The Austrian economist Friedrich von Hayek, who left us in 1992 at age 93, once said that to your word was always the last, just go through their opponents. He was lucky. He was survived by his chief opponent of Keynes in almost 50 years and, thus, can claim victory over his enemies, who cruelly kritikova his lifetime. The apotheosis of his success came in the '80s, when British Prime Minister Margaret Thatcher often cited his "road to servitude" (1944) - a classic work against central planning. But in economics, there is no final verdict. The position of Hayek, who defended the market system against the inefficient central planning is gaining popularity, however, the point of view, Keynes's notion that the market system needs a permanent stabilization, more liked finance ministers and central banks. Ultimately, both directions are reflected in the Chicago theory of "rational expectations", which is considered fundamental to the economic teachings of the past twenty five years. It was assumed that economic agents have full information about all possible consequences, so the system crises can only be the result of extreme events and shocks that do not fit into the framework of economic theory.
The world economic collapse of 2007-2008 discredited economic "rational expectations" (although the chief priest of the cult have yet to realize it), so, Hayek and Keynes once again proved to be a barrier. The problems have not changed much since the last dispute, which began during the Great Depression in the 1930s. What led to the collapse of market economies? How to react in this situation? What can I do to prevent such situations in the future? For Hayek, in the early '30s and for his followers today, the crisis originated on the basis of over-investment relative to savings, which led to excessive credit growth. Banks gave loans at low interest rates, which could not arrange investors focused on savings. It made for great all investment projects. But only temporarily. However, these investments do not reflect the real preferences of economic actors, so the savings required for them is not enough. For a time they can be supported by infusions of cash from central banks. But ultimately, the markets understand that such projects are hopeless. At this point, the boom turns into a fiasco. Thus, in all the artificially created booms laid the seeds of self-destruction. The process of restoration involves removing distortions in the allocation of capital, reduce consumption and increase savings.
Keynes (and his modern followers) see the cause of the crisis in opposite phenomena: the lack of investment relative to savings - that is too low consumption or aggregate demand, insufficient investment to maintain the level corresponding to full employment. This situation ultimately leads to a drop in profit expectations. Again, some time may be artificially maintain the current situation, stimulating consumer lending, but sooner or later debts from consumers is too much, and they will reduce their costs. In fact, the approaches of Keynes and Hayek to the causes of the crisis is not so far apart. And in fact, in both cases the key role played by excessive debt. However, the conclusions that led these two theories - the exact opposite.
For Hayek recovery - is the elimination of unnecessary investment and increase consumer savings, for Keynes - a decline of motives for saving and increase consumption in order to maintain profit expectations among companies. Hayek calls for belt-tightening, Keynes calls on all to go shopping. Hayek Keynes lost the great battle of the 1930s, because the elimination of excesses at the time seemed a political catastrophe in Germany, it led to Hitler's power. As noted by Keynes, if all - households, companies and governments - will simultaneously increase their savings, nothing can stop the decline of the economy as long as people do not become poor so that they simply have nothing more to save.
It is this weakness in the chain of studies has led many economists Hayek to leave his camp and join the Keynesians, with their policy of incentives. According to the economist Lionel Robbins, "In the face of brutal deflation of the time thinking about what you need to cancel the erroneous investment and encourage people to save ... ... seemed as absurd as the idea of not giving a drunken, fallen into an icy pond, blankets and warm drinks, because the underlying cause of all ills was overheating. " Everyone except fans of Hayek, it was clear that coordinated stimulus package in 2009 helped to avert another Great Depression. By the way, bailing out banks and support the economy afloat in the face of massive bankruptcies cost the reputation of many governments and solvency. But to assume that consolidation in the public sector during the period of sluggish private spending ensures many years of stagnation or even recession. Thus, policies need to change. Europe has almost nothing to hope for, the question is, whether Barack Obama will try on the mantle of Franklin D. Roosevelt.
In order to prevent crises of this magnitude in the future, the Keynesians propose to develop tools of macroeconomic management. Hayek's followers have nothing to offer. Their favorite recipe - to abolish central banks as sources of excessive lending - is not relevant today. Economy without central bank will be exposed to erroneous optimism or pessimism. But indifference to the consequences of those mistakes - a bad policy and bad attitude to life. So, despite the fact that Hayek was a philosopher of freedom, he deserved defeat in a dispute with Keynes in the 1930s, he earned it today.
Robert Skidelsky, a member of the British House of Lords
