David Warsh finally says what someone needed to say: Friedrich Hayek is not an important figure in the history of macroeconomics.
“Certainly Hayek made a big impression on me and my friends, when, as young men, we read him in the 1970s,” Mr. Warsh, a journalist, wrote on his Web site, EconomicPrincipals.com, earlier this month. “We felt the same way about the Harvard philosopher Robert Nozick. With the passage of time, though, 19th-century liberalism has seemed, by itself, a less and less adequate framework with which to deal with the problems of the 21st century.”
These days, you constantly see articles that make it seem as if there was a great debate in the 1930s between the economists John Maynard Keynes and Mr. Hayek, and that this debate has continued through the generations. As Mr. Warsh says, nothing like this happened. Hayek essentially made a fool of himself early in the Great Depression, and his ideas vanished from the professional discussion.
So why is his name invoked so much now? Because Mr. Hayek’s book, “The Road to Serfdom,” struck a political chord with the American right, which adopted Mr. Hayek as a sort of mascot — and retroactively inflated his role as an economic thinker. Mr. Warsh is even crueler about this than I would have been; he compares Mr. Hayek (or rather the “Hayek” invented by his admirers) to Rosie Ruiz, who in 1980 claimed to have won the Boston Marathon, but actually took the subway to the finish line. “The claims conservatives are making about the role [Mr. Hayek] played as an economist are beginning to smack of Ruizismus,” Mr. Warsh writes. “That is, they have jumped a caricature out of the bushes late in the day and claim that their guy ran a great race.”
Now, given my criticisms of where macroeconomics has gone since the 1970s, I of all people should be careful to say that ideas ignored or rejected by the professional mainstream aren’t necessarily without value. To take the most obvious example, the economist Hyman Minsky now looms large in many people’s thinking, my own included, even though he died a very marginal figure. But the Hayek thing is almost entirely about politics rather than economics. Without “The Road to Serfdom” — and the way that book was used by vested interests to oppose the welfare state — nobody would be talking about his business cycle ideas.
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Paul Krugman joined The New York Times in 1999 as a columnist on the Op-Ed page and continues as a professor of economics and international affairs at Princeton University. He was awarded the Nobel in economic science in 2008.
Mr Krugman is the author or editor of 20 books and more than 200 papers in professional journals and edited volumes, including "The Return of Depression Economics" (2008) and "The Conscience of a Liberal" (2007).
Copyright 2011 The New York Times.