The compare and contrast discussions of Keynes and Hayek have wended their way over the last few years from learned academic texts to YouTube sensationalist rap videos. We have to say we have our preference among those two extremes. However, in a recent interview with Nicholas Wapshott of Reuters, INETeconomics pulls back the veil a little more of the borrow-and-spend short-termist optimism of Keynes versus the 'if it can go wrong, it will' pragmatist pessimism of Hayek. Unfortunately, it seems we are rapidly unlearning a number of the lessons of the eternal optimist - fixing the world right now in favor of solving the underlying problems and furthermore as Wapshott notes, civilization is a lot more fragile than one can imagine. Starting from the perspective that Hayek was engaged by the LSE to take on the establishment Cambridgian, their very different personal experiences of post-war, post-depression life set them looking for solutions from very different perspectives. While their public arguments were seen as ungentlemanly at the time, though published in journals, it became clear that Hayek faced an uphill battle, and perhaps only now, thanks to the collapsing capabilities (or willingness) of governments to borrow-and-spend, are we able to 'mess with the Keynesians'. While avoiding extreme politics and authoritarianism may be a common-sense raison d'etre, the ongoing devaluation wars could perhaps be as capable of pushing the world to these limits as any non-Keynesian solution ever was.
The full five-part interview can be found here.