BBC Radio 4 is about to air the debate between myself and Jamie Whyte (defending Hayek) and Lord Skidelsky and Duncan Weldon (defending Keynes),so I thought I might supply a little background on it for the sake of anyone who may be interested in how these things shape up.
I was only asked to take part in the debate about two weeks before it was scheduled to take place, presumably because one or two or half a dozen other persons couldn’t or wouldn’t do it. But as I am actually an admirer of Lord Skidelsky (his biography of Keynes is truly splendid), and the LSE venue was itself classy enough, despite having only recently returned from a long stay in Europe I was glad to accept.
It was only after I did so that I learned that this was to be one of those debates in which each speaker had only a few minutes (originally 3.5, later expanded to 4) to make his case. Boiling down Hayek’s position to what (given my slow manner of talking) amounted to about 500 words was no easy matter; and here I must say the Keynes team had something of an advantage, since Hayek’s is a rather involved boom-bust theory, whilst Keynes’s is only a theory of how spending is what’s needed to end busts.
So I set to work reading and re-reading works by Lord Skidelsky, who had obligingly written several things specifically dealing with Hayek, and thereby formed what turned out to be a very good guess of the arguments he would in fact make. I also contacted Jamie Whyte, who I did not know, to coordinate my efforts with his. We agreed that I would follow Skidelsky and that he would handle the second round against Duncan Weldon.
Just before I was to leave for London, however, the BBC decided that they wanted Jamie to go first, which rather put a wrench in our works. What’s more in London they suggested that terms like “Fannie” and “Freddie” and “cyclical unemployment” that had appeared in my originally prepared remarks, though fine for the LSE crowd, might go over the heads of some of the 1-million-odd Radio 4 listeners. In fact I’m sure they were worried stiff that I was going to bore everyone to death. So they suggested some changes which, besides not being my own words, added on another 500 words or so! Consequently I spent much of Tuesday morning rewriting my talk from scratch in light of their concerns, getting it down to about 700 words, with a paragraph I could dump if I needed to (which in fact I did).
Despite all the last-minute changes the debate itself seemed to go very well–certainly everyone had a good time, thanks partly to Paul Mason’s excellent mood-setting (and occasional, unintentionally funny bloopers). I hope that shows in the broadcast version. (I certainly hope that I don’t end up boring anyone to death after all.)
There were times, though, when I regretted not having had the chance, or sometimes not having had the wit, to answer or answer more fully some of the arguments made on Keynes’s behalf. I especially regret not having been called upon to answer Duncan Weldon’s claim that Hayekians are like dentists who have nothing to offer someone who is suffering from a rotten tooth. I might then have been tempted to point out, first of all, that it was pretty cheeky for a British proponent of greater government intervention to be bringing up dentistry. But what I really wanted to observe was that it is the Hayekians who, after all, are all for pulling an economy’s “rotten teeth” not only to eventually stop the pain but also to keep them from stinking it up, whereas it’s the Keynesians who say, in effect, “Oh, don’t worry about that tooth…just have some more candy and everything will be all better.”
I wish as well that I’d had more time to address Lord Skidelsky’s suggestion that one had to be far gone to believe that FDR’s New Deal actually delayed U.S. recovery from the Great Depression. He evidently is unaware of the very substantial body of research pointing to the harm done by certain New Deal programs, and especially by the National Recovery Administration, none of which by the way is due to crazy Hayekians. Indeed, some is by scholars generally considered sympathetic to Keynesian ideas.
Finally, neither Jamie nor I managed to make as much hay as we ought to have out of Skidelsky’s assertion that government spending of whatever kind is as good as any other sort for promoting long-run economic growth. Here surely was a chance, had we only the time, to draw attention to the rotten heart of Keynesian economics. For Skidelsky’s argument–that workers will supply factories with orders for things no matter who pays them–illustrates in all its naked crudity the dangers of ignoring the “supply side” of economic activity. After all, it isn’t just what workers would like to have in exchange for their paychecks that determines what they can have. On the contrary: what they can have depends crucially on what they themselves actually produce in exchange for the payments they receive. An army of government workers employed digging and refilling ditches, for instance (and the sweeping nature of Skidelsky’s assertion warrants the reductio) contributes absolutely nothing to either its own or others’ ability to consume, let alone to the maintenance or augmentation of the stock of productive capital. A body of economic doctrine that lends itself to such a serious misapprehension of the basis for economic prosperity can hardly be expected to provide sound advice for nursing a sick economy to health.