&feature=player_embedded]Fear The Boom & The Bust[/ame]

    [ame=http://www.youtube.com/watch?v=GTQnarzmTOc&feature=player_embedded]Fight Of The Century[/ame]
     
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  2. expat_panama
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    expat_panama Silver Member

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    The "Fight" one was posted but I haven't seen the other. imho we need both reposted regularly anyway...
     
    Last edited: Sep 28, 2011
  3. LOki
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    LOki The Yaweh of Mischief

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    [ame="http://www.youtube.com/watch?v=hjh7mXPfMKs"]Is Capitalism "Pro-Business?"[/ame]

    [ame="http://www.youtube.com/watch?v=4Ttbj6LAu0A"]Does Capitalism Exploit Workers?[/ame]

    [ame="http://www.youtube.com/watch?v=gSgUENZ9O94"]How Cronyism is Hurting the Economy[/ame]

    [ame="http://www.youtube.com/watch?v=kJeuoMh46JY"]Who Exploits You More: Capitalists or Cronies?[/ame]
     
  4. EdwardBaiamonte
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    EdwardBaiamonte Gold Member

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    Keynes vs Hayek:

    I think the essential difference is that what Keynes saw as stimulus Hayak saw as mal-investment or bubble, using today's parlance. Hopefully the housing bubble killed off Keynes forever.
     
  5. Widdekind
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    Widdekind Member

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    Governments can borrow at lower interest rates, compared to private businesses. Fiscal Stimulus, therefore, can be advantageous, when Governments borrow, for productive public "super-investments", like infrastructure, highways, the internet. Government spending can be good, on productive capital investments; Government bureaucracies are typically bad, at providing services.
     
  6. percysunshine
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    percysunshine Gold Member

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    Keynes vs Hayek

    Keynes was a south paw. He could never take a right jab.
     
  7. Oddball
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    Oddball BANNED Supporting Member

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    Keynes vs Hayek

    I'll take Hayek and lay the points.
     
  8. CrusaderFrank
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    CrusaderFrank Diamond Member

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    Keynes is down a few trillion
     
  9. Oddball
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    Oddball BANNED Supporting Member

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    [​IMG]
    Well, sir... we're hoping that our midterm grades will help our average.
     
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  10. Bfgrn
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    Bfgrn Gold Member

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    Hey Jethro, can you name any country whose economy is Austrian school based?

    Oh, that's right...America, before Keynesian economics ended the Great Depression. You know, the Great Depression, the one caused by following Hayek...

    Economic Policy Under Hoover

    Throughout this decline—which carried real GNP per worker down to a level 40 percent below that which it had attained in 1929, and which saw the unemployment rise to take in more than a quarter of the labor force—the government did not try to prop up aggregate demand. The only expansionary fiscal policy action undertaken was the Veterans’ Bonus, passed over President Hoover’s veto. That aside, the full employment budget surplus did not fall over 1929–33.

    The Federal Reserve did not use open market operations to keep the nominal money supply from falling. Instead, its only significant systematic use of open market operations was in the other direction: to raise interest rates and discourage gold outflows after the United Kingdom abandoned the gold standard in the fall of 1931.

    This inaction did not come about because they did not understand the tools of monetary policy. This inaction did not come about because the Federal Reserve was constrained by the necessity of defending the gold standard. The Federal Reserve knew what it was doing: it was letting the private sector handle the Depression in its own fashion. It saw the private sector’s task as the “liquidation” of the American economy. It feared that expansionary monetary policy would impede the necessary private-sector process of readjustment.

    Contemplating in retrospect the wreck of his country’s economy and his own presidency, Herbert Hoover wrote bitterly in his memoirs about those who had advised inaction during the downslide:

    The ‘leave-it-alone liquidationists’ headed by Secretary of the Treasury Mellon…felt that government must keep its hands off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate’.…He held that even panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people’.



    The Federal Reserve took almost no steps to halt the slide into the Great Depression over 1929–33. Instead, the Federal Reserve acted as if appropriate policy was not to try to avoid the oncoming Great Depression, but to allow it to run its course and “liquidate” the unprofitable portions of the private economy.

    In adopting such “liquidationist” policies, the Federal Reserve was merely following the recommendations provided by an economic theory of depressions that was in fact common before the Keynesian Revolution and was held by economists like Friedrich Hayek, Lionel Robbins, and Joseph Schumpeter.
     

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