4 comments to GRAPH: New Home Sales vs Single Family House Starts Built for Sale
Greg, I found the article that has the Friedman quote about “Pure Theory” that I have sometime posted. It is from Garrison’s “Hayek and Friedman: Head to Head”:
“Friedman’s account of his differences with Hayek puts the “fine points of
abstruse theory” into perspective: “I am an enormous admirer of Hayek, but not for
his economics. I think Prices and Production (1935) is a flawed book. I think his
capital theory book [The Pure Theory of Capital (1941)] is unreadable. On the
other hand, The Road to Serfdom (1944) is one of the great books of our time””
(Ebenstein, 2001, p. 81)
Ebenstein, Alan. (2007) Milton Friedman: A Biography, New York: Palgrave Macmillan.
_____ (2001) Friedrich Hayek: A Biography, New York: St. Martin’s Press.
Friedman regularly taught Hayek’s “The Use of Knowledge in Society” as part of his graduate price theory class, and embedded Hayek’s view of price signals into the heart of his account of economics found in _Free to Choose_.
It’s clear from private letters and remarks here and there that Friedman had no idea what Hayek was up to recasting economics as an explanatory science.
Friedman and his wife worked under people who didn’t understand and were fiercely hostile to Hayek & Bohm-Bawerk’s work in capital theory and macroeconomics.
But other than these substantanceless attacks on Hayek, we have nothing substantive from Friedman showing that he actually competently understands Hayeks work or has an actual competent criticism of it. It’s all ad hominen and adds nothing substantive to the discussion, unfortunately.
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I see that I posted my comment on the wrong article. Sorry. If the Friedman quote is accurate, it’s very strange. Friedman was obviously an intelligent man and I won’t call him a liar about having read Pure Theory. But I’m no where near as intelligent as Friedman was and I have read it three times. I think it is brilliant! The only way I can reconcile Friedman’s stupid comment with his obvious intelligence is to assume that he tried to shoe horn Hayek into his on monetary nonsense and couldn’t do it. He could have been more honest and just said that he didn’t understand the book.