Video — Armen Alchian talks with Friedrich Hayek

Part I

Part II

F. A. Hayek on economics & his personal history, an interview with Axel Leijonhufvud

Robert Bork & F. A. Hayek discuss the Courts, Public Opinion and Unlimited Democracy

Watch it here.

Robert Bork and F. A. Hayek discuss the Cognitive Limitations of Experts, Natural Scientists & Sociologists

Robert Bork has Died

From the Boston Globe obituary:  “Bork credited reading F. A. Hayek’s The Road to Serfdom & Whittaker Chambers’ Witness for having ‘destroyed my daydreams about socialism’.”

Jeffrey Sachs attacks Keynesian Policies, favors Hayekian Explanations

In the Financial Times:

“There are three more reasons to doubt the Keynesian view. First, the fiscal expansion has been mostly in the form of temporary tax cuts and transfer payments. Much of these were probably saved, not spent.

Second, the zero interest rate policy has a risk not acknowledged by the Fed: the creation of another bubble. The Fed has failed to appreciate that the 2008 bubble was partly caused by its own easy liquidity policies in the preceding six years. Friedrich Hayek was prescient: a surge of excessive liquidity can misdirect investments that lead to boom followed by bust.

Third, our real challenge was not a great depression, as the Keynesians argued, but deep structural change. Keynesians persuaded Washington it was stimulus or bust. This was questionable. There was indeed a brief depression risk in late 2008 and early 2009, but it resulted from the panic after the abrupt and maladroit closure of Lehman Brothers.

There is no going back to the pre-crisis economy, with or without stimulus. Unlike the Keynesian model that assumes a stable growth path hit by temporary shocks, our real challenge is that the growth path itself needs to be very different from even the recent past.”

Robert Bork & Hayek on the Philosophical Blunders Leading Intellectuals to Renounce Our Shared Moral & Legal Principles

Russ Roberts talks with Don Boudreaux on Reading Hayek

Here is the link to the EconTalk podcast which includes extensive bibliographical links.

Great Hayek Quote on Expanding Money and Changing Networks of Relative Prices & Structures of Production

“It seems obvious as soon as one once begins to think about it that almost any change in the amount of money, whether it does influence the price level or not, must always influence relative prices. And, as there can be no doubt that it is relative prices which determine the amount and the direction of production, almost any change in the amount of money must necessarily also influence production.”

Prices and Production, p. 144

A Note on Why Hayek Took British Economists on a Trip with Hume & Cantillon

In 1931 Hayek took British economists on a landmark trip through the history of economic thought as an introduction to Hayek new account of intertemporal equilibrium and disequilibrium through the domains of money, credit and production across time. As Hicks and many other tell us, Hayek’s Prices and Production journal effectively transformed the art of economic science (see the quotes of Hicks found here, and check out this Google NGRAM for neutral money,forced savings for hint at the significance of Hayek’s lectures).

So, the question is, why did Hayek think it useful to take his British audience on this trip through the history of economic thought? Here’s my answer: Hayek went through this chapter in the history of economic for a specific purpose, to open access to perceiving a more profound relative prices shifting effect even that the Cantillon Effect, the Bohm-Bawerk Effect in production, where production processes are lengthened in the promise of superior output, and the Hayek Effect in money and credit expansion, where money and credit snowball upon one another in tandem with Bohm-Bawerkian investment expansion, a path perhaps accelerated by central banking and national government policies.

And Hayek’s account of this bit of the history of economic thought served a broader purpose, to open the door for them to a different picture of the operation of price signals — a stream or flow picture of the interaction of prices rather than a static, repetitive Paretoian general equilibrium or a static, repetitive Marshallian partial equilibrium analysis or a static, repetitive Fisherian circular flow quantity theory equilibrium.

With Cantillonian price adjustment you get path dependence effects, something impossible in Pareto and Marshal and Fisher, that is unique & bumpy and easily imperfect historical streams and *not* ahistorical equilibrium perfections.

This is exactly the causal factor with explanatory oomph when you combine Bohm-Bawerk Effects with Hayekian Effects and you take seriously the factors of time, divided understanding, dispersed knowledge, imperfect relative price signal networks, genuine uncertainty, etc.

Free for download — Hayek’s famous 1931 “Prices and Production”.

In the mail — The Great Persuasion by Angus Burgin

Just starting The Great Persuasion: Reinventing Free Markets since the Depression by Angus Burgin, the story of Hayek, Friedman and the Mont Pelerin Society.

Deck the Halls with Macro Follies – a Christmas Parody from EconStories

Follow FriedrichHayek on Twitter

Random Quote

The aim of assigning responsibility is to make man different from what he is or might be. — F. A. Hayek

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