A Liberal in a Keynesian world?

So what is the state of economics in the country's leading universities? I'm quite vehement in my belief that economics is not an empirical science and I am strongly anti-Keynesian. In fact, I often find myself sitting ideologically between Hayek and Mises (Mises being the same guy that called Milton Friedman a socialist!)

I went through the entirety of my A Level Economics course (and my history course for that matter) pretending to be a Keynesian arguing in favour of things like government spending and cheap money to lift the country our of recessions but I never believe in what I was writing - I just didn't want to scare the examiners by advocating a liberal economy.

Is my university experience going to be any different? I'm certainly not afraid of a bit of econometrics (I got an A* in Maths) but I would be really disappointed if the syllabus revolved around treating economics as a empirical science. I'd also be really disappointed if my lecturers where Keynesians or even Friedmanites who would be prepared to mark me down because my views differ from their own.

Does anyone have any experience with an economics degree as a pretty radical liberal?

I have absolutely no experience in this area - I'm going to be a politics student, and have only come to know Mises/Hayek and other Austrians through political science - however I am very heartened to see this post. I applaud you for your free thinking! (and being right, of course)

You learn about Mises in political science? I'm really surprised, it is difficult to think on someone who has had less influence on politics!

No, not at all, but that is the track that reading Hayek places one on, and he at least is respected by everybody. I've currently got 'Socialism: An Economic and Sociological Analysis' on standby, while I prepare to start a social sciences course in which I expect to be snowed under with Socialism. How did you end up reading him?

Socialism is very good, Liberalism is better I think, well worth a read even if your course doesn't require it imo. I like Bureaucracy as well.

In history in Year 12 we did a module from 1918-1964 in British history which included the 'Keynesian revolution' as my teacher described it. I started reading some Keynes (the first book I read was his General Theory, and that was a bugger to get through!) and naturally I needed a viewpoint to contradict his to get those juicy analysis marks in history. I became fixed on Friedman's views on liberty, but his economics seemed conflicting to me - how can someone support liberty and a negative income tax? - from there is was just a natural progression back to Hayek and eventually Mises.

What about you? It is rare to find a fellow liberal, especially in this country.

I'll look into both then, thanks I'm not sure I'll acclimatise well to Mises from what I've seen of him - he seems to be more radical than Hayek - but they do at least seem like interesting topics.

I considered reading the 'General Theory' but I didn't because I thought it might involve some maths and I felt that I had some more important things to read. To be honest, I don't regret not reading it! I'm no expert on Keynesianism but it doesn't seem worth a slog to develop understanding.

Do they? As I understand it Friedman's attachment to liberalism was consequentialist in nature. Is your objection that a negative income tax would have a net negative influence on society? I always felt that Hayek's allowance idea (I don't remember the particular name, something remarkably similar to the recent Green Party proposal) was more questionable than that.

I studied a Political Philosophy unit for my Philosophy course in Year Thirteen, and my teacher was a Socialist so I'd read 'The Road to Serfdom' to get back at him. Ended up reading 'The Constitution of Liberty', 'Freedom and Capitalism', 'Economics in One Lesson', and a few bits and bobs, along with becoming generally interested in Liberalism (there's a great book called 'The Welfare State We're In', if you're not familiar, that I would really recommend in the context of the UK) - so that's how! I've currently got 'The Fatal Conceit' on my list but I've not much hope that I will finish it before October.

Absolutely Mises was more radical than Hayek, I think Mises pushes the realms of liberalism and touches anarchism or at least minarchism.

The General Theory has almost no maths, I could count the number of equations on there in one hand. But it is very dry, there is no doubt about it, the ending (where he talks about the books application in the real world) is very interesting though.

A negative income tax would certainly have a net-negative on society but it is a price worth paying to ensure the very poorest don't starve to death. But Friedman was always heavyhearted in arguing for a negative income tax, he expressed his concern at his effectiveness and said something like 'in a pure liberal world there would be no need for such a tax.' This is my main criticism of him, he moderated his views in the hope of achieving popularity.

I think Hayek's attitude to welfare is even more leftist than Friedman, especially in his early (~Serfdom) days. I'm glad he eventually became more liberal.

Did your teacher ever mark you down for expressing views that conflicted with their own? This is what I am concerned about, I don't want to say anything that will offend a socialist teacher.

Yes, well he may be the limit then, for me. I'd say I quite enjoy anarcho-capitalism and radical libertarianism for its critique of the state (have you read 'The Machinery of Freedom' by Milton's son btw? It's free on the internet and actually really good) however I'm too conservative to take it very seriously. I'm a bit of a Hayek fanboy I think so I have basically just inherited his views entirely. I have this poster (http://www.zazzle.com/fa_hayek_poster-228103926168793384) for my university room, and I'm getting a Mises/Hayek/Rothbard/Friedman one as well 😳

Oh, it doesn't? That's annoying! It was just an assumption I had made, and I probably would have read it otherwise. Unfortunately I don't have the time now.

Wouldn't that be a net positive effect, though? I'm not sure I necessarily disagree with the moderation myself, but I'm very sketchy on monetarism so I've always been up in the air on my judgement of Friedman.

I am too, but in some sense I think Socialist sympathies were necessary for the book to do what it did. Ultimately the sympathetic tone is one of its strengths, and IMO if he had been more liberal earlier on then we might not have felt the full force of 'The Road to Serfdom' as we have.

And no, not at all! He was a clever man, so the kind of person who can respect those who disagree with him. However, I do think in some senses it was a roadblock. For instance, he did often point out that my (philosophy) essays were very 'economic', and he did like to remind me that neither of us had been formally educated in the subject. Clearly this is just a philosophy problem, though. There will certainly be a unique set of issues in terms of economics as a course.

