Hayek and Keynes rap duel

by CynthiaYockey on January 26, 2010

H/T Megan McArdle via Alex Massie at The Spectator, UK.

Swear to God last week I ordered the following five books:

  • Going Rogue by Gov. Sarah Palin
  • The Road to Serfdom by Friedrich von Hayek
  • The Fatal Conceit: the Errors of Socialism by Friedrich von Hayek
  • Socialism by Ludwig von Mises
  • Liberalism by Ludwig von Mises

Going Rogue is a delightful book, but I have to admit, the other four are tougher sledding. I want to understand the school of economic thought at the foundation of Gov. Palin’s Commonsense Conservatism since I’m going to be writing about her more. After all, her economic approach to governing does have a distinguished pedigree.

And with boom-and-bust cycles under discussion in the video above, this is a good place to include a video Moe Lane featured in a post on Jan. 18, which explains how the Community Reinvestment Act passed under Carter and amended under Clinton created so many of the conditions causing our current economic crisis — a boom and bust, if you will:

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  • Kelly

    Hi Cynthia –

    Ohhhh does my blood BOIL whenever I hear sh*theads Dodd or Schumer of Frank speak about the Wall Street greed, lack of oversight, de-regulation, whatever they’re saying today that “caused” the housing bust. THEY caused it. THEY were the key players that forced the banks to give sub-prime loans. How they sleep at night…I hope they don’t. I hope there’s a nice place in hell waiting for these men.

    It seems you already have a pretty daunting book list to conquer, but if you can find the time, if you haven’t already:

    Thomas Sowell’s Housing Boom and Bust is excellent. He writes so clearly and does an terrific job of showing the many moving parts that led to this economic disaster. And unlike most Sowell books, this one is short.

    http://www.amazon.com/Housing-Boom-Bust-Thomas-Sowell/dp/0465018807/ref=sr_1_9?ie=UTF8&s=books&qid=1264526000&sr=8-9

    As for gaining insight into Palin’s common sense economics…I would think that Sowell’s Basic Economics would pretty closely mirror Palin’s economics. The full title of this book is, after all, Basic Economics: A Common Sense Guide to the Economy. In short: government pretty much always messes up the natural balance that the free markets strike, and thus govt should just get the hell out of the way. Only caveat: This is a characteristically long Sowell book. For what it’s worth – his writing is just so approachable and easy. Nothing dense here. He’s not out to look like your average Ivy League pseudo-intellectual and intimidate readers with confusing language (like most clowns indoctrinating our students). Not one ounce of pretense to this wonderful, brilliant man.

    http://www.amazon.com/Basic-Economics-3rd-Ed-Economy/dp/0465002609/ref=sr_1_3?ie=UTF8&s=books&qid=1264526000&sr=8-3

    GOOD LUCK! As always, looking forward to your Palin posts.

    • Kelly,

      Thank you for the recommendations — I’ll have to read Sowell’s books, too.

      I’m thinking of writing posts on “The Road to Serfdom” as I work my way through. The principles Hayek expresses are beautiful and apt for our situation today.

      Cynthia

  • <fx: filter with buzz>DANGER! DANGER WILL ROBINSON! Cynthia!

    I presume that you still have friends in moonbatland; most people who have made the leap do. If you want to keep them, well, von Mises is OK if you keep it short, but DO NOT start quoting Hayek at them, especially Road to Serfdom, unless you are sure to make the quotes long enough that they get lost in the syntax. This is a good way to zing them without their knowing, but has no utility whatever as a teaching tool or stimulator of debate.

    If they really understand what you’re up to, what you will get is “Unfair!” and downhill from there. A visit from the local shrink is not out of the question — “Well, I dunno, doctor, she was OK last week but then she started babbling this really terrible stuff. Maybe she’s just off her meds.”

    Tread carefully.

    Regards,
    Ric

  • Gary

    Assuming that the video really does accurately define the root of the problem, (it makes sense to me) how sad is it that the GOP ticket couldn’t have been more aggressive in painting the true picture? McCain and Palin were seemingly shell-shocked by it; the best they could muster was to occasionally blame the whole mess on “Wall Street greed”. George W. Bush was nowhere to be found, apparently preferring to stay out of the whole ugly mess as much as possible. No Republican Reps or Senators (there may have been a few) had either the knowledge or the courage to fight back against the Democrats unabashedly blaming it all on them and/or Bush.

    To win the game you don’t have to be dishonest or corrupt. But you do need to be smart, informed and courageous.

    • Gary,

      McCain’s campaign was done in by McCain and his campaign manager, Steve Schmidt, whose slogan was, “Me First,” instead of “Country First.” They squandered the advantages Gov. Palin brought to the ticket. And I was furious with McCain for losing his nerve when Obama slammed him about his first speech after the financial crisis hit, reassuring Americans that the fundamentals of the economy were strong. He was a fool to let Obama shift him off that message because it went to the foundation of McCain’s campaign: that smaller government unleashes the economic power of individuals. And that fundamental is still strong in America.

      Cynthia

  • I wish I had posted this first! That rap duel… is the s$%t! By the way, in other latitudes you have to read Marx before anything else, in order not to be disqualified for debate by “not having read it” (that’s the set of rules of the left, they don’t have to read anything else but YOU have to read what they read). I would respectfully recommend Milton Friedman and “Free to Choose: A personal statement”.
    .-= Dr. sipmac´s last blog ..Uncyclopedia UnNews: Unfunny, plain sick =-.

