Hayek and Keynes debating in Wonderland(Read article summary)
Classic economists John Maynard Keynes and Friedrich August Hayek have a spirited policy debate, in the style of Lewis Carroll.
John Tenniel / Lewis Carroll's Alice's Adventures in Wonderland / 1865
Hereâ€™s what Alice might have recited to the Caterpillar, had Charles Dodgson been a 20th century economist of sorts:
You are old, Maynard Keynes, and your theoryâ€™s askew,
Itâ€™s easy for one to see through it â€“
Yet everyone thinks that youâ€™ve said something new.
Just how did you manage to do it?
In my youth, said the sage, I dabbled in stock,
For serious profits contesting,
And it wasnâ€™t too long but I saw what a crock
Was the classical take on investing.
But my colleague, youâ€™re making a dreadful mistake
By invoking such wild aggregation.
Why, these quantities hide what is really at stake â€“
Doesnâ€™t that give you some aggravation?
Why, dear Hayek, itâ€™s simple! Investors will quail,
And weâ€™re stuck with a dearth of employment.
With liquidity valued, consumption is frail
And needs governmentâ€™s clever deployment.
You are wrong, my dear Keynes, and annoying me so
With your markets that fail by assumption.
You forget the incentives for knowledge to flow â€“
Do you think all investors lack gumption?
At Cambridge, Keynes countered, I sought out the Good,
And nowhere in commerce did find it.
Economy never could work as it should
If there werenâ€™t public servants to mind it.
Youâ€™re mistaken, my friend, and a little naĂŻve
Youâ€™re assuming that planners canâ€™t sin, right?
But even if sainthood you thought theyâ€™d achieve
Pray, how would they learn such good insight?
In my youth, Keynes replied, at my fatherâ€™s behest
I learned from the good and the mighty.
With proper intentions, the brightest and best
Can be certain of getting it right, see?
Youâ€™re a fox, wily Maynard, and slippery too,
Your justifications wide-ranging.
So, how can I possibly deal with your view
If your tracts for the times keep a-changing?
My secret, dear Hayek, is having appeal
To both rulers and dull academics.
Youâ€™re quite out of touch, sir! You donâ€™t have the feel â€“
You think theoryâ€™s not helped by polemics!
But enough of your questions! Iâ€™ve troubles my own:
My disciples, they donâ€™t understand me.
Their naĂŻve mathematics! It just makes me groan.
Still, Iâ€™m famous, a sage, and a grandee!
The Christian Science Monitor has assembled a diverse group of the best economy-related bloggers out there. Our guest bloggers are not employed or directed by the Monitor and the views expressed are the bloggers' own, as is responsibility for the content of their blogs. To contact us about a blogger, click here. To add or view a comment on a guest blog, please go to the blogger's own site by clicking on the link above.