Friday, 28 April 2017

Hayek & utter stupidity

If you had a fraction of respect for Hayek, this statement of his will erase that.

“It may perhaps be pointed out here that it has, of course, never been denied that employment can be rapidly increased, and a position of ‘full employment’ achieved in the shortest possible time by means of monetary expansion–least of all by those economists whose outlook has been influenced by the experience of a major inflation. All that has been contended is that the kind of full employment which can be created in this way is inherently unstable, and that to create employment by these means is to perpetuate fluctuations.
There may be desperate situations in which it may indeed be necessary to increase employment at all costs, even if it be only for a short period–perhaps the situation in which Dr. Brüning found himself in Germany in 1932 was such a situation in which desperate means would have been justified. But the economist should not conceal the fact that to aim at the maximum of employment which can be achieved in the short run by means of monetary policy is essentially the policy of the desperado who has nothing to lose and everything to gain from a short breathing space.” (Hayek 1975 [1939]: 64, n. 1).


  1. That's a dream and we all know what happened in 1932 and what is going to happen in Trump's third tier under ^paradise.

    1. The pathetic thing is that Hayek didn't change his view later on in his life. "[...] I have since altered my opinion – not about the theoretical explanation of the events, but about the practical possibility of removing the obstacles to the functioning of the system in a particular way” (Hayek 1978: 206).
      Hayek's advice to the Weimar Government, had he been in a position to give it, would have brought the nazis to power. These gits blame hyperinflation on Governments spending without limit, as if all there is in life is endogenous will. They don't consider exogenous factors. The creditors of the Versailles treaty brought about hyperinflation on the Weimar republican with the war reparations they demanded. Not the particular sum itself, but timing and size of the payments.