Keynes vs. Hayek

Yesterday I finished reading my Christmas present to myself:



The book was a real page-turner I could finish in 3 days. It describes the ideas of both Keynes and Hayek, their life, how their ideas clashed, how deeply they influenced economic policies all over the world, and how controversial one might look at the latest crisis developments from 2008 onwards.
I took my share of economics lessons in Graz and was surprised that the Austrian School did play little to no rule in my education there. Its not that I cannot remember - I even checked some of the scripts from that time. It just was not part of the program.

As a teaser you might give this great rap song a chance. (The authors are with university background, professors - this video was done as educational material.)


By now I second very much the Austrian ideas: balanced budgets, tight monetary policy, small state, no messing with interest rates and prices by politics, ensuring free markets, no banks too big to fail, ... All this makes so much sense in the long run.
Applying these politics today, on the verge of a European debt collapse, would lead to a huge debt contraction followed by a worldwide recession. It would be the same policy - maybe stricter - that IWF and EZB are forcing on the Greeks. And as in Greece it would lead to a shrinking economy, a huge contraction, high unemployment, ... And with a truly free market falling prices, even faster falling wages, collapsing of many companies, would take place.

I can feel for myself how much easier it is to hope for the other solution, the Keynesian one: "Let us only this time muddle through. Let us print enough money to get away without the high unemployment, the collapse of corporations and banks, ... Let us do it just one more time. Let us stabilize the system and get balanced afterwards step by step. Just not feel all the pain now and at once ... "

I am just afraid, its the cry of a drug addict, sensing how cold turkey feels. He would promise everything to get the next shot. "Just give me that one shot I need so much. And once I feel better I promise to cut back on the dose I take every day a little." Who believes its gonna happen?