Saturday, February 2, 2013

Lord Keynes — Philip Pilkington on Hayek and the Origins of Neoliberalism

When Hayek’s economics essentially failed, he turned to a different program: social and political theorising.
While Hayek's economics may have failed his own expectations, his social and political theorizing lead to the dominant contemporary narrative, likely wildly beyond his expectations. It was an idea whose time was right, even though it was not a right idea. Now we are experiencing it's failure.

Social Democracy for the 21st Century
Philip Pilkington on Hayek and the Origins of Neoliberalism
Lord Keynes

43 comments:

Bob Roddis said...

OMG. I listened to that whole stupid podcast last Saturday. Pilkington is so ignorant about everything I assumed that even LK would be too embarrassed to mention the podcast.

I should learn to never underestimate LK.

Someone should write up a transcript of the podcast. It's truly amazing.

Bob Roddis said...

Hayek simply could not believe that anyone could take Keynesianism seriously. Keynesianism was refuted before Keynes even wrote "The General Theory". Keynes completely ignored Hayek's analysis just as MMT, LK, Krugman and Mr. Pilkington continue to do. There is no engagement with the analysis because there dare not be.

The compilation "Tiger by the Tail" is taken from numerous Hayek sources post GT. Books and sources excerpted include:

Prices and Production (1931)
Monetary Nationalism and International Stability (1937)
The Pure Theory of Capital (1941)
‘A Commodity Reserve Currency’, Economic Journal (1943)
Studies in Philosophy, Politics and Economics (1967)
The Constitution of Liberty (1960)
‘Personal Recollections of Keynes and the “Keynesian Revolution”,’ The Oriental Economist (1966)
‘Competition as a Discovery Procedure’, New Studies in Philosophy, Politics and Economics (1978)
‘Caracas Conference Remarks’, Mont Pèlerin Conference (1969)
‘Good and Bad Unemployment Policies’, Sunday Times (1944)
‘Full Employment Illusions’, Commercial & Financial Chronicle (1946)
‘Full Employment in a Free Society’, Fortune (1945)

http://archive.mises.org/9806/tiger-by-the-tail-hayek-on-keynes/

http://mises.org/books/tiger.pdf

Bob Roddis said...

"Prices and Production" is pre-GT.

Bob Roddis said...

In February, 2011, the American Economic Review (specifically Kenneth J. Arrow, B. Douglas Bernheim, Martin S. Feldstein, Daniel L. McFadden, James M. Poterba, and Robert M. Solow) named its top 20 articles of the last 100 years. Included therein was:

Hayek, F. A. 1945. “The Use of Knowledge in Society.” American Economic Review, 35(4): 519–30.

http://pubs.aeaweb.org/doi/pdfplus/10.1257/aer.101.1.1

The "problem of knowledge" is the core concept of the Austrian School. Hayek was writing about this in 1945, after GT. Where was this concept or article mentioned or acknowledged in the Pilkington podcast?

Being a top 20 article in the past 100 years means nothing, right? One need not even bother to know, understand or even identify the subject matter of the article and it can nevertheless still be refuted by MMTers.

Lord Keynes said...

(1) Hayek simply could not believe that anyone could take Keynesianism seriously.

No, bob roddis. Hayek came to accept the central idea of Keynesianism: fiscal stimulus in a depression:

http://socialdemocracy21stcentury.blogspot.com/2011/09/did-hayek-advocate-public-works-in.html

(2) "Keynes completely ignored Hayek's analysis just ... "

No, he did not. Keynes debated and critiqued Hayek's economics by private correspondence (with Hayek) and in public debate:

Keynes, J. M. 1931. “The Pure Theory of Money. A Reply to Dr. Hayek,” Economica 34 (November): 387–397.

Ingrao, B. 2005. “When the Abyss Yawns and After. The Correspondence between Keynes and Hayek,” in M. C. Marcuzzo and A. Roselli (eds.), Economists in Cambridge. A Study Through their Correspondence, 1907–1946. Routledge, London. 236-256.

Ingrao, B. and F. Ranchetti. 2005. “Hayek and Cambridge: Dialogue and Contention,” in M. C. Marcuzzo and A. Roselli (eds.), Economists in Cambridge. A Study Through their Correspondence, 1907–1946. Routledge, London. 392-413.

(3) And Paul Krugman - like Hayek - got the Nobel Prize too. As did the social democrat Gunnar Myrdal (joint winner with Hayek). So what?

