The Boom and Bust Rap

The Keynes-Hayek rap video is finally here and it's brilliant. The lyrics cover Keynesian economics and Austrian business cycle theory very well but what I liked best were the many ways in which the visuals, the story and the music subtly and sometimes not so subtly (!) parallel the economics–e.g. note what happens to Keynes after the big party!

It's clear that a lot of thought went into integrating the music, the story and the lyrics in order to make the most of this medium and I give my colleague Russ Roberts and John Papola much props.


Isn't the problem with the video that they have not "been going back and forth" for a century, in fact, the Austrians haven't really come up with anything new in 80 years?

Thanks for posting, Tyler! And thank you for the comments.

Max - you’re right. Though I recommend you check out Roger Garrison’s Time and Money. It’s pretty great. Maybe the Austrian’s lack of “progress† is a good thing (I think so). Professor Krugman sure thinks we should turn the clock back on Macro (to Keynes).

Paper sucks! It's the same thing it was a thousand years ago. Worthless!

I'm sure this will reach all the kids who think economics is boring, and all the adults who think rap is horrible.

wow! this is phenomenal! thanks very much for posting!

Hello! VALUE CREATION...Manufacturing, mining, farming, etc...But window breaking and dropping bombs in war?

It was a great video; kudos. But I think the Keynesian arguments weren't given a fair shake. I mean, for example, the broken window reference is clearly supposed to take a jab at Keynes, under the guise of objectively laying out his theory. They could have done a similar reference to the Austrian assumption of wildly irrational drinkers businessmen, but I saw no such thing. Rather, it appeared that the eye-rollingly-named bartenders were forcing Keynes to chug whiskey, as evidenced by the reluctant look on his face as he forces the drinks down, rather than highlighting that it was his own choice to make such a bad decision. The latter is which is what Austrian theory is all about: businesses making irrational decisions.

In addition, the fact that the Keynesian arguments were argued against without a chance for rebuttal, whereas none of the flaws of Austrian theory were addressed, shows a particular bias (psychological studies show that arguments presented second in a series of two tend to be more convincing, when controlling for quality, simply because they "get the last word").

But then again, maybe I'm reading too much into a rap video. Regardless, I enjoyed it, and would love to see more like this!

I hate to say it (especially since I generally think Roberts is a good writer), but I couldn't bring myself to watch the whole thing; it was too cheesy.

I would agree with Libert on the films handling of Keynes. It is irrationally exuberant on Hayek.

If you could lay everything at the feet of interest rates in a Hayekian world, and assumed we were all rational, as Kindleberger said in Manias, Panics etc., you would have to assume an irrational assymetry: "Lenders have money illusion...and are content with the nominal rate of interest. Borrowers do not have money illusion....With real interest rates falling and profit prospects either rising or steady, rational investors expand. The picture is not persuasive. It is doubtful that one group of financial actors will have money illusion and another not." And, if the world were rational, we would not have behavioural economics, either.

I would've liked to see keynes preference for dudes figure more prominently in the party scenes. Other than that, well done.

Who knew the Austrians could sound so reasonable?

I've always liked this economist's singing as well, albeit with a classic rock take:

What do commodity currencies have to do with economics? Ha!

The Austrians certainly do new stuff. Every year it seems there is a new statist mis-interpretation of Keynes to debunk.

My subtle gold point is that some things have eternal value and that explaining that truth and debunking myth to new a generation every generation is making a new contribution.

My main gripe with Keynesians (today) is that they want to trick people with a money illusion and then they forget about the money illusion when a credit bubble is approaching its peak and they forget that bureaucrats are just people too, just as prone to animal spirits as regular folk. Then they mis-characterize Austrians as saying markets are perfect. No, the main distinction of Austrian economics is that markets can be fooled, and the biggest fraud is The Fed. Keynes get up every morning to do what they then deny.

The last 30 years (and especially the last 10) has made it obvious that the perceived value of money swamps everything else in economics in the short-run, just as Keynes (it seems to me) indicated.

My answer to Keynesians who want bureaucrats to manipulate the money supply is the same answer I give to my theocrat friend who asked "even if a perfectly wise and just man could rule as a benevolent dictator, you still wouldn't want that?" and my answer was "If Jesus himself returned, maybe...nah, probably not."

I think Hayek would have a laugh about that "I'll be watching you" video too: everyone thinks he could do a better job centrally planning than the guy who's in charge. Right up until they are actually doing it. Then the excuses begin.

You were surprised at how "subtle" it was that the video paired up with the song and the economics?

Was Sledgehammer by Peter Gabriel the last music video you saw?

I think given the fact that it is Russ Roberts and he definitely has a point of view, it is very even-handed. Hilarious, well done. Hopefully there will be more to come.

I loved the music and the video, especially the catch-line "[Keynes] wants to steer markets, [Hayek] wants to set them free"

I also loved it when Hayek finds Keynes's "General Theory" in place of the Gideon Bible

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