John Maynard Keynes Knew What Occupy Wall Street Tells Us Today: "Banks and bankers are

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http://www.alternet.org/economy/153034/john_maynard_keynes_knew_what_occupy_wall_street_tells_us_today%3A_%22banks_and_bankers_are_by_nature_blind.%22

John Maynard Keynes Knew What Occupy Wall Street Tells Us Today: "Banks and bankers are by nature blind."


Friedrich August von Hayek was a charming and gracious man who accepted my invitation to lunch in Salzburg when I was 23 years old. But even Milton Friedman called his price theory “very flawed” and his capital theory “unreadable.” He was denied a post in economics at the University of Chicago, and his reputation today rests largely on The Road to Serfdom, a warning against Soviet-style central planning with which Keynes felt free to declare “deeply moved agreement.”

On policy matters Hayek was no extremist and often aligned with Keynes. As Professor Walter Block points out in the Journal of Libertarian Studies, he agreed that central banks should fight unemployment, he favored fair labor standards and “an extensive system of social services;” also antitrust and policing against fraud and deception and state-sponsored health insurance; what we might call a “public option.” All of this drove Professor Block to declare in despair that Bill and Hillary Clinton should have cited him in their campaign for health care reforms. None of this came from Hayek's own economics: as Block wrote, the Hayek of 1944 “stands condemned by the Hayek of 1931 and 1933.” The contrast between Hayek's economic ideas and his policy views is for our friends on the other side to explain if they can.

Unlike Hayek, John Maynard Keynes was a policy man: fully engaged from the Great War and Treaty of Versailles through the Depression and World War II to Bretton Woods. His theories and his policy views developed side by side.