Edited by L. Randall Wray and Mathew Forstater
Chapter 14: On the Relation Between Individual and Collective Beliefs: A Comparison Between Keynes’s and Heyek’s Economic Theories
14. On the relation between individual and collective beliefs: a comparison between Keynes’s and Hayek’s economic theories Richard Arena Many articles and meetings have been dedicated to the relationship between Keynes’s and Hayek’s contributions to economic theory. Not surprisingly, most of them focus on monetary and business cycle theories: both topics were extensively discussed by the authors in the Economic Journal as well as in a famous private correspondence. This is why we will not consider these topics once again (see, for example, Arena, 1999a) but rather compare Keynes’s and Hayek’s contributions to a different issue: the relation between knowledge and beliefs, on the one hand, and economics, on the other hand. More precisely, we will consider what is the role given by both authors to individual and, possibly, collective beliefs in the analysis of the working of the global economic system and, more particularly, of markets. Our project could be considered a rather strange attempt: Keynes and Hayek devoted their respective contributions to the present topic within very different historical and intellectual contexts, so that the comparison between their perspectives might appear illegitimate at ﬁrst sight. Most of Keynes’s ideas were developed in the Treatise on Probability (published in 1921), in Keynes’s Lectures, 1932–1935 (1989), in the General Theory (Keynes, 1936) as well as in ‘The general theory of employment’ (Keynes, 1937), namely during the 1920s and the 1930s. By contrast, Hayek began his reﬂections on these subjects at the end of the 1930s, even if he...
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