In the very same AER list of articles we find:

Krugman, Paul. 1980. “Scale Economies, Product Differentiation, and the Pattern
of Trade.” American Economic Review, 70(5): 950–59.

So therefore we can just cite that fact and pretend that will silence any critics of Krugman, right?

(4) Looking at that AER list, it is mostly filled with neoclassical rubbish. Presumably you do not accept neoclassical economics, yet virtually all of these articles are derived from the neoclassical paradigm.

TheIllusionist said...

Two comments. One particular, one general.

(1) All that stuff that Hayek wrote after the final failure of his attempts to cobble together a coherent economic doctrine were about the philosophy of knowledge. Like all his stuff on "freedom" and "tyranny" and all that other metaphysical nonsense, these were philosophical doctrines with which Hayek threw up a smokescreen around himself (because these issues, having been debated for millenia, will never be truly resolved).

The reason I never mentioned this aspect of Hayek's work is because it had no widespread influence. It was marginal and had little to do with the spread of neoliberalism. To understand the latter we have to understand Hayek's delusion -- that is, his assertions about economic planning and social organisation. Which leads me to my more general point.

(2) I've got a lot of flak over both the series and the interview from the Austrians, but none of them have actually said that I was wrong about Hayek's delusion.... which is what the whole thing is really about. None of them are willing to seriously engage with my contention that Hayek was deluded when he asserted that economic planning led to totalitarian political organisations. Interesting, no? It's as if I've touched on a strongly mythic component of their entire belief system. A fantasy that has been handed down from generation to generation. So, in a way the responses I've got so far have sort of confirmed my overarching thesis.

--Phil

Bob Roddis said...

All that stuff that Hayek wrote after the final failure of his attempts to cobble together a coherent economic doctrine were about the philosophy of knowledge. Like all his stuff on "freedom" and "tyranny" and all that other metaphysical nonsense, these were philosophical doctrines with which Hayek threw up a smokescreen around himself (because these issues, having been debated for millenia, will never be truly resolved).

The reason I never mentioned this aspect of Hayek's work is because it had no widespread influence. It was marginal and had little to do with the spread of neoliberalism.


Hmmmm.

His “cobbling together of a coherent economic doctrine” was nothing more than work on the Austrian Business Cycle Theory for which he won the Nobel Prize*. The central concept of the entire Austrian School is the “knowledge problem”, the undisputed observation that knowledge is widely dispersed and is only in the heads of individual economic actors and can never be brought together by central planners or fiat money manipulating Keynesian bureaucrats. So, both the Nobel Prize and the recognition by the American Economic Review go directly to recognizing the central insight of the Austrian School. A basic observation of the Austrian School is that it is Keynesian policies that cause, not cure, the boom/bust cycle. It is clear that you have no familiarity with these concepts whatsoever. If these ideas have no influence, why the constant attacks on the Austrian School by Mike Norman?

Further, the insights of the “knowledge problem” easily explain why central economic planning cannot work. The essence of central economic planning is that the perpetrators must have power over the populace and their property to force them to obey the plan under penalty of law. This means a legal regime that has eviscerated the essential protections of private property and freedom of contract (all to solve a problem that does not exist). If the plan is merely a suggestion that can be ignored, it does not amount to central planning. However, people who do not follow a true central plan will be arrested or fined or somehow punished, by definition. Since central planning cannot work and will only cause further impoverishment, the perpetrators of the plan will be forced to scapegoat someone since powerful people in government will never admit that they were economic illiterate fools and that it was their dimwitted insistence upon an unworkable central plan that actually caused all of the problems.

An interesting corollary of this observation is that in multi-ethnic social democracies with lots and lots of “public goods” (“socialism”), electoral factions break down almost immediately along ethnic lines with the largest ethnic group winning the election and control over the entire nation’s wealth (since everything belongs to the government). Bad stuff like Rwanda and Biafra follow. I call that “The Road to Rwanda”.

http://tinyurl.com/axpt443

*I mention the Nobel Prize because, at the very least, a person criticizing Hayek should understand something about the subject matter for which he was awarded the prize. BTW, “Lord Keynes” hasn’t a clue.

http://consultingbyrpm.com/blog/2012/09/tom-woods-keeps-krugmans-feet-to-the-fire.html#comment-45198

y said...

If Bob knew what he was talking about he'd realise how ridiculous and idiotic his arguments are.

Matt Franko said...

