A great video on the comparison of Keynes and Hayek has hit the internet for over a year but is still very refreshing. It is called "Fear the Boom and Bust", a rap anthem. In a humorous fashion, it contrasts the macroeconomic views of Keynes and Hayek. Keynes and his idea of "animal spirits" won the day, but Hayek and his ideas surrounding excess credit expansion as the driver of swings in business cycles has received a revival.
No one could compete with the debating skills of Keynes. He was a master of language . Hayek, a non-native English speaker with a German thought process, could not win he popular debate. Low interest rates coupled with excessive credit will lead to the misallocation of resources which, in turn will lead to bad decisions and economic failure.
No one could compete with the debating skills of Keynes. He was a master of language . Hayek, a non-native English speaker with a German thought process, could not win he popular debate. Low interest rates coupled with excessive credit will lead to the misallocation of resources which, in turn will lead to bad decisions and economic failure.
The past instability of the market economy is the consequence of the exclusion of the most important regulator of the market mechanism, money, from itself being regulated by the market process.
We should listen more to Hayek but unfortunately the key decision-makers are at the very place that controls credit, the Fed. It is unlikely that the fed will be willing to give up their control of the process.
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