  • Serapia

    I’ve never commented here before. Hello!

    I recently read Hayek’s “Road to Serfdom” and also his “Counterrevolution of Science” (which has, among other things, a priceless description of the engineering mentality — I say this being from a long line of engineers). Good Stuff.

    I, too, would recommend Sowell, particularly “Knowledge and Decisions” and “A Conflict of Visions”. “Knowledge and Decisions” is a great book for anyone who’s ever wondered how societies coordinate the knowledge that their members possess, and how coordinating social knowledge through markets differs coordinating it through political processes.

    I’d also recommend Milton Friedman’s “Capitalism & Freedom” and, if you’d like some history, Tocqueville’s “Democracy in America” (translated by Goldhammer).

    I’m almost done with Adam Smith’s “Theory of Moral Sentiments”, which I can also strongly recommend, after which I’ll finally tackle “Wealth of Nations”.

    I made myself the promise a while back that I’d stop hearing about all this stuff secondhand and read the sources myself, and the economy has, er… graciously bestowed on me the opportunity to catch up on my reading.

    Other authors that I’d recommend for understanding our Anglosphere heritage? Theodore Dalrymple is one, and, oddly enough, Miss Manners (Judith Martin) is another.

    Happy, happy reading, Cynthia, and everybody else!
    That rap duel takes the bally biscuit! My economist husband is wondering why he never thought of using rap to teach economics.
    Humdingers all ’round!

    • Serapia,

      Thank you for all the recommendations! I will make sure to read all the books you recommend.

      Judith Martin, aka Miss Manners, is one of the biggest influences of my life. I started reading her column, “Miss Manners,” in the Baltimore Sun around 1980 and then in the Washington Post after I moved to the Washington, D.C., area in the late summer of 1983. The life-changing revelations for me were in her book, “Miss Manners’ Guide to Excruciatingly Correct Behavior,” now available in an updated edition — although I recommend searching for the earlier edition in used bookstores and online. I borrowed addressing my readers as “gentle readers” from her. My intention was to set a tone of kindness and good manners, which has worked so well that I think I have the most intelligent and courteous commenters of any blog I read.

      So, why was Miss Manners’ book so life-changing for me? She taught that I could set boundaries and she showed me how to do it firmly and politely. Heaven! So, I recommend to all my gentle readers: lawfully lay hands on every book Miss Manners has ever written and read them and take them to heart. They will set you free — and make you howl with laughter.

      Oh, and the coolest thing! Not long after moving to D.C., I was at the Kennedy Center for a play about LBJ and I SAW MISS MANNERS! She is quite lovely and wore her hair in the Gibson Girl style I’d seen in photos of her. I was all aflutter!

      Cynthia

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  • Serapia

    Meeting Miss Manners? If I were a Jane-Austen-era gal, I’d swoon!

    I too, needed the revelation that failing to enforce your boundaries (politely, of course, but firmly) isn’t simply against your own interests, but is actually unkind to the people around you in the long run. Also, as I grow up, I realize more and more why we need Miss Manners for a free society. As Burke says:

    “Men are qualified for civil liberty in exact proportion to their disposition to put moral chains upon their own appetites… Society cannot exist, unless a controlling power upon will and appetite be placed somewhere; and the less of it there is within, the more there must be without.

    “It is ordained in the eternal constitution of things, that men of intemperate minds cannot be free. Their passions forge their fetters.”

    PS: Though “The Counter-Revolution of Science” (Hayek) was an edifying book for me, it wasn’t the easiest book to get into, and not the sort of thing I’d start with. The “priceless description of the engineering mentality” is in the chapter, or essay, entitled “Engineers and Planners” and this essay may be available independently from the rest of the book.

  • The Library of Economics and Liberty provides Hayek’s 1945 American Economic Review essay “The Use of Information in Society” . It briefly states one fundamental insight that Von Mises also indicated in his much longer work Socialism, that planners, no matter how intelligent and altruistic, cannot know the individual preferences of all those who must endure their plans. Planners also cannot know the microscopic details of production in every bicycle repair shop and cafe. State-level planning is a very blunt instrument. This is why government schools are a disaster and why Obamacare will be a disaster if enacted.

    I recommend reading the Hayek essay several times; twice in rapid succession and, after a week of digestion, again. I read a quote, purported to be from Paul Samuelson, to the effect that when he first read Hayek’s essay he thought it was “small beer” but that later he realized the idea Hayek communicates was quite important. Samuelson gained his fame by formalizing economic analysis. Naturally, he would initially incline toward dismissing Hayek’s marginalization of mathematical formalization.
    .-= Malcolm Kirkpatrick´s last blog ..More on the Teacher Standards Board =-.

    • Malcolm Kirkpatrick,

      Thank you for referring me to this essay.

      Actually, I do not have to be persuaded to agree with von Mises and Hayek at all, due to practicing the Transcendental Meditation technique all my adult life — 36 years next week. What the TM technique does is allow the conscious mind to settle down and experience pure consciousness, which is an unbounded state of pure potential that is the source of thought. Centrally-planned societies or dictatorships cut the connection between the individual and their ability to manifest their unlimited potential and that is the cause of the stagnation these societies experience.

      I know that explanation will not make sense to most people.

      Cynthia

  • It does to me, although I would not put it that way.
    .-= Malcolm Kirkpatrick´s last blog ..More on the Teacher Standards Board =-.

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