A look back on the 20th-century history of economics shows us that it was an almost-100-year battle between two lines of economic managements. Standing out in this battle are two prominent figures in economics philosophy: John Maynard Keynes and Friedrich von Hayek. Following is a brief summary of the 20th-century history of economics.
“… A global economy, energized by technological change and unprecedented flows of people and money, collapses in the wake of a terrorist attack... The year is 1914.
Worldwide war results, exhausting the resources of the great powers and convincing many that the economic system itself is to blame. From the ashes of the catastrophe, an intellectual and political struggle ignites between the powers of government and the forces of the marketplace, each determined to reinvent the world's economic order.
Two individuals emerge whose ideas, shaped by very different experiences, will inform this debate and carry it forward. One is a brilliant, unconventional Englishman named John Maynard Keynes. The other is an outspoken émigré from ravaged Austria, Friedrich von Hayek.”
Keynes is remembered by governments in both the US and the UK for his philosophy in favour of governmental intervention into national economies. It takes time (and, of course, great command of economics is needed) to interprete what his policies mean, and I doubt that Vietnamese economists grasp all Keynesian theories. (In Vietnam, Keynes must have received the same treatment as did other thinkers. Readers just have limited access to a small numbers of philosophers, among them were Karl Marx, Engels, Nietzche, and recently, Kant and Hegel. I haven’t seen any works by Keynes on booksheves here). Anyway, we were taught at university that in general Keynes advocated interventionist government policy. (Well, honestly speaking, it's not what we were really taught, but it's roughly what we would know later when we have finished shool, and it's hard to recall who taught that to us).
The desultory knowledge of economics that we gained from university lecturerers does not tell us anything about Hayek. So it is all the more difficult for me to say anything interesting about him. I just know, very dimly as usual - that Hayek is an enthusiastic supporter of liberalism, by that he went totally opposite to Keynes. (Did he?)
“… But a worldwide depression holds the capitalist nations in its grip. In opposition to both Keynes and Hayek stand not only Hitler's Third Reich but Stalin's Soviet Union, schooled in the communist ideologies of Marx and Lenin and bent on obliterating the capitalist system altogether.
For more than half a century the battle of ideas will rage. From the totalitarian socialist systems to the fascist states, from the independent nations of the developing world to the mixed economies of Europe and the regulated capitalism of the United States, government planning will gradually take over the commanding heights.
But in the 1970s, with Keynesian theory at its height and communism fully entrenched, economic stagnation sets in on all sides. When a British grocer's daughter and a former Hollywood actor become heads of state, they join forces around the ideas of Hayek, and new political and economic policies begin to transform the world.”
You know who they are, don’t you? They are "Steal Lady" Maggie Thatcher and the handsome action film hero Ronald Reagan.
Source: Some parts of the writing above are excerpted from the transcript of a six-hour television program produced and broadcast by PBS television.
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