Phil,

#1 Thanks for your post exposing this Hayak person ...

"because these issues, having been debated for millenia, will never be truly resolved"

Have they been debated for millenia?

wiki (I know...) says that the word "libertarianism" was never even in the English lexicon until 1857... it came from an original French word at that time...

Could it be possible that this debate is a more recent phenom? ie 150 years vs millenia?

Tom, Did the ancient Greeks debate exactly this kind of thing to your knowledge?

This may be a more recent debate within humanity....

rsp,

Lord Keynes said...

(1) "His “cobbling together of a coherent economic doctrine” was nothing more than work on the Austrian Business Cycle Theory for which he won the Nobel Prize*"

No, bob roddis, Hayek's business cycle work was over by the early 1940s, before Hayek turned to political posturing. His ABCT project failed, failed miserably. Hayek never even wrote the proposed second volume of "Pure Theory of Capital", where he was supposed to finally solve all the problems with his theory.

(2) A basic observation of the Austrian School is that it is Keynesian policies that cause, not cure, the boom/bust cycle

No, according to your cult leaders, fractional reserve banking and fiduciary media are a sufficient causes of Austrian business cycles - Hayek and Mises say this quite clearly.

So unless your libertarian world uses coercion and violence to suppress FR banking and fiduciary media it would - according to the logic of ABCT - still be subject to "funny money" creation, evil inflation and Austrian business cycles.

(3) "I mention the Nobel Prize because, at the very least, a person criticizing Hayek should understand something ..."

Yes, presumably just because someone won a Nobel memorial prize, it means all their theories must be right, huh?

Therefore all of Krugman's theories must be right, because he has a Nobel prize!

Tom Hickey said...

Matt: "because these issues, having been debated for millenia, will never be truly resolved"

Have they been debated for millenia?


Phil is talking about the epistemological problems that have occupied epistemology (the study of knowledge) since the beginning of philosophical reflection. The major problems were set forth by the Greeks, in particular Plato and Aristotle.

Suffice it to say that Hayek is not considered to be even a mediocre philosopher and is not taught in philosophy curricula as far as I know.

The basis of neoclassical economics is Jeremy Bentham's utility theory of ethics. Bentham is considered a third-rate philosopher and only gets passing mention in social and political philosophy. Utilitarianism is taught in terms of J. S. Mill, who trashed Bentham's puerile conception of utility as in terms of a calculus of material satisfaction as being sub-human, how animals function.

As a matter of fact, virtually all the great issues in economics are philosophical in origin, having to do with ontological, epistemological, and ethical presumptions that become hidden assumptions when they go unnoticed.

Since most contemporary economists don't study philosophy, they are unaware of these hidden assumptions. As a result, much of contemporary economics is based on the naive common sense view of the world that is assumed uncritically. As a philosopher, I just shake my head at how naive what passes for economics is.

This is not true of many economists, however, notably Marx, who did his PhD in Greek philosophy and was well-acquainted with the traditional issues and he laid out his thought in this way, stating the assumptions underlying his dialectical and historical materialism. Ludwig von Mises did the same thing from neo-Kantian point of view.

Neoclassical economics is based on the worldview of classical physics (equilibrium, mechanism), Bentham's utilitarianism (rational pursuit of maximum utility in terms of a calculus of material satisfaction), and Locke's propertarian individualism, emphasizing inalienable rights, alienable property, and freedom of choice.

These are taken as givens in the neoclassical view, but they are philosophical assumptions debated in philosophy.

Bob Roddis said...

Suffice it to say that Hayek is not considered to be even a mediocre philosopher and is not taught in philosophy curricula as far as I know.

Of course, it's much more important to know the reputation of a scholar than to have even the slightest familiarity or understanding of his writings.

From the 1971 Preface by Arthur Seldon to “Tiger By the Tail”:

Long before The General Theory Professor Hayek wrote a critique of Keynes’s 1930 Treatise on Money. In the last 40 years he has written periodic criticisms of the Keynesian system, although at one stage he withdrew from the debate on monetary policy because he considered that Keynes, and the Keynesians, were not discussing the aspects that seemed to him fundamental.

http://mises.org/books/tiger.pdf

Indeed. This perpetual evasion has always been the problem with Keynesians and socialists. They refuse to even engage those ideas that would eviscerate their fantasy world.

paul said...

"Neoclassical economics is based on the worldview of classical physics (equilibrium, mechanism)"

Obviously it's based on views of the wrong mechanisms and associated equilibriums.

