It’s been a long time since Henry Hazlitt served as the lead editorial writer on economics for the New York Times-a role that, ironically, is filled today by an intellectual heir to Hazlitt’s biggest philosophical enemy, John Maynard Keynes. That’d be Paul Krugman, the former academician who won a Nobel Prize for his defense of free trade and now uses that cover to lend legitimacy to his more wacky, neo-Keynesian ideas.
So given the Times’ about-face on economic matters from one of the true legends of Austrian economics to the world’s most prolific anti-Austrian, it’s always interesting to see the rag run a story about any leader of the Austrian School. Today’s column highlights the impact of Nobel Laureate Friedrich Hayek on modern economic theory as well as political thought.
I’ve always contended that a well-informed political philosophy should flow from a thorough, consistent economic theory and that economic theories shouldn’t be invented in order to accomodate political trappings. And, if one looks at the major schools of economics, it seems to hold that the majority of each school’s followers tend to gravitate toward respectively similar political leanings.
That’s why it’s unsurprising that discussion about any particular economist’s impact on popular culture tends to focus on political movements and not the more elevated economic theories that undergird such movements.
Readers of common periodicals like the New York Times, for instance, are likely not inclined to develop an acute understanding of major Austrian tenets like subjective valuation, methodological individualism or the economics of knowledge. They’re probably even less likely to be familiar with the theoretical objections to general equilibrium analysis. But these concerns do result in the conclusion, for most Austrians, that government intervention in the economy generally yields a sub-optimal production level and lower living standards for both individuals and the society which they compose.
That conclusion means that Austrians, more than followers of any other school of economic thought, tend to favor unhampered markets. And so, these economic theorists, perhaps appropriately, become heroes for political movements that favor the liberty and autonomy of individuals over aggressive state coercion or interference.
In other words, Austrians are heroes of the Tea Party movement.
That’s the aspect of Hayek’s impact highlighted by today’s article in the Times. With Paul Ryan’s nomination to the Republican ticket, the author believes this is Hayek’s moment-even if Ryan and other politicians don’t quite understand Hayek completely.
What’s more, it’s not just the Ryan nomination that signals Hayek’s moment. There’s also a major grassroots effort among the Tea Party faithful dedicated to bringing more Hayekians to Washington. As the author says:
Several activists and groups, including FreedomWorks, say they hope to turn the inchoate anger of the Tea Party into a focused pro-Hayek movement that would either take over the Republican Party or create a new one. That is a huge task.
From his policy stances on economics, I wouldn’t consider Paul Ryan to be as influenced by Hayek as some other notable politicians in Congress, but I certainly hope that the United States might depart from its failed Keynesian agenda and head in a decidedly more Austrian direction.
Republicans and Democrats alike have repeatedly given devastating illustration to the flaws of Keynesian policy prescriptions. Any credibility once enjoyed by the Keynesian school should be destroyed following the Keynesian eras of Nixon-Carter and Bush-Obama.