I'm posting this against my better judgement... every time I touch on anything out of Papola the discussion seems to degenerate at a faster than average rate into pointlessness. But this introduces somewhat new material, so what the hell.
The issue at hand is a 1998 review by Brad DeLong of a book by James Scott about the problems with central planning particularly as they relate to the importance of local knowledge, which Papola mentions in this post. The local knowledge point is one that lots of people have made but of course one very famous person who made this point was Hayek, and DeLong recognizes this. Indeed in the review DeLong takes Scott to task for not mentioning Hayek more in the book. If you want a treatment of the role of very local information in social decision making and allocation, the best place to start is certainly Hayek. Papola follows this link with the statement "I think he [DeLong] was less Keynesian then than now."
I don't understand what makes people like Papola tick. I don't understand this tendency where people imagine that there has to be stark battle lines drawn in intellectual life. DeLong is Hayekian in this 1998 review so he clearly can't be Keynesian, according to Papola. What exactly does Papola think we all think? Does he think that Keynesians are generally opposed to a Hayekian outlook on the economy? I suppose he might actually think that, and I just don't understand it. Do I (and does DeLong) disagree with Hayek? Sure, on certain things. Certainly a few policy areas. Probably some methodological points. A world where there is no disagreement with Hayek is as bizarre as Papola's world where there is no agreement. And in order to generate a stark contrast between "Hayekian" ideas and "Keynesian" ideas Papola has to erect this version of Keynes that is purged of the price mechanism, purged of market efficiency, purged of free market orientation, purged of liberalism, and purged of any disaggregated conception of economics.
In other words, to get "Keynesian" and "Hayekian" to be concepts that repel in his mind, Papola reinvents Keynesianism.
I don't know - maybe life really is this stark and oppositional. I sure hope not. I don't think so. I'd like to keep my Hayek and my Keynes. The first video was pretty good (weak in expositing the point of Keynesianism, but good) because it focused on a very real point where saying you're both Hayekian and Keynesian is a lot harder: the macroeconomics of the business cycle and macroeconomic policy. The broader scope of the second video is precisely what revealed the true paucity of Papola's vision of this "fight" (what an utterly bizarre word to describe the relationship of the thought of these two tremendous thinkers). As I've said elsewhere - I'm positively disposed towards Hayek and positively disposed towards Keynes, but when you present a narrative where I'm turned off by the "Keynes" voice and find myself in agreement with the "Hayek" voice, something is very wrong.
Kumbaya, "can't we all just get along", yadda yadda yadda. I don't mean to be too pie in the sky, but I don't want to invent reasons to fight either.
Thursday, May 19, 2011
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The new video is strange for me, as well. I enjoyed it very much; I think the economics is quite good. However, I can't really get behind either Keynes or Hayek in the video.
ReplyDeleteWoolsey, Sumner, Beckworth, Yeager, Rowe, Selgin, Horwitz, and White have convinced me of monetarism (or so-called quasi-monetarism). I also think Hayek was actually closer to the quasi-monetarist position than most of his fans realise, but that is another story.
This puts me in a peculiar situation. Although I oppose fiscal stimuli, I do not oppose monetary stimuli when there is an excess demand for money (supposing there is a central bank). Keynes has some good arguments on these points in the video and Hayek never really addresses them. Instead Hayek makes other good points about the dangers of an excess supply of money and its propensity to create a malinvestment boom. In my opinion, these two stories of the recession can be reconciled.
"I don't know - maybe life really is this stark and oppositional."
ReplyDelete1)A post about DeLong where you imagine intellectual life not to be stark and oppositional. DeLong has built an internet career on being a rude little puke to commenters (expunge much?), other economists (lyingest economist ever), and Republicans (liars, idiots.)
"The broader scope of the second video is precisely what revealed the true paucity of Papola's vision of this "fight" (what an utterly bizarre word to describe the relationship of the thought of these two tremendous thinkers)."
2)It's a metaphor about not just two economists, but two very different groups of people. Cato and Reason on one side... C.A.P. and the New Republic on the other.
"As I've said elsewhere - I'm positively disposed towards Hayek and positively disposed towards Keynes, but when you present a narrative where I'm turned off by the "Keynes" voice and find myself in agreement with the "Hayek" voice, something is very wrong."