Bob Roddis said...

"Neoclassical economics is based on the worldview of classical physics (equilibrium, mechanism)"

Since the Austrian School absolutely maintains that human action/economics are completely unlike physics or mechanics, how is it possible to view Hayek or the Austrian School as "neoclassical". Such a description is either muddle-headed or purposefully dishonest. Probably both.

http://mises.org/daily/3638

paul said...

Austrian economics is also based on views of the wrong mechanisms and associated equilibriums, so it's similar in that way.

Bob Roddis said...

Austrian economics is also based on views of the wrong mechanisms and associated equilibriums, so it's similar in that way.

1. What wrong mechanism?

2. What wrong "equilibriums"?

You haven't a clue.

If you want pizza for dinner but get served chicken, chicken and moon rocks are both not pizza, so chicken and moon rocks are similar in that way.

Tom Hickey said...

Byran Caplan distinguishes AE from neoclassical economics.

Why I Am Not an Austrian Economist

Tom Hickey said...

1. What wrong mechanism?

In applicable in complex adaptive biological and social systems. Physical analogies in the social sciences are very limited in application. To build a social theory on physics is bonkers.

2. What wrong "equilibriums"?

Nothing in physics, but it's not a useful concept in life and social sciences.

Lord Keynes said...

Bob Roddis said...

>Austrian economics is also based on
>views of the wrong mechanisms and
>associated equilibriums, so it's
>similar in that way.
....
2. What wrong "equilibriums"?


Priceless... Like this, bob, in the stock quotation of Hayek you always pull out, which is an example of a convergence to a market-clearing wage and price vector:

“The primary cause of the appearance of extensive unemployment, however, is a deviation of the actual structure of prices and wages from its equilibrium structure. Remember, please: that is the crucial concept. The point I want to make is that this equilibrium structure of prices is something which we cannot know beforehand because the only way to discover it is to give the market free play; by definition, therefore, the divergence of actual prices from the equilibrium structure is something that can never be statistically measured.” (Hayek 1975: 6–7).

But of course you are too much of a loud-mouthed, ignorant fool to recognize that this is also the essence of Walrasian GE theory.

When Hayek attributes
“extensive unemployment” to “a deviation of the actual structure of prices and wages from its equilibrium structure”, he is without doubt thinking of flexible wages that will gravitate to their equilibrium values, and therefore tending to clear the labour market.

paul said...

"What wrong mechanism?"

Economic calculation.

"What wrong equilibrium?"

Any so-called equilibrium that follows from economic calculation.

Bob Roddis said...

Oh, LK, you miserable liar. In the previous paragraph, Hayek explains:

These discrepancies of demand and supply in different industries, discrepancies between the distribution of demand and the allocation of the factors of production, are in the last analysis due to some distortion in the price system that has directed resources to false uses. It can be corrected only by making sure, first, that prices achieve what, somewhat misleadingly, we call an equilibrium structure, and second, that labor is reallocated according to these new prices. ****

http://www.flickr.com/photos/bob_roddis/7534880182/in/set-72157630494776170/

The structure of prices MISLEADINGLY REFERRED TO AS "EQUILIBRIUM" (but which are not really "equilibrium" prices) are those prices that would obtain by people making free choices in the market, free of government distortions. Prices clear all of the time during a distortionary Keynesian boom.

As Robert P. Murphy said:

Heh this is actually funny. I had always assumed Roddis was being unfair when accusing LK–who has read a ton of Hayek–of not knowing the Austrian concept of economic calculation. But, based on LK’s angry retort, turns out Roddis was right.

http://consultingbyrpm.com/blog/2012/09/tom-woods-keeps-krugmans-feet-to-the-fire.html#comment-45198

Lord Keynes said...

(1) The words "prices achieve what, somewhat misleadingly, we call an equilibrium structure" look like Hayek's way of saying that - although the equilibrium structure is never fully achieved (since no one really believes GE states actually come about in the real world) - wage and price rigidities are abolished so that prices and wages tend towards their equilibrium values.

There's nothing in those words that refutes that fundamental observation that Hayek in the passage in question is thinking of a market-clearing wage and price vector.

(2) As for Murphy, I frankly doubt whether he really agrees with you. He probably saw my comment on thread in question, did not realise you had this stock quotation of Hayek in mind, and thought I was referring to the socialist calculation debate.

