It would be very hard to explain the current recession using Hayek’s macroeconomics in fewer words than has been achieved by Hayekian macroeconomist Brad DeLong:

After the most recent downturn, however .. things have been different. The downturn was not caused by a liquidity squeeze. The Federal Reserve cannot wave is wand and return asset prices to their pre-downturn configuration. The entrepreneurial problems of recovery are much more complex: not to recall what it used to be profitable to produce but rather to figure out what new things it will be profitable to produce in the future.

At one time the leading experts on Hayekian macroeconomics in Britain were future top officials in the Labour government. And in that country still today many of the leading economists and political theorists influenced by — and keen students of — the work of Hayek are leading figures in the Labour party. Karl Popper, who tells us he learned more from Hayek than any other figure excepting only Taski, has a life long social democrat. In American terms, even uber-Hayek fan Margaret Thatcher could be listed as left of the American center.

So there is nothing out of the ordinary in the whole scheme of things for partisan Democrat Brad DeLong to understand the world in Hayekian macro terms. And note well. It’s standard issue today for top Democrat economists to sing the praises of Hayek’s economics. And even Barack Obama extols the two most controversial claims Hayek ever advanced in economics and political economy.

This entry was posted in Boom & Bust, Brad DeLong. Bookmark the permalink.


  1. thanos says:

    karl popper was not a social democrat. he was a classical liberal like hayek. read the “open society and its enemies” the classic book by karl popper.

  2. Greg Ransom says:

    thanos — I’ve read the book. Popper never gave up on some form of social democracy. Note well — social democrats in Germany formally renounced the Marxist socialism of its early founders in the early 1950s. Concepts and words are evolving historical individuals — the term and concept “social democrat” doesn’t have a fixed meaning and its use and significance has changed over time.

  3. thanos says:

    he was never a socialist or a social democrat! when he was young he was a marxist but he later changed his mind because he realized that marxism had become a dogma and was unfalsifiable (unscientific)

  4. anon says:

    The claim about Popper being a socialist is dubious, in light of this quote of his:

    “I remained a socialist for several years, even after my rejection of Marxism; and if there could be such a thing as socialism combined with individual liberty, I would be a socialist still. For nothing could be better than living a modest, simple, and free life in an egalitarian society. It took some time before I recognised that this is no more than a beautiful dream; that freedom is more important than equality; that the attempt to realise equality endangers freedom; and that, if freedom is lost, there will not even be equality among the unfree.”

    (Ref: Unended Quest – Chapter 8: A Crucial Year: Marxism, Science and Pseudoscience)

    By the way, Greg – you should refrain from applying labels e.g. “Hayekian”, “social democrat” too loosely. Some of whom you have applied the “Hayekian” epithet only concur with Hayek on certain issues. Stalin probably had some common ground with Hayek too, but that doesn’t make him a Hayekian in any meaningful sense of the word.

Comments are closed.