No I've not, I hate reading things on the internet. I'll be sure to check it out once I start university and have access to their library though.

I really disagree about Hayek, by the way. By abandoning his liberal principles, he only shifted the debate further towards the Keynesian consensus where a world without major government intervention is inconceivable. The Road to Serfdom is an excellent critique of socialism but ironically, in my opinion, it was a major factor in the death of liberalism in Europe and America.

Even Thatcher, who many people consider to be a rabid liberal and considered Serfdom to be her economic bible, was very much a statist. Had Hayek maintained his principles and actively fought against the consensus, I think we would see a bigger gap between the left and the right than what we see today where both sides are pretty much the same economically. Although it is possible my ideas are a bit naive, I haven't read as much on the subject as I would like due to A Levels.

I'm really glad your teacher was able to accept alternative view points but I am concerned that economists are rather more intolerant. I found a video of Friedman describing an encounter with Mises and I hope my lecturers are nothing like that!

So what is the state of economics in the country's leading universities? I'm quite vehement in my belief that economics is not an empirical science and I am strongly anti-Keynesian. In fact, I often find myself sitting ideologically between Hayek and Mises (Mises being the same guy that called Milton Friedman a socialist!)

I went through the entirety of my A Level Economics course (and my history course for that matter) pretending to be a Keynesian arguing in favour of things like government spending and cheap money to lift the country our of recessions but I never believe in what I was writing - I just didn't want to scare the examiners by advocating a liberal economy.

Is my university experience going to be any different? I'm certainly not afraid of a bit of econometrics (I got an A* in Maths) but I would be really disappointed if the syllabus revolved around treating economics as a empirical science. I'd also be really disappointed if my lecturers where Keynesians or even Friedmanites who would be prepared to mark me down because my views differ from their own.

Does anyone have any experience with an economics degree as a pretty radical liberal?

My course (Cambridge) teaches you a Keynesian and Classical approach and you aren't penalised for having an opinion.

Well there isn't a great deal in it that you won't already know, but it is essentially a consequentialist defence of anarchy-Capitalism.

I don't really understand how Hayek can be construed as having abandoned his liberal principles. Are you talking about his tone in 'The Road to Serfdom', or the conservative elements of his theory? Perhaps there is something I'm missing, but insofar as I can see 'The Road to Serfdom' is a total rejection of Keynesianism, and there is no clear mechanism which could explain how that led to the 'death of liberalism'. Care to elaborate?

Block asserts that: "in making the case against socialism, Hayek was led into making all sort of compromises with what otherwise appeared to be his own philosophical perspective – so much so, that if a system was erected on the basis of them, it would not differ too sharply from what this author explicitly opposed"

I'm not sure I agree with you about Thatcher. IMO, it is not that she was a statist, but the kind of politician she was. I believe she said of 'The Constitution of Liberty', "This is what we believe", and as far as I can see there isn't much reason to doubt that. She clearly ignored Hayek's localism, and I think that she neglected his basis for being a liberal - decentralisation - but I think that was because she was just very... enthusiastic(?) in her hatred of Socialism.

In any case, as regards the substantial content of what you're saying, I can't really comment because I don't understand your argument. What are you proposing that Hayek did, exactly, to limit the development of liberalism?

Well, I don't know. I wish you luck, but you might want to go to America if you decide to do a postgrad

Really, from Friedman's son? Did he abandon his fathers advocacy of regulating the financial sector and using taxation to fund an army and social welfare? I should put it closer to the top of my to read list.

His critique of a centrally planned economy is admirable but he contradicts himself by needlessly attacking laissez faire trade. Even Krugman is to the right of Hayek on this fundamental part of economics, I think it is impossible to be a liberal and support tariffs. There is a very good quote on Wikipedia that sums up my attitude to early Hayek

Hayeks support of government control over work hours, a minimum wage and other elements of social welfare shifted the economic landscape to the left to the extent that people like Thatcher (a left-winger compared to Mises) are considered right-wingers by most.

Had Hayek stuck to his guns and advocated a true liberal state, I think the political centre would be much more right-wing.

Maybe, but I'm not a millionaire! I'm thinking about applying for a summer at the Mises Institute though.

You do realise Keynes was a liberal.

Edit: did you do further maths? Further maths is pretty much essential if you want to study economics at a good university. Would help with your econometrics too.

You do realise Keynes was a liberal.

Edit: did you do further maths? Further maths is pretty much essential if you want to study economics at a good university. Would help with your econometrics too.

Yes, very much so - he advocates an entirely privatised legal system/everything.

Interesting. I'm not sure specifically what the quotation is talking about. Do you have suggestions of any essays he wrote or particular chapters I can read for reference?

Oh, their twitter page put up some stuff about people doing that this year. It looked fun!

I just a hard copy of it! It sounds interesting, I wonder what his parents made of it...

No, sorry, I was just basing it on memory of when I read Serfdom which was a few months ago. I know he abandoned his protectionist policies though.

"If you have any comprehension of my philosophy at all, you must know that one thing I stand for above all else is free trade throughout the world." He said that a few years after the book was published.

The thing is, Friedman has incentives to work built into his NIT. Although it sounds somewhat utopic it was supposed to mean that any wise in an individual's wages would always result in an increased income (even after decreased governmental support is factored in) which obviously increases incentives to train, work overtime ect. Hayek, as far as I understand it, just wanted to ensure everyone was free to leave the labour market at any time while still maintaining a decent standard of living. Friedman's NIT would ensure that anyone in work would always have a higher standard of living than someone not in work. I think there is a big difference.

Yeah it's in Utah though which is a pretty drab state AFAIK.