Even Friedman rejected Hayek’s do-nothing policy as harmful in the Depression
Evidence
Milton Friedman, who was a graduate student at Columbia and the University of Chicago at the time, recounted that he and his generation were not convinced by the proposition that “you just have to let the bottom drop out of the world.” He concluded that by encouraging a “donothing policy both in Britain and the United States,” Hayek and Robbins “did harm.” … By the end of the de cade only two or three Hayekians were left at the LSE. … Hayek himself, noting the profession’s turn toward macroeconomics and econometrics after the publication of The General Theory, acknowledged that he became perceived as “oldfashioned, with no sympathy for modern ideas.” — Angus Burgin, The Great Persuasion, 82
Categorization
- XREF: A striking data point for the reader’s MPS history: the later symbol of free-market economics himself disowned Hayek’s crisis stance, foreshadowing the interventions of the Chicago school. — connects to: Austrian fatalism made Hayek’s side politically unsalable in the Depression — Angus Burgin, The Great Persuasion: Reinventing Free…, 490; Hayek’s economics failed because it offered no remedy during the Depression — Angus Burgin, The Great Persuasion: Reinventing Free…, 81; Federal crisis bailouts enacted Milton Friedman’s Depression remedy of shielding the wealthy — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 508 (+4 more)
- QUESTION: Friedman’s early ‘did harm’ judgment versus his later monetarism — how did his Hayek criticism evolve across his career?
Broader Connections
- Hayek’s economics failed because it offered no remedy during the Depression
#corroborates(0.90) — Angus Burgin, The Great Persuasion, 81 - The Depression radicalized British intellectuals toward socialism and communism
#complicates(0.80) — Cedric J. Robinson, Black Marxism_ The Making of the Black…, 2369 - Federal crisis bailouts enacted Milton Friedman’s Depression remedy of shielding the wealthy
#expands(0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 508