Friedrich A. Hayek class on MRUniversity

by on December 19, 2013 at 2:14 pm in Books, Economics, Education, Web/Tech | Permalink has a new class on Hayek’s Individualism and Economic Order, free on-line pdf version of the book is here.  The class is based around my reread of the book — often considered the single best introduction to Hayek — and what I learned from each chapter., whether positively or negatively.

The MRUniversity videos are now available on the homepage of MRU at the end of the Great Economists section.  There is also a landing page for all of the Hayek videos at once.

Overall the book held up very well upon my reread.  The most interesting chapters — at least given my initial margins — were Hayek’s liberaltarian take on economic policy and Hayek on the likely evolution of European federalism.  Hayek makes the very interesting argument that EU-like institutions will be classical liberal by default, as non-intervention tends to be the focal default point when conflicting nations cannot agree on very much.  He thus thinks that supranational institutions, while often motivated by peace at first, over time become an instrument of economic freedom.

We invite you to check out the class, and of course there is more to come.

Ray Lopez December 19, 2013 at 2:52 pm

Re-read of the book. Does a book’s contents change upon re-read? Can the same stream be crossed twice? The works by Keynes come to mind: they are so opaque that different people read different things from them. For example (I’ve never read the originals, thankfully), it’s said (Robert Skidelsky?) that Keynes is in fact a closet capitalist, that he wanted, like FDR, to save capitalism by adopting some elements of the then fashionable communism, which makes sense, to prevent a total conversion to communism. Further, Keynes deficit spending is only to be used in bad times, not all the time, as politicians later did. Likewise Hayek probably adopts some socialist elements into this theory, since he was, like us, living in a mixed economy. And game theory in fact predicts that given imperfect competition, a mixed economy gives the best output–in theory. I personally wish however we got rid of Social Security and transfer payments except in dire need and cut government to 10% as per pre-Keynes, as that would boost output to 19th century levels. But we need a few more decades of stagnation and perhaps a few more Great Recessions but hopefully not a revolution before the masses adopt this worldview. Do I make first comment? Let’s see…

Enrique December 19, 2013 at 3:29 pm

The book doesn’t change upon your rereading of it; you change! That is, the more you read and learn and engage in Bayesian updating, the more you and your ideas grow and change … If you are true Bayesian, at least

FC December 19, 2013 at 3:32 pm

Throw your hands in the air if you’s a true Bayesian.

Rahul December 20, 2013 at 12:57 am

…No true Bayesman

TuringTest December 20, 2013 at 11:46 am

Poppycock … We are all Bayesians

Axa December 20, 2013 at 8:44 am

Yes, books change upon re-read. Books are not isolated islands, they reference things from the world. As you get older, you understand better those references.

ummm December 19, 2013 at 5:02 pm

Hayek argued that a monopolistic governmental agency like a central bank can neither possess the relevant information which should govern supply of money, nor have the ability to use it correctly. Well, Bernanke sure proved him wrong. Thank you Bernanke for doing a great job keeping the stock market rallying.

Central bank intervention, bailouts etc and poverty/socialism are not mutually inclusive. Capitalism and the US economy is thriving. Look at all the cool innovation we have; iphones, movies steaming on demand, snapchat, bitcoins, facebook, etc . Bailouts are effective because they allow the parts of the economy that are thriving to not be weighed down by the sectors that are struggling, in the process restoring confidence and sequestering problems for a relatively small amount of money. The ROI on TARP as measured by wealth creation since its inception would make it perhaps the most successful government program ever.

Hayek also wrote that the state has a role to play in the economy, and specifically, in creating a “safety net”. He wrote, “There is no reason why, in a society which has reached the general level of wealth ours has, the first kind of security should not be guaranteed to all without endangering general freedom; that is: some minimum of food, shelter and clothing, sufficient to preserve health. Nor is there any reason why the state should not help to organize a comprehensive system of social insurance in providing for those common hazards of life against which few can make adequate provision.”

But doesn’t that contradict his opposition to central planning? Nonetheless, the govt. has no obligation to provide those things, nor should it.

