"I am firmly convinced that Keynes' knowledge not only of economics but also of modern economic history, particularly the 19th century was somewhat limited and I believe I knew Ricardo and, by the nineteen-forties when I discussed such matters with him, even Marshall more intimately than he did." (from a 1976 letter)
There's a common internet Austrian reaction: if they disagree with you, respond that they don't know economics or history!
Hayek is likely right when it comes to Ricardo. The fact is Hayek spent a lot of time with Ricardo. But the claim about Marshall strikes me as highly implausible. And even if we grant the point about Ricardo, which I'm more than happy to grant, it hardly follows that Keynes's knowledge of economics is "limited" in the way it's intended here (of course it's not "unlimited", but clearly Hayek isn't just trying to communicate the opposite of unlimited).
I'm obviously a Hayek fan, but that doesn't give him a free pass on positively goofy claims of this sort. Let's put some context on this. For better or worse Hayek got beaten like a rented mule in the macro debates of the 1930s. There's some good stuff in Hayekian macro. Lots of good stuff about the capital structure and relative price behavior during the business cycle. Great stuff. But as an explanation of the depression he was soundly beaten and he knew it. When Keynesianism came in for critique (as any good scientific theory will over time), it wasn't an Austrian critique. Hayek had been ecclipsed by other macro alternatives. And once again, Hayek knew it.
Of course he's going to lash out and say Keynes wasn't all that smart or that it only caught on becuase politicians loved it.
The Lonely Unicorn
6 hours ago