Keynes - Hayek Debate
The
following videos are unusually intellectually rich for satirical music
videos. You will be able to see course material as well as contemporary
policy debates (c. 2008-12) represented in them. Note that there are
more to be found at econstories.tv, although the site is explicitly an anti-Keynesian, pro-Hayekian site.
Overall, the music videos are
mostly accurate in their representations of the Keynesian and Hayekian
macro theories, although they are not balanced. They present more time
to the Hayekian view, which also always gets the last word, and often
blame the Keynesian view for things that Keynes was actually a critic
of, for example, the overuse of non-empirical (unrealistic)
mathematical models, and strategic (anti-competitive) behavior in
imperfect markets. They were created by followers of the Austrian free
market perspective, after all.
Besides including a lot of
analytical references, note that the videos also accurately capture the
"theory envy" that the Hayekians have toward the Keynesians, as Hayek
and Lawrence both lament that the Keynesian theory is inexplicably more
popular and dominant. Note also that Keynes is represented as a rich,
gambling, partying, reckless, irresponsible, celebrity. While that is
both funny, and some would argue accurate about Keynes' personal life,
it is not fair to portray his theory or the policy it espouses that
way. Indeed, Keynes made clear the distinction between wasteful
spending (both by government and private investors, i.e. speculation)
and productive spending on infrastructure, new technology, and new
industries.
Finally, after viewing the
videos, read the article at the bottom of the page written by Richard
Posner and published in the New Republic. Posner is a leading legal
expert (Judge on the 7th Circuit Court of Appeals and Professor at
University of Chicago Law School) who is also well-established in the
field of economics. He is also a well-established conservative thinker,
which is why he is wrote this for the New Republic, one of the leading
conservative political journals.
HAVE FUN!!!
How I Became a Keynesian
Second thoughts in the middle of a crisis
Richard A. Posner
The New Republic, Sept. 23, 2009