And, even if does agree with you, it would nothing more than that he is as stupid as you.

Tom Hickey said...

" prices achieve what, somewhat misleadingly, we call an equilibrium structure,"

Philosophers call this waffling.

Equilibrium theory, general and partial, is based on unrealistic assumptions that result in non-representational models. They are heuristic devices only. Drawing specific conclusions from them is unwarranted.

Moreover, using this type of heuristic analysis to formulate political policy such as excluding government from markets is just twaddle that only ideologues could possibly fall for. It has no basis in reality and to think that governments are ever going to be excluded from markets is a pipe dream.

And if it ever were achieved it would turn out like Marx's dictatorship of the proletariat, that is, be hijacked by a powerful elite. Arguing this is just a waste of time.

paul said...

If economic calculation was such a powerful force in economics it would be asserting itself...liquidity, in the hands of consumers, appears to be the main determinant that consistently influences economic activity.

y said...

It's very simple to understand Bob's argument.

1. He presents a completely unsubstantiated and implausible assertion as a fact.

2. He argues that any objections to his completely unsubstantiated and implausible assertion must be wrong because his completely unsubstantiated and implausible assertion is a fact.

3. He concludes that his completely unsubstantiated and implausible assertion must, therefore, be a fact.

4. He shouts angry insults at everyone who disagrees with him.

Matt Franko said...

Bob is completely blind to authority.... cant see it at all ... rsp,

TheIllusionist said...

Still no discussion of economic planning and its "inevitable" result of a totalitarian political system as was outlined in "The Road to Serfdom"? Yep, thought so. Founding myths, after all, cannot be discussed, can they?

Better to naval-gaze and engage in crude epistemological debate that was, as Hickey points out, well below par for any serious philosopher. Hayek wasn't ignored by philosophers for no reason: what he was saying was stupid and crude. He wasn't much of an economist. He was no philosopher. So, what was he? Well, I would say: a pamphleteer; and agitator and organiser... a propagandist.

--Phil

Bob Roddis said...

Still no discussion of economic planning and its "inevitable" result of a totalitarian political system as was outlined in "The Road to Serfdom"? Yep, thought so. Founding myths, after all, cannot be discussed, can they?

Mr. P: Au contraire. Since you obviously never actually read the book, I started off gently with this (see above) which combined various aspects of Hayek’s viewpoint, all of which clearly escape you. I emphasized the stuff you missed the first time:

Further, the insights of the “knowledge problem” easily explain why central economic planning cannot work. The essence of central economic planning is that the perpetrators must have power over the populace and their property to force them to obey the plan under penalty of law. This means a legal regime that has eviscerated the essential protections of private property and freedom of contract (all to solve a problem that does not exist). If the plan is merely a suggestion that can be ignored, it does not amount to central planning. HOWEVER, PEOPLE WHO DO NOT FOLLOW A TRUE CENTRAL PLAN WILL BE ARRESTED OR FINED OR SOMEHOW PUNISHED, BY DEFINITION. SINCE CENTRAL PLANNING CANNOT WORK AND WILL ONLY CAUSE FURTHER IMPOVERISHMENT, THE PERPETRATORS OF THE PLAN WILL BE FORCED TO SCAPEGOAT SOMEONE SINCE POWERFUL PEOPLE IN GOVERNMENT WILL NEVER ADMIT THAT THEY WERE ECONOMIC ILLITERATE FOOLS AND THAT IT WAS THEIR DIMWITTED INSISTENCE UPON AN UNWORKABLE CENTRAL PLAN THAT ACTUALLY CAUSED ALL OF THE PROBLEMS.

http://tinyurl.com/acm8fcs

I replayed your podcast today. I will have much more on it later.

You are unfamiliar with the knowledge problem and you do not understand Austrian Business Cycle Theory or the socialist calculation problem.

Bob Roddis said...

And to prove that I actually listened to the podcast, as soon as it was over, I pulled up "Atlantis" by Donovan on my iPod.

http://www.youtube.com/watch?v=9AUEjzVQwKo

Bob Roddis said...

Apparently Mr. Pilkington missed Chapter VI of TRTS "Planning and the Rule of Law" which begins:

NOTHING distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its actions is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one's individual affairs on the basis of this knowledge. Though this ideal can never be perfectly achieved, since legislators as well as those to whom the administration of the law is intrusted are fallible men, the essential point, that the discretion left to the executive organs wielding coercive power should be reduced as much as possible, is clear enough. While every law restricts individual freedom to some extent by altering the means which people may use in the pursuit of their aims, under the Rule of Law the government is prevented from stultifying individual efforts by ad hoc action. Within the known rules of the game the individual is free to pursue his personal ends and desires, certain that the powers of government will not be used deliberately to frustrate his efforts.