3)It's only in mini-movie form that the reality of Keynes' and his followers' visions comes through to you. It's the power of great hip-hop.
This is precious. You are still upset over a rap video. I'm sure you will come out and deny that you are upset.
ReplyDeleteI don't think sandre read the above post.
ReplyDeleteThe problem here is that even when you have Brad DeLong criticizing others for not giving due credit to Hayek, it is strange to reduce DeLong to being some kind of an anti-Hayek proponent of industrial policy and state control.
What is amazing is that Brad DeLong's very old blog posts and the like from the 1990s display a very strong opposition to such progressives and members of the American Left as Noam Chomsky. Indeed, DeLong presumably did not like being derided as a New World Order, establishment cronyist "Neo-Liberal" by the members of the anti-Clinton Left, all simply because DeLong didn't have a completely unfavourable view of the private sector and international trade and investment. Eventually, he seems to have adopted neoliberal as a proud label, and in one recent speech started with, "Allow me to say, as a card-carrying neoliberal..." Such was once the insult of choice against Washington Consensus members, such as DeLong.
(The same could be said for Paul Krugman, who had a lot of criticisms for the anti-trade, anti-globalization anarchists in his 1990s articles in Slate.)
All I am saying is that the rift between people who know economics, such as Keynes and Hayek, is much smaller than the rift between the former and people who don't know economics, such as Keynes and Naomi Klein.
PS: Did you guys know that one corporate lobbyist and protectionist advocate, Ian Fletcher, called Joseph Stiglitz a man with a libertarian bias?
sandre -
ReplyDeleteI'm amazed at how oppositional Papola's view of the world is, and the motivation for the post was a Forbes magazine reference to a book review, not a rap video.
sandre, libertarians cannot both make all sorts of posts about how Papola's video is the greatest thing since sliced bread and really fantastically explains macro, and then, when someone complains about inaccuracies, protest, "Oh, it's just a rap video!"
ReplyDeleteGentle query.
ReplyDeleteHave you read the book in question? I have. It is masterful (whether it mentions Hayek or not). It is one of the many intellectual sources that sent me headlong towards libertarianism. Most academics can only wish they had written something as intellectually rich as the work of James Scott (in a hundred years Scott will remembered after all). _Weapons of the Weak_, _Seeing Like A State_, _The Art of Not Being Governed_ are all quite fantastic works.
"And in order to generate a stark contrast between "Hayekian" ideas and "Keynesian" ideas Papola has to erect this version of Keynes that is purged of the price mechanism, purged of market efficiency, purged of free market orientation, purged of liberalism, and purged of any disaggregated conception of economics."
Well, that was Keynes' ultimate agenda in a nutshell.
Lee Kelly,
Hayek talks at several points in his works about how monetary policy is far less dangerous than fiscal policy to freedom. Indeed, he mentions it briefly in _The Road To SerFdom_ in the chapter on "Security and Freedom" (the second best chapter after "Planning and Democracy").
Gene Callahan,
Some libertarians can think it is the former and some libertarians can think the latter (though I've honestly never seen the former - sounds like a strawman to me).
Daniel,
ReplyDeleteFrom what I can tell, you don't know a lot about Hayek.
Anyway, as Popola says repeatedly, the Keynes vs. Hayek isn't really a fight between Keynes and Hayek so much as a fight between those who have followed in the wake of both of them (then again, Hayek and Keynes weren't always kind to one another either). Let's not create some artificial agreement here; Hayekians and Keynesians are at cross purposes one with the other and that is always revealed in the way we think about the world and policies we pursue and defend.
Gary -
ReplyDeleteOn the book in question - I haven't read it but I did one of those sit in a used bookstore and skimmed it heavily for about an hour things and remember being very impressed several years ago. I knew exactly what book they were refering to, but haven't read it.
re: "Well, that was Keynes' ultimate agenda in a nutshell."
This is news to me - and I've read lots of Keynes cover to cover.
re: "From what I can tell, you don't know a lot about Hayek."
I know less than I'd like to, but what exactly do you find wanting? Lots of Hayekians disagree on Hayek too, let me point out. Lee is convinced by the Selgin/White view. Perhaps that view is right. But it's not the uncontested perspective. My point is only to say that when you write "you don't know much about Hayek" you sound a little ignorant of the issues involved and a little condescending. What exactly do you dispute in what I've said about Hayek?
re: "Hayekians and Keynesians are at cross purposes one with the other and that is always revealed in the way we think about the world and policies we pursue and defend."
