Hayek’s review of the Treatise in Economica appeared technical in character, but it was politically charged…
|March 13, 2012|
The Theatre, LSE, c.1930. Photograph from LSE Library Collection
In London, Robbins had experienced Keynes’s less attractive side. They had both been appointed to the Macmillan Committee on Finance and Industry, which was intended to find answers to the severe economic downturn then under way. Keynes had been a free trader for most of his life, but in the crisis conditions of the early 1930s he persuaded the majority of the committee to support import tariffs. Robbins, who remained committed to free trade, insisted that he write a dissident minority opinion. According to a later account from Robbins, Keynes “then, as always, was capable of fits of almost impossible anger”. Indeed, he was “furious” with Robbins and treated him “most roughly”.
According to Nicholas Wapshott in Keynes–Hayek: The clash that defined modern economics, the Keynes–Robbins quarrel on the Macmillan Committee had far-reaching consequences. Robbins was so angry that he invited Friedrich Hayek, one of the most promising young men in the Austrian School, to give a lecture series at the LSE. The lectures were seen – by both Robbins and Hayek – as presenting a rival view to that in the Treatise on Money. The purpose of bringing Hayek from Vienna to London was that he should act, in Wapshott’s words, “like a western gunslinger” whose priority was “to target the troublesome Keynes”.
In the summer of 1931, Hayek reviewed the Treatise in Economica, the LSE’s specialist economics journal. The review was extremely critical, alleging that Keynes had been sloppy in his definition of terms, that his meaning was difficult and obscure, that his conclusions did not follow from his premisses, and that he had not read enough of the Continental literature. Implicitly, Keynes was at fault because he had not familiarized himself with the doctrines of the Austrian School, notably its recondite analysis of “roundabout” methods of production. This analysis stemmed from a branch of economics, known as “capital theory”, for which the Austrians were famous.
Hayek’s review appeared technical in character, but it was politically charged. In the Treatise, as in his subsequent and more celebrated General Theory of Employment, Interest and Money, Keynes advocated the active use of fiscal and monetary policy to regulate demand, output and employment. In fact, the key policy prescription of the Treatise was what Keynes termed “monetary policy à outrance” – and what we now call “quantitative easing” – to combat an emerging slump in the global economy. Hayek repudiated this monetary activism as inflationary. He believed that during the boom, banks had the bad habit of extending too much credit for particularly “roundabout” kinds of production. In these credit binges, some entrepreneurs made mistakes and sinned against the free market, and the State should do nothing to ease their pain.
But it was less the content of Hayek’s review that drew attention than its fiercely polemical tone.
Inherent Vice’s Two Directions
The jokes certainly strike one as sophomoric and the latter one as clichéd, further below Pynchon’s intelligence than one would like to think he would stoop, at least in print. Discounting them and moving on, or throwing the book across the room as Parker half implies we should do, however, would be to lose sight of “that high magic to low puns”.
Auden, Larkin and Love
I was prompted to revisit these ancient questions anew by a long footnote about a single line in the new Complete Poems edition of Philip Larkin’s poetry. The footnote refers to “An Arundel Tomb” contains a provocative remark about that the poem’s celebrated, controversial, closing line, the one about the true nature of immortality: “What will survive of us is love.”
Plato, Our Comrade?
Not surprisingly, there have already been critics of Badiou’s translation. The first is that his translation breaks the formal rules of translation to such a degree that the original meaning of the text has lost its significance. But this critique is inadequate at face value because Badiou’s hyper-translation is forthright in its intention of taking Plato’s concepts and modifying them into his own lexicon.
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