1 First?

2 Economies are the reflection of a societies collective morality. I am not much on collectivism, but recognize that the term "economy" is a collective definition. BTW Keynes would work if his practioners would follow instructions. Neatly stated, you prime the pump to get the pump functioning. No problem with this concept. In practice, the political practioner continually finds new reasons to prime a functioning pump. Until they destroy the natural flow of water. See statism. Hayek is more correct, however, requires a moral, disciplined people to function correctly. I don't see too much discipline and morality now a days. Stimulus fo snizzle.

3 "I don't see too much discipline and morality now a days." This is a chicken/egg problem. Social spending profligacy makes discipline unprofitable and handsomely rewards immorality.

4 #2: My own studies in complexity theory suggest that any attempt at top-down control of a complex system is doomed to failure -- either because the agents in the system adapt around it or the top-down forces end up crippling the entire system in their increased effort to control it. Instead, what a serves a complex system best is a small set of carefully chosen rules implemented at the agent level; intelligent, adaptive behavior then emerges from the complex system itself. That said, I agree with both of the problems you present: those at the top cannot resist the temptation to do more, whether it's self-serving or actually seen as "doing good", while far too many of us at the bottom have lost sight of the fundamental 'rules' that make societies and economies work. ..fritz..

5 45 Quatloos on F. A. Hayek

6 "Instead, what a serves a complex system best is a small set of carefully chosen rules implemented at the agent level; intelligent, adaptive behavior then emerges from the complex system itself." Given this and all you wrote before it--which I take as universal truth--it is clear that the first step in undermining a succeeding complex system is to attack the rules. "That said, I agree with both of the problems you present: those at the top cannot resist the temptation to do more, whether it's self-serving or actually seen as 'doing good'. . . " Since no man has the ability to see into another man's heart, only by their fruits can men be recognized. Collectivists are evil.

7

"either because the agents in the system adapt around it or the top-down forces end up crippling the entire system in their increased effort to control it"

 

Kind of like adopting the metric of "home ownership" and correlating it to desired behaviors like low demand for government services, low crime, and emphasis on education and mobility. Sadly this metric was a classic example of bipartisianship with disastorous consequences. I guess no one correlated it the other way round; that good behavior creates value in things, not things create good behavior.

8 awesome....

the narcissism of the notion that one guy can plan for 300 million on a micro scale is a sin against the population....

the federal government is providing masks to true cost for everything from food to electricity.....

everything they intervene in has you competing as a non-subsidized client with the guys who literally run the printing press of money.....

foodstamps allow the poor to drive the price of food up, medicare is the elevator that drove up cost not some leveling of the price field.....

when I was a five year old a broken arm cost my parents less than 200 bucks to fix outside their insurance, now God bless the system trying to "control costs" that same arm would have cost me about 600 bucks.

"change"

9 7 GGD,

that has always been the crisis of our Federal system we have not tried one or the other for generations...we have hodge-podged both and it is a mess....

I like freedom, I prefer to control my own destiny so I am biased towards the guy who speaks Austrian (hattip Ogabe_) but people seem to want Keynes' loving embrace if they don't grasp that sometimes he puts you in a chokehold rather than a hug.

10 Keynesian stimulus no longer works because all his ideas were implemented by the 1960s and deficits have been huge for decades with only a few annual exceptions.  Keynes would never suggest profligate deficit spending in today's environment.  Like the real JFK (lower taxes, missile gap), the Left's vision of Keynes doesn't square with modern reality. 

11

This video is just f'n brilliant.  My first thought is that this kind of production should be mandatory viewing for today's generation (nevermind that mandates suck and almost never produce the desired results).  Great music and production values, almost perfect for the sensibilities of today -not enough womenz shakkin it to be perfect-, but my second thought is that this video presupposed a certain level of knowledge between the two schools of economic thought to be really appreciated, knowledge today's yutes sadly lack.

For those of us who've moved up from ignoramus to moron, f'n awesome!

12 ". . . but people seem to want Keynes' loving embrace if they don't grasp that sometimes he puts you in a chokehold rather than a hug." My point is that we cannot *know* if these people really are looking for a loving embrace or if they pretend to do so to have an excuse to put me in a chokehold.

13

Loved the WWII reference... people don't remember how badly people lived DURING WWII. 

It was the investement in building Factories for war production, then turning them over to civilian use AFTER the War which really ended the Depresion.

