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Friday, June 18, 2010

TWO FAMOUS LIBERTARIAN FREE-MARKET ECONOMISTS AND THE GREAT DEPRESSION OF THE 1930s

The Two Libertarian Economists?

The first, Friedrich Hayek, is one of the most influential economists of the last century  . . .  especially in free-market circles.  An Austrian by birth, he helped create what is called Austrian economics, and not least after he fled Austria even before the Nazis came to power in 1937 there, settled first in London where he was a professor at the London School of Economics, and then later at the University of Chicago. He eventually won a Nobel Prize in economics.   The head of LSE who brought Hayek to London was Lionel Robbins, a prominent British follower of the Austrian school.

Besides Hayek and Robbins, the most famous Austrian economist --- remember, the term refers to a school of economic theory, not just to Austrians by origin --- is Ludwig von Mises, who like Hayek and the other original Austrian economists fled the country even before Hitler came to power.

What the Buggy Professor Posted About

Prof bug, who is not a libertarian, rather a moderate Democrat and in favor of the kind of limited welfare-state and regulatory apparatus that exist in the US mixed economy --- but who is simultaneously opposed to moving closer to the EU sorts of statist economies --- did little more than try to clarify the debate that unfolded at Economist's View on Hayek's policy views for dealing with the Great Depression of the 1930s and what they might be for the recent global recession of 2008 and 2009.  

For prof bug's two posts on the subject, click here.   Be sure to scroll down to the end of the first page of posts in the thread there and click on the "show more comments" bar. 

Further Study

For a survey of Hayek, click here.   For Austrian economics, which is a form of strict laissez-faire --- more so, as a general thing, than the free-market champions at the University of Chicago like Milton Friedman --- click here.    As for von Mises, click here.

And keep in mind that unlike the mathematically oriented Chicago-trained economists, contemporary Austrian economists are suspicious of mathematical modeling and prefer to stick to basic theoretical assumptions about economics and deductive corollaries and conclusions . . . a huge dissent, in short, from contemporary economics of all sorts: New Classicals (the Chicago school), New Keynesians (who seek to root modern macroeconomic stabilizing policies in the microeconomics of individual economic behavior), and traditional Keynesians.