Keynesianism triumphed over Hayek partly through its optimism about solving crises

Evidence

The General Theory was intended as an assault on the entire edifi ce of orthodox economic theory, but Keynes was not above sending, as Alvin Hansen observed in a prominent review, “many a dart at the neo- Viennese and London school.” He drew par tic u lar attention to the contrast between its optimistic and constructive approach and the much bleaker and more defeatist perspective in the work associated with the LSE. “The right remedy for the trade cycle is not to be found in abolishing booms and thus keeping us permanently in a semislump,” Keynes observed, “but in abolishing slumps and thus keeping us permanently in a quasiboom.” Keynes’s mocking treatment of Hayek’s ideas quickly became common even within seminars at the LSE. After converting to Keynesianism while on a fellowship in the United States during the 1934– 1935 academic year, Hayek’s younger colleague Nicholas Kaldor began making sarcastic interjections in seminars that became increasingly notorious within the school. In the midst of this atmosphere, Hayek made the devastating decision not to submit a review of The General Theory. … Regardless of the reasons, his decision seemed to many an admission of defeat. — Angus Burgin, The Great Persuasion, 80

Categorization

• XREF: Connects to the broader Mont Pèlerin origin narrative in this book and to the standard historiography of the Keynes-Hayek debate (Nicholas Wapshott’s ‘Keynes Hayek’). — connects to: Keynesian economics drove Hayek’s school to near extinction by 1941 — Angus Burgin, The Great Persuasion: Reinventing Free…, 82
• QUESTION: Hayek’s refusal to review The General Theory is presented as career-damaging — worth checking whether other historians read his inaction differently, e.g., as strategic.