Not just Government spending... it was the factories built, and workers educated by CIVILIANS builting mines, and factories... and the absolute LACK of government regulation on them...

And.... if War Spending is such a great deal, seeing as how we are currently spending Huge amounts, on THREE Wars now, why is the economy not doing better?

14 10 beagle,

I suspect Keynes would shit a brick at the idea of direct subsidization of individuals lifestyle getting to the point it has in the US where the "urban poor" have more cellphone usage than the average middle class person and get their food for free, their rent largely paid for, and a defacto stipend.

Keynes supported the welfare state as a shunt from the worst excesses of the market ie no starvation no homelessness, but "free condoms"?

come now.

15

"medicare is the elevator that drove up cost not some leveling of the price field....."

 

If you really wanted to insure all of America it would be simpler and more cost effective to provide a $5,000 MED IRA and require all working people to purchase Catastrophic Care insurance as a term of employment. It is really very cheap. Further, this process cuts out the rediculous administrative overhead in medical delivery that is required by a third party payer. Cash, Checks and Credit Cards are the most efficient method to procure med care. Doctors and dentists love it; they then could fire all those admin assistants that spend their days tracking insurance claims.

Hell you could give the poor $5k a year in medical chits and see a major reduction in medical costs and budgetary responsibilities.

16 I'm tired of the debate, which proceeds without reference to experience or the facts on the ground, and I'm tired of Keynes' minions running every aspect of my life. The socialists can have their beloved system. I just want separation.

17 12 FTL,

I suspect in '68 it was the desire for a hug.....I think the Hug has been weaponized by the '90s.....

they KNOW their system doesn't work with regards to firing the economy but their goal is not really prosperity it is controlling the goose.....

as Ogabe said on tax rates 'I want 'fair'.....

and he wants to be the judge of "fair".

18 16 GBM,

give it about twenty to thirty years at current rates....

California and the baby Boned are gonna force the question real soon when the feds argue that Wyoming owes California its profligacy being subsidized by Cowboy sweat.....

I am about 40% of the way towards wanting the matter decided.

19 What the hell is up with new browsers always lacking some capabilities you learned to exploit in previous versions.  I know there is a trade off for new capabilities, most of which go unused. Is this a case of planned reverse obsolescence? 

20 @17 sven10077 "I suspect in '68 it was the desire for a hug.....I think the Hug has been weaponized by the '90s....." I disagree with you in light of what is now known about the extent of Soviet infiltration of American institutions since the 1940s, but my disagreement is pointless. There is a solid dividing line between charitable interpretation and playing the fool. Extending any collectivist the benefit of the doubt with respect to his motivations is the latter.

21 Keynes supported the welfare state as a shunt from the worst excesses of the market ie no starvation no homelessness, but "free condoms"?

He brought it upon himself.  He told politicians what they wanted to hear.

22 Dammit, I could've used this in class yesterday. It'll be in the plans next semester, I've used the first since it came out.

23 21 Amish Dude,

the first iterations of the welfare state were very careful about not providing more than subsistence subsidization, now I am not arguing that that means it was 'ok" but in Keyne's defense he had not had a lot of data on what the endgame would be.

essentially what he sold evolved into the notion that a dragon can feed itself by eating its tail....

it should be no shock that donks believe in global warming or any other hokum their whole economic ideology is a perpetual motion machine

24 When do they release these as MP3 and video downloads?  This series should be on every portable device known to man.  Spread the knowledge.

25

Neatly stated, you prime the pump to get the pump functioning.

The economy is not a "pump." The only reason to use the analogy is if you see the goal as "consumption of goods and services" and you see the driving force behind this as "money supply." It isn't. "The economy" is an abstract stand-in for the transactions that occur as a result of people trying to satisfy their needs and desires based on their own personal judgement and unique circumstances. There's nothing to "prime" because money isn't the driving force—individual psychology is.

26

Hayek wins the argument, and has the real world examples to back him up. But, Keynes burns the house down making his point, and leaves nothing but hunger and hyperinflation in his wake.

The Keynes argument is the Four Horsemen of the Apocalypse: War, Pestilence, Famine and Death.

Keynesian economics burns through public funds, both taxed and borrowed, maintaining the status quo. Unemployment rises while growth stagnates. Tax receipts plummet. It is a vicious downward spiral.