The distinction we have drawn before between the creation of a permanent framework of laws within which the productive activity is guided by individual decisions and the direction of economic activity by a central authority is thus really a particular case of the more general distinction between the Rule of Law and arbitrary government. Under the first the government confines itself to fixing rules determining the conditions under which the available resources may be used, leaving to the individuals the decision for what ends they are to be used. Under the second the government directs the use of the means of production to particular ends. The first type of rules can be made in advance, in the shape of formal rules which do not aim at the wants and needs of particular people. They are intended to be merely instrumental in the pursuit of people's various individual ends. And they are, or ought to be, intended for such long periods that it is impossible to know whether they will assist particular people more than others. They could almost be described as a kind of instrument of production, helping people to predict the behavior of those with whom they must collaborate, rather than as efforts toward the satisfaction of particular needs.

Bob Roddis said...

Chapter VI continued:

Economic planning of the collectivist kind necessarily involves the very opposite of this. The planning authority cannot confine itself to providing opportunities for unknown people to make whatever use of them they like. It cannot tie itself down in advance to general and formal rules which prevent arbitrariness. It must provide for the actual needs of people as they arise and then choose deliberately between them. IT MUST CONSTANTLY DECIDE QUESTIONS WHICH CANNOT BE ANSWERED BY FORMAL PRINCIPLES ONLY, AND, IN MAKING THESE DECISIONS, IT MUST SET UP DISTINCTIONS OF MERIT BETWEEN THE NEEDS OF DIFFERENT PEOPLE. WHEN THE GOVERNMENT HAS TO DECIDE HOW MANY PIGS ARE TO BE RAISED OR HOW MANY BUSSES ARE TO BE RUN, WHICH COAL MINES ARE TO OPERATE, OR AT WHAT PRICES SHOES ARE TO BE SOLD, THESE DECISIONS CANNOT BE DEDUCED FROM FORMAL PRINCIPLES OR SETTLED FOR LONG PERIODS IN ADVANCE. THEY DEPEND INEVITABLY ON THE CIRCUMSTANCES OF THE MOMENT, AND, IN MAKING SUCH DECISIONS, IT WILL ALWAYS BE NECESSARY TO BALANCE ONE AGAINST THE OTHER THE INTERESTS OF VARIOUS PERSONS AND GROUPS. IN THE END SOMEBODY'S VIEWS WILL HAVE TO DECIDE WHOSE INTERESTS ARE MORE IMPORTANT; AND THESE VIEWS MUST BECOME PART OF THE LAW OF THE LAND, A NEW DISTINCTION OF RANK WHICH THE COERCIVE APPARATUS OF GOVERNMENT IMPOSES UPON THE PEOPLE.

The distinction we have just used between formal law or justice and substantive rules is very important and at the same time most difficult to draw precisely in practice. Yet the general principle involved is simple enough. THE DIFFERENCE BETWEEN THE TWO KINDS OF RULES IS THE SAME AS THAT BETWEEN LAYING DOWN A RULE OF THE ROAD, AS IN THE HIGHWAY CODE, AND ORDERING PEOPLE WHERE TO GO; OR, BETTER STILL, BETWEEN PROVIDING SIGNPOSTS AND COMMANDING PEOPLE WHICH ROAD TO TAKE. The formal rules tell people in advance what action the state will take in certain types of situation, defined in general terms, without reference to time and place or particular people.
[emphasis added]

y said...

"WHEN THE GOVERNMENT HAS TO DECIDE HOW MANY PIGS ARE TO BE RAISED OR HOW MANY BUSSES ARE TO BE RUN, WHICH COAL MINES ARE TO OPERATE, OR AT WHAT PRICES SHOES ARE TO BE SOLD"

I'm pretty certain the government doesn't decide how many pigs have to be raised or what prices shoes have to be sold at. Some local governments may provide bus services but most are privately run. Is that your point?

TheIllusionist said...

I must admit that I don't really get this guy's point (help me out here guys, is Roddis serious or just a ranter?).

