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Happy Birthday Hayek!

Rizzo's comments are right on about Hayek vs. Keynes. But these positions have deeper roots in Say vs. Malthus. Still Hayek improved upon Say and Keynes developed the argument presented by Malthus.

I read this intellectual history as reflecting the distinction I make between "mainline" and "mainstream" economics. When we are talking about the "mainline" of economic thought, the distinctiveness of the Austrian school is less important, and the continuation of the mainline of thought from Smith and Hume, through Say and Bastiat, to Mises and Hayek, and Friedman and Buchanan on the self-regulating properties of the market economy, and in particular the role of prices in coordinating economic activities is the central focus. But when the discussion turns to mainstream economics, then the Austrian school and its uniqueness matters a lot. It is when methodology and method dictate entirely where the contributions lay. It is not so much the general point about self-regulation, but how you establish that proposition and what are considered acceptable answers to questions in economics.

The current crisis brings us back to the core question of self-regulating nature of markets. And ultimately back to Hayek vs. Keynes. Hicks once famously wrote that when the history of the 1930s in economics came to be written, the central characters would be Hayek and Keyens. In actual fact, however, it is not just the 1930s, it is the entire 20th century and beyond.

Happy Birthday to Hayek.

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