Brian Donohue December 19, 2013 at 5:11 pm

SOCIAL INSURANCE (emphasis added)

Ray Lopez December 19, 2013 at 6:17 pm

@ ummm: “Look at all the cool innovation we have; iphones, movies steaming on demand, snapchat, bitcoins, facebook, etc” — but still no flying car, as P. Thiel has pointed out. Blame our antiquated patent system, which does not reward true innovation enough. An Alex T type prize system, even ex post, even if the inventor did nothing (akin to today’s copyright, where you automatically get a copyright even if you don’t register, though registration does have other benefits) is called for.

Off-topic: This week’s Brad Delong on inequality, quoting a French guy, is awesome. Check out his blog. The French guy’s Powerpoint presentation is to die for, with historical data showing inequality and other cool facts going back 200+ years. check it out.

Ricardo December 20, 2013 at 12:53 am

I believe Hayek thought that even a classical liberal government could redistribute income sensibly (e.g. Milton Friedman-esque negative income tax or minimum income guarantee) but should not be involved in the provision or distribution of goods.

Barclay December 19, 2013 at 5:12 pm

Thank you. Please keep them coming.

theyenguy December 22, 2013 at 7:25 pm

You write Hayek makes the very interesting argument that EU-like institutions will be classical liberal by default, as non-intervention tends to be the focal default point when conflicting nations cannot agree on very much. He thus thinks that supranational institutions, while often motivated by peace at first, over time become an instrument of economic freedom.

I am not a libertarian, that is one who lives out of the economic concept of freedom. Rather, I am a dispensationalist economist, who lives out of the person of Christ.

In EconomicReview Journal, I blog on the dynamo of regionalism, as I comment on Liberalism and Authoritarianism, in light of dispensationalism.

I’ve often written that an ism is defined as a process that produces a state-of-being from ideas; one adopts an ideology, and then embraces an ism, and the two produce the individual’s state-of-being, where one has life experience.

There be many isms; every person, has an ism: each individual has economic action out of some movement.

Liberalism’s dynamos of creditism, corporatism, and globalism established economic systems such as India’s terrifically corrupt capitalism, France’s municipal finance socialism, Greece’s pork and patronage socialism, Australia’s crony capitalism. People living in democratic nation states had life experience out of liberalism’s isms.

Some strive to be libertarians, and read Hayek, Mises, and Rothbard, string to have experience out of libertarianism.

Ever since President Nixon abandoned the gold standard, and up until October 23, 2013, people have had economic action out of the movement of bankers and nation state leaders operating in policies of investment choice and schemes of debt trade investing and currency carry trade investing.

The Revelation Of Jesus Christ, which foretells those things which must shortly come to pass, these being presented in Revelation 1:1, means a series of events, that once they begin, as they did on October 23, 2013, when Jesus Christ, acting in dispensation, that is in the administration of all things economic, PIVOTED the world from the paradigm and age of liberalism into that of authoritarianism, by releasing the First Horseman of The Apocalypse, presented in Revelation 6:1-2.

Authoritarianism’s singular dynamo of regionalism produces regional governance and totalitarian collectivism; increasingly people will be living in regions of economic governance, and having life out of totalitarian collectivism. Increasingly people will have economic action out of the movement of regional nannycrats operating in policies of diktat and schemes of debt servitude

Rather than looking in the economic rear view mirror, by reading Hayek, Mises, or Rothbard, and doing like Ron Paul is doing in calling to end the Fed, one should be looking and searching bible commentary to come to understand the Beast Regime, Revelation 13:1-4, its Sovereign, Revelation 13:5-10, and its Seignior, Revelation 13:11-18, that is the top dog monetary and economic lord, who in minting diktat money takes a cut, and to understand that the bond vigilantes operate the “Means of Economic Destructionism”, that is the Benchmark Interest Rate, $TNX, and to understand that nannycrats are rising to power, working in the dynamo of regionalism, which is powering up diktat policies of regional governance, and schemes of totalitarian collectivism.

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