Often you'll hear the argument that whether Keynes was right or wrong, he opened the flood-gates to politicians who destroyed fiscal sanity in his name. Buchanan makes this argument in Democracy in Deficit, and recently it's been repeated by Peter Boettke and Don Boudreaux.
It's an absurdly weak line of reasoning, and I want to illustrate why by using the same logic with Hayek - not because I think it's a legitimate case against Hayek (unlike Boettke and Boudreaux with Keynes, I personally think Hayek is an extremely high-caliber economist) but to illustrate how ridiculous the argument sounds:
So let's start by simply assuming that Hayek's great - that paying attention to Hayek will not lead a government astray and will not pile up an unmanageable debt. Hayek, on his own, is fine. But that's not really important. What's important is what Hayek and Hayekian economics gives politicians the license to do. Many politicians over the years have said that they are inspired by Hayek. Thatcher and Reagan are obvious politicians that fit this - both are symbolic of their era and of course have many allied politicians who felt the same way about him. More recently Paul Ryan has listed Hayek as a major influence, and has quoted him (here and here), including at CPAC - a major Republican Party venue. The same goes for Senator Rand Paul, and obviously his father as well. When was the last time Keynes was listed as a top intellectual influence for a President or for a Prime Minister? When was the last time Keynes was promoted at a Democratic Party function? I'm not sure if it's ever happened. You also have Hayek trumpeted by Glenn Beck and promoted on his show. My assertion - which I don't think any honest person looking at the evidence can reject - is that if you think Keynes has set a tone for any set of politicians (whether they are faithful to him or not), then Hayek has obviously set an even more substantial tone for another major set of Republican politicians (whether they are faithful to him or not). Anyone who wants to claim that Keynes gave politicians a license to do what they do has to admit that Hayek, as a major inspiration for a large swath of conservative politicians, has given at least as much license and therefore ought to be judged by the same standards that Buchanan, Boudreaux, and Boettke judge Keynes by in this regard.
So what can we lay at Hayek's feet for the license he gave politicians? Massive military buildups. Large and growing deficits during recessions as well as boom years. A complete lack of will to deal with entitlements or propose a long-term budget solution.
No one who lays these things at Keynes's feet can neglect laying them at Hayek's feet as well. If anything the case is stronger. Ron Suskind's recent book on Obama reveals to us that the president was vehemently opposed to the major Keynesian voices on his economic team. This is Obama - the guy that actually did stomach a modest stimulus two and a half years ago. If this guy has been given license by Keynes, then certainly we can put the Reagan legacy and virtually all post-Reagan Republicans at Hayek's feet.
I propose something different: we stop honoring this argument as legitimate or logical. I appreciate James Buchanan a great deal. I've said here before I was thoroughly impressed when I was first assigned to read him as an undergraduate. I still am. But James Buchanan did a very poor job thinking about the legacy of Keynes, and unfortunately his arguments have been reproduced widely.
Krugman has made a similar argument about Hayek to what I make above. The difference between Krugman and myself is that he thinks it's actually a legitimate argument against Hayek and I don't. Boettke and Boudreaux seem to understand the problems with this line of argument when it comes out of Krugman's mouth. But when it comes out of Buchanan's mouth about Keynes and when they repeat it themselves, they are completely oblivious to how illogical they sound. Foolishness gets passed off as wisdom. This argument really has to stop. I'm getting to the point where I am having a hard time taking people seriously who make this argument.
If you have a problem with politicians - criticize politicians. Don't bring the bone you have to pick with Keynes into it unless there's a much clearer connection than this one.