An Example of Right Wing (or Libertarian, or Hayekian) Logic

There's going to be an excellent debate on the radio this evening, between a number of economics, aired on BBC Radio 4.

The theme is Keynes vs Hayek, or as Cafe Hayek puts it, Hayek vs Keynes. On that link is another link to a clip of the debate where one of the Hayek proponents, George Selgin, apparently delivers a beautiful put-down to Skidelsky's Keynesian remarks. Really? For sure, there's some applause, but is that really a put down? For me, its a cheap points scorer.

It kind of also backs up my point about the way Hayek fans argue - they construct straw men. Skidelsky points this out to Selgin, and he retorts with a remark about how clueless politicians are. But is that a put down, a debate winner, about why Hayek was right and Keynes was wrong? On another Hayekian website, mises.org, they've already declared Hayek the winner (surprise!), and there they make the same remark: That Keynesian economics supports the bank bail out.

As Skidelsky clearly, audibly points out, Keynesian economics does not say the government should spend on anything (all the farcical examples Selgin rattles out) - it says that in the absence of any other productive investment opportunities (a highly, highly unlikely situation in any economy and any state of the world), then we might pay people to dig holes and bury things in them. But that's just never going to happen, it's a complete extreme event, and it's classic Hayekian, or libertarian arguing - you contort the position of your opponent so grotesquely that you can easily take care of his or her arguments.

And then Selgin responds with a quip about how politicians had clearly run out of all ideas hence they bailed the banks out. Apparently that's proof that Keynes would have bailed the banks out, that all Keynesian economists are bank bail outers. But it's criticising Keynes and his economics for the botched implementation of his ideas by a government - since when is that the way to criticise someone's ideas?

Sure, Keynesian economics promotes the role of the government, and so libertarians would say this is a natural consequence, but of course its not. The government will always exist, and always has done, and its mere presence as an entity will distort all market activity - this was the case long, long before Keynes came about, as I've been reading recently regarding the Panics of 1873 and 1893 in the US. To blame Keynes for governments doing stupid things is a real cop out of an argument and doesn't even start to engage him on the real meat and bones of what Keynes said.  Straw manism if ever I saw it, and not even slightly helpful for debate...