Lovecraft on Hayek and Robbins

I've mostly been studying for the GRE this weekend, but I took a break from that last night to read some more of Lovecraft's letters. Still no reference to Keynes, although he cites an awful lot of British figures that were deeply influenced by Keynes. Lovecraft is nothing if not well-read and well-informed (even though he puts a fairly eccentric spin on a lot of things).

I thought readers of this blog would be interested in a brief reference to Hayek and Robbins:

"But the real joke of course is, that all this isn't a matter of choice anyhow! Capitalism is dying from internal as well as external causes, and its own leaders and beneficiaries are less and less able to kid themselves. I'm no economist, but from recent reading I've been able to form a rough picture of the dilemma - the need to restrict consumers' goods and to pile up a needless plethora of producing equipment in order to maintain the irrational surplus called profit - which has caused orthodox economists like Hayek and Robbins to admit that only starvation wages and artificial scarcity could stabilize the profit system in future and avert increasing cyclical depressions of utterly destructive scope. Laissez-faire capitalism is dead - make no mistake about that. The only avenue of survival for plutocracy is a military and emotional fascism whereby millions of persons will be withdrawn from the industrial arena and placed on a dole or in concentration camps with high sounding patriotic names. That or socialism - take your choice. In the long run it won't be the New Deal but the mere facts of existence which will be recognized as the real and inevitable slayer of Hooverism. Nobody is going to "destroy the system" - for it has been destroying itself ever since it evolved out of the old agrarian-handicraft economy a century and a half ago." [letter to Catherine L. Moore, Feb. 7, 1937]

As he says - certainly a "rough picture" - but I was somewhat impressed that he identified the LSE position with respect to consumption and investment. Consider this passage from a 1932 letter to the editor by Hayek and Robbins recently posted by Mario Rizzo:

"On the question whether to spend or whether to invest our position is different from the signatories of the letter which appeared in your column on Monday [by Pigou, Keynes, and various other Cambridge economists]. They appear to hold that it is a matter of indifference as regards the prospects of revival whether money is spent on consumption or on real investment. We, on the contrary, believe that one of the main difficulties of the world today is a deficiency of investment - a depression of the industries make for capital extensions etc, rather than of the industries making directly for consumption. Hence we regard a revival of investment as particularly desirable."

I extended the selection from the Lovecraft letter beyond the mention of Hayek to highlight Lovecraft's position on fascism. It's been very encouraging to read his later letters where he has unequivocally turned against fascism and the Nazis (and for that matter, he doesn't talk about racial inferiority as much either - although I'm guessing he still maintained those views). In the early thirties he treated the Nazis as fascinating curiosity. He never liked them per se. He always talked about how crude and ultimately dangerous Hitler was. But he would regularly allude to the fact that they were on to something because society could not undergo a Communist revolution but it had to be more forcefully commanded. By '35, '36, and '37 that seems to have faded away completely. In the early thirties he would use "Marxist" and "Communist" as an epithet for leftists who he thought dangerous. Now, in '36 and '37 he uses "fascist" and "Nazi" as an epithet for right-wingers. He makes references to "Wall Street Nazis", for example. The early romance with fascism has faded, and I have to say I'm relieved. Lovecraft has grown on me. I know he died eighty years ago, so even if he had a soft spot for Hitler until the end it's not like that should really affect me, and it's not like that would change how fascinating and brilliant he was. But it is nice to know the brief infatuation did seem to come to an end.