Keynes vs. Hayek, Round 2

I like how at the end Keynes is pulled up to his feet and declared the victor (no matter how obvious a failure, the corrupt system keeps applying his theories). Then the Washington mandarins, Wall Street bigwigs and press all gather around him while the nerds come to congratulate Hayek. The press often implies that the Wall Street crowd loves Hayek and laissez-faire (“unrestrained markets” and all that), when in reality the moneyed political players support intervention since they are successful rent seekers and bailout recipients.

The key point that well-intentioned supporters of government (like most everyone in Europe) often miss is summed up in this phrase from Hayek:

“With political incentives, discretion’s a joke.
Those dials they’re twisting, just mirrors and smoke.”


For those who haven’t seen it, this is the first video:


And the real Hayek on Keynes:

File under Western Civilization, Decline of: Krugman wins Nobel

The market has been severely hamstrung for decades, and now that it is fainting from loss of blood, its vampire captors point to it and say, “see, markets need to be restrained or else they fail.”

I won’t actually comment on Krugman, other than to say that he is a socialist, and like many of his breed who do not actually implement collectivist scams (as opposed to Raines, Paulson, Mozillo, Congress, et al.) but provide intellectual support for them, he seems to have a soul, albeit a lost one.

Anyone who understands the principles of the market and defends them in public these days must feel the way I do: that we are simply narrating the decline. You can’t argue with history. You can just put it down as you see it, now in the hope of carrying a few embers of common sense through or out of the West as it enters some kind of dark age.

It is astounding that after recently observing Hitler, Stalin, Mussolini, Mao, Peron, Castro, Chavez and a hundred other tin-pot dictators destroy or hobble their nations through various forms of collectivism, the entire West is now leaping headlong in that same direction, with hardly a second thought. No credit is given to the principles of individualism, private property and freedom of contract, nor the great market economy that created the prosperity these societies are so eager to squander. The market has been hamstrung for years, and now that it is fainting from loss of blood, its vampire captors point to it and say, “see, markets need to be restrained or else they fail.”

This episode will play out over generations, and it will end with tens of millions dead and the end of the very civilization that codified respect for the individual.

The end of the Enlightenment means the end of freedom and the end of freedom means the end of centuries of increasing living standards, from food and health care, to travel and communication, to privacy and personal security.

The West is simply finished. It’s best hope is balkanization, in case any regional pockets of common sense remain, though I can’t think of any that are physically and culturally strong enough to withstand the violence to come. Perhaps Switzerland, for a while.