As we discussed in September, much of the response to the global economic crisis of the past two years was based, at least in part, on the economic theories of John Maynard Keynes. Broad based government intervention in the economy has been defended as essential to avoid a complete systemic collapse. However, as the economy emerges from this period of crisis, the views of F. A. Hayek have been cited by many who wish to see government intervention promptly reversed.
F. A. Hayek’s classic book, The Road to Serfdom, was written in 1944 and warned readers about the tendency of unchecked government intervention to diminish individual freedoms. As we emerge from the extraordinary events of the past two years, it is a good time to revisit Hayek’s arguments particularly when considering how quickly government intervention should be reversed.
In the PBS NewsHour segment shown below, Keynes biographer Robert Skidelsky discusses the legacy of Keynes and Hayek with George Mason University Professor Russ Roberts and NewsHour correspondent Paul Solman.
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The question of whether Keynes or Hayek’s views are more appropriate for today’s economy is obviously open for debate. However, I hope that everyone can agree that economists should probably not rap…