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At about 10 or 11 minutes John Papola has an interesting bit on how Murray Rothbard and David Friedman answered Hayek’s challenge envision an inspiring liberal utopia. But the whole thing is interesting. Papola is one of the creators of the Hayek vs Keynes rap videos. Reddit Replies from John Papola from John Papola on Vimeo.
Part IV of Hayek’s The Pure Theory of Capital is the chimeric “unwritten” 2nd “volume” of Hayek’s Pure Theory, the monetary part that goes beyond the “barter economy” and considers the phenomena of interest and production coordination and dis-coordination when money and credit and other “non-barter” market phenomena are brought into the picture. In several places Hayek makes all of this very clear. In the beginning of Part IV, Hayek plainly marks out the difference between the “pure barter” economics of Parts 1,2 & 3 and the “money economy” economics of Part IV. “THE task of the first three Parts of this book has been to show, by the same general method as is used by equilibrium analysis to explain the prices of different commodities at a given moment, why there be certain differences between the expected prices of the products, and why these differences will stand in a certain uniform relationship to the time intervals which separate the dates when these prices are paid .. Although a full discussion of the monetary problems to which the existence of the” real” rate of interest gives rise lies outside the scope of the present book, it would hardly be appropriate to leave our subject without giving a somewhat more definite indication of how the rate of interest we have been discussing and the money rate of interest are related. At this point we can give no more than an outline of the answers to the main problem. A full discussion of the whole complex of problems involved would require another book of about the same size as this one .. As has been explained earlier in this volume, its task is to lay the foundations for the treatment of these problems, not to discuss them in any detail. And we shall confine ourselves in this final Part to the task of showing how these theoretical foundations can be used for the elucidation of certain salient points in the discussion of these more complex problems. We shall not attempt to follow all the possible complications or to explore the consequences of the different possible assumptions with any microscopic accuracy.” And Hayek makes it plain that a draft of his Part IV (i.e. the spuriously presumed “missing 2nd volume”) was produced well before the final completion of the The Pure Theory of Capital in late 1939 / early 1940. The onset of the war and the difficulty of securing paper and access to a printer during war-time placed serious constraints on the size of publication Hayek could hope to see into print, his draft already constituted a very long book with lengthy specialized appendices, including a extensive mathematical appendix. And, indeed, the mathematical appendix and most all of the rest of the appendices were cut in order to satisfy the resource-use restrictions demanded for war-time publication. Hayek explains this in the Preface of his book, giving an account of how the war-time situation shaped the final form of the “money economy” economics section of his book: “The circumstances of the time have now enforced a further curtailment of the original plan of the book. The final draft was in an advanced state of completion when the war broke out, and it became clear that, if I could hope to publish the book at all, I must not delay too long nor make it unduly large. The result of this is that Part IV has become rather more condensed and sketchy than I had intended .. ” Up Next: More on Part IV of Hayek’s The Pure Theory of Capital.
AUDIO: NBC Radio Dramatization of F. A. Hayek’s “The Road to Serfdom” – Episode 96 of “Words at War”NBC Radio’s “Words at War” – The Road to Serfdom, broadcast May 15, 1945. Be patient. The broadcast begins at about 00:15. Read a backgrounder on “Words at War” here.
The first thing to say about this book is that much the most of it is a fantasy. But there are bigger problems with the book that that. Nicholas Wapshott grew up as a British journalist and his approach to truth and objectivity and getting the story right unfortunately reflects that worst of that dubious background. The ethic Wapshott brings to material is the ethic Mark Twain brought to the Western story — reality never gets in the way of the demands of the tale he is determined to tell. But it’s even worse than that. The text is marred by all sorts of basic factual mistakes: John Bates Clark, we are told, was a German and a socialist; lecturers at the LSE who cut their teeth studying with British or German economists are described as “Hayek pupils”; Keynes is credited as the originator of econometrics; John Hicks is characterized as an unknown economist made famous by his work on Keynes; Thomas Wolfe’s “Me” Decade is transplanted from the 1970s to the 80s & 90s; GOP efforts to modestly slow the growth of Federal spending in the 1990s are described as “massive cuts” … these items are essentially picked at random — I could extend the list indefinitely. And, irritatingly, a number of the footnotes and even short passages in the text read like a high school students cut and past borrowings straight out of Wikipedia. (I won’t embarrass the author by providing examples here, but anyone with a copy of the text can check for themselves, simply compare the short bios of important figures in the footnotes against what is written in Wikipedia.) More later. For now I leave you with this from economist Herbert Gintis’ Amazon review of the book: “Read this for fun, dear reader, the same way you read People magazine. Don’t think you will get some deep insights in the the nature of modern political economy. You won’t.” And this from another Amazon reviewer: “I picked up this book in the hope that it would clarify the issues between the so-called Keynesians and the conservatives who frequently cite Hayek. Unfortunately, beyond a few oft-repeated cliches, there is no explanation in any detail of the similarities and differences between the apparently competing views. Technical terms are scattered throughout with little or no attempt to include the layman. We are told about sexual preferences, styles of dress, and the reactions of various groups to presentations, but the economic and philosophical content of this book is very weak. Who was the intended audience?”
From a letter to Walter Lippman written in 1937:
From Ben Jackson, “Freedom, the Common Good and the Rule of Law: Lippmann and Hayek on Economic Planning,” Journal of the History of Ideas, 73 (2012), forthcoming. Quoted and discussed by Mario Rizzo in a thoughtful blog post.
A new collection of essays on Hayek’s work in neuroscience, psychology, and the philosophy of science and mind. Table of contents and abstracts at the link. Of special interest: “Hayek in Today’s Cognitive Neuroscience” by Joaquín M. Fuster Abstract:
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