Bob, are you saying that Hayek was only against Soviet-style planning and that Keynesian state planning like in Britain was A-OK. I'll freely admit that if "The Road to Serfdom" was only attacking strict central planning and was perfectly okay with the postwar planning in Britain then yes, I totally missed the point of the book... and, I would add, so did EVERYONE else.

--Phil

TheIllusionist said...

By the way, Bob, if this IS your argument -- because if its not then you're ranting and this may be my last comment -- then you'd better get your butt over to the Wiki page and edit the whole thing because it looks a LOT like what I said the book was about in the interview:

http://en.wikipedia.org/wiki/The_Road_to_Serfdom#Summary

"Hayek argues that Western democracies, including the United Kingdom and the United States, have “progressively abandoned that freedom in economic affairs without which personal and political freedom has never existed in the past.” Society has mistakenly tried to ensure continuing prosperity by centralized planning, which inevitably leads to totalitarianism. “We have in effect undertaken to dispense with the forces which produced unforeseen results and to replace the impersonal and anonymous mechanism of the market by collective and ‘conscious’ direction of all social forces to deliberately chosen goals.”"

--Phil

y said...

"is Roddis serious or just a ranter?"

Ranter who takes himself seriously.

Bob Roddis said...

Mr. Pilkington:

Have you read Bruce Caldwell’s relatively recent introduction? Especially the “Some Prominent Criticsms” section that begins on page 23.

http://public.econ.duke.edu/~bjc18/docs/Editor's%20Intro%20-%20Road%20to%20Serfdom.pdf

Bob Roddis said...

Let's not confuse Hayek with Von Mises:

http://mises.org/page/1431#Ch.8

Tom Hickey said...

Phil, Bob is a regular commenter here, a cross between our pet Austrian and our tormentor. Everyone needs a tormentor to keep them on their toes and ahead of their game. Whereas some of us see him as a ranter or even a troll, he sees himself as an evangelist doing his sacred duty of recusing those who have fallen prey to Keynesianism.

Bob's bottom line is a laissez-faire economy existing in a stateless aggregation of sovereign individuals who voluntarily associate based on their common assumption of propertarian individualism aka Rothbardian Libertarianism or anarcho-capitalism. See For a New Liberty: The Libertarian Manifesto. Proponents prefer the use of physical gold for its medium of exchange and store of value.

As a philosopher, I enjoy and appreciate Mises, Hayek, and Rothbard as thinkers. For the most part they thought out their positions and argued for them rather well. I just disagree with many of the assumptions — although I agree with some of them, as I believe, would many libertarians of the left.

Bob Roddis said...

Naturally, "y", who made this especially for me

http://www.flickr.com/photos/bob_roddis/8413813679/in/photostream

is in a fine position to determine who is and who is not a "ranter".

Bob Roddis said...

I also addressed some "Road to Serfdom" issues here today:

http://mikenormaneconomics.blogspot.com/2013/02/paul-krugman-despicable-me.html

Tom Hickey said...

Were Hitler and the Nazis Socialist or not?

Resoundingly not.

septeus7 said...

Quote from Lier Bob Roddis: "His “cobbling together of a coherent economic doctrine” was nothing more than work on the Austrian Business Cycle Theory for which he won the Nobel Prize*. The central concept of the entire Austrian School is the “knowledge problem”, the undisputed observation that knowledge is widely dispersed and is only in the heads of individual economic actors and can never be brought together by central planners or fiat money manipulating Keynesian bureaucrats. So, both the Nobel Prize and the recognition by the American Economic Review go directly to recognizing the central insight of the Austrian School. "


There is no Nobel Prize for economics Hayek won the "Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel" which was a PR stunt created by the Sweden Central Bank after being paid off ultra-rightwing Eurogarch fascists.

The only thing that winning Riksbanks PRizes proves is that central Bankers love Hayek
which should tell you something about the Austrian school.


See...http://exiledonline.com/the-nobel-prize-in-economics-there-is-no-nobel-prize-in-economics/

Bob Roddis said...

All I have ever said regarding Hayek and the "Nobel Prize" is that a critic of Hayek and the Austrian School should bother to first understand Hayek's positions and then attempt a refutation based upon such an informed understanding.

Further, according to Mr. Pilkington's podcast interview, Hayek's theory set forth in "The Road to Serfdom" has had an extremely broad impact upon public policy for decades (for the worse, according to Mr. P).

Therefore, one should learn and understand what Hayek is actually saying in order to attempt a refutation. Is that so wrong?