OK, so you agree with Papola. I think you're dead wrong.
Daniel,
ReplyDeleteKeynes' ultimate objective was to create a non-profit seeking society where greed, etc. were banished from human consciousness (greed being a terribly introduction into the West by Jews). In such a society how would market efficiency, the price mechanism, etc. work? Keynes had some very radical ideas about the nature of future human existence; most of it opposed to classical liberalism and certainly not in line with the way Hayek thought of societal change (however much that view was tweaked over time).
I'm a Hayekian (though I don't agree with everything he has to say - he's too interventionist IMHO policy wise - though he became less interventionist as he grew older - compare "The Constitution of Liberty" with later works) and the heart of the Hayekian way of thinking regarding the state are these three questions "Who plans?"; "Who much does the state plan if state is planning?"; "How are the plans aimed if they are by the state (are they aimed at particular individuals or groups or are they aimed anonymously?" Keynesians just aren't interested in these questions - they are not central to their way of thinking.
Gary:
ReplyDelete"Some libertarians can think it is the former and some libertarians can think the latter..."
So given some think the former, those who think the latter should understand why Daniel might address it, no?
"(though I've honestly never seen the former - sounds like a strawman to me)."
So rather than take a wee look around this place called the Internet, you choose to accuse me of dishonesty.
"Papola's second masterpiece... brilliantly done" -- Mises Institute
"the lyrics provide a pretty accurate picture of the two different ways of dealing with a recession." -- Steve Horwitz, The Freeman
"this video is great." -- Jeff Tucker
"the music and lyrics are terrific" -- teachingeconomicfreedom.com
"fantastic new rap video" -- Geoffrey Allan Plauche
You can find lot's more like this if you just look.
Gene,
ReplyDeleteWhile I still don't accept the morality of Keynesian prescriptions, I have come to learn quite a few things about Keynesianism, thanks to DK.
I didn't read his whole blog post. I was turned off in the first paragraph itself. Daniel pretends that he has this long blogging history between him and Papola - one is lead to believe these exchanges degenerates into exchange of some uncouth vitriol.
No such history exists. It's all in DK's mind and mind only.
DK plays victim like this from time to time, victim of some unfair characterization - like central in that "touchy" rap music. Yet, he wouldn't hesitate for one second before calling libertarian side - pointless pain caucus. If you object - his response is "if you can't handle it, get out of the discussion". This get out of discussion cure applies much better to Daniel and other Keynesians, there shouldn't be any debate about whether Keynesian (not Keynes alone) had and prescriptions had inkling for central plans, it only varies in degrees. If he doesn't like it, he should just get out of the discussion, and you should do the same.
And of course, none of those quotes refer to the video as great macro. Nope, in Gene's world the video would objectively qualify as great if it were infallible and no use of poetic license was made!
ReplyDelete"you choose to accuse me of dishonesty."
What else would boiling down Horwitz's entire blog post on this matter to a soundbite, so you can sustain your straw man be called?
"this video is great." -- Jeff Tucker
OH GOD NO! ANYTHING BUT THAT! ONLY A LIBERTARIAN COULD SAY SOMETHING SO FULSOME!
It pains me to agree with GG, but he's pretty spot on here.
ReplyDeleteAnd to call Selgin a monetarist, or even a quasi-monetarist is . . . idiotic? Let alone what you've done with the rest of your list.
re: "Yet, he wouldn't hesitate for one second before calling libertarian side - pointless pain caucus."
ReplyDeleteSandre, I have never called libertarians the "pointless pain caucus" as I recall.
Prateek -
ReplyDeletere: "The problem here is that even when you have Brad DeLong criticizing others for not giving due credit to Hayek, it is strange to reduce DeLong to being some kind of an anti-Hayek proponent of industrial policy and state control."
Precisely. This is exactly my point. Recently there have been some disagreements over Hayek's macroeconomics. A lot of Austrians or libertarians see this and presume there's some kind of groundswell of opposition to everything Hayek said, or some sort of view that Hayek isn't an important and laudable thinker.
I didn't call Selgin monetarist. I said he had helped convince me of so-called quasi-monetarism. I did not say that was his intent.
ReplyDelete