The Economic Crisis in Retrospect

The Economic Crisis in Retrospect

Explanations by Great Economists

Edited by G. Page West III and Robert M. Whaples

As the United States continues its slow recovery from the global financial crisis of 2008, politicians, policymakers and academics are increasingly turning to the lessons of history to gain insight into how we might address both current and future economic challenges. This volume offers contributions by eminent economists and historians, each commenting on the theories of a particular 20th century economist and the ways in which those theories apply to modern economic thought.

Chapter 7: Insights from Friedrich Hayek

Bruce Caldwell

Subjects: economics and finance, economic psychology, history of economic thought, international economics, political economy


Many people first heard about Friedrich Hayek last summer when The Road to Serfdom (1944) reached number one on It stayed there for about ten days, stayed in the top 100 for two months, and was still in the top 300 a year later. This book was published in 1944, and it is pretty unusual that a book written so long ago would suddenly rocket to number one on Why did this happen? Commentator Glenn Beck held up a copy of The Road to Serfdom on one of his shows and said: ‘This book is like a Mike Tyson right jab to the jaw of socialism.’ Then he urged viewers to go out and buy it – and people bought it in droves. If you are a YouTube watcher and you like economics you might have seen the two rap videos in which actors playing Hayek and John Maynard Keynes debate each other. Then there was a real debate that recently took place at the London School of Economics with George Selgin versus Lord Skidelsky, who is the biographer of Keynes (Skidelsky, 2005). These Keynes/Hayek debates are one reason that people have become much more aware of Hayek recently. I am interested in Hayek because I am interested in the development of economics in the twentieth century. That makes Hayek an ideal person to study, because his life was contemporaneous with the twentieth century.

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