Tag: Hayek

That Time We Presented a Bust of Hayek to Yevgeny Primakov in the Kremlin

Crane Presents Hayek Bust to Primakov

Yevgeny Primakov, a Soviet apparatchik who made a very successful transition to the post-Soviet era in Russian politics, has died at 85. He served as speaker of the Supreme Soviet, head of the Russian intelligence service, foreign minister, and prime minister. As Andrew Kramer of the New York Times writes, “With hooded eyes and a gravelly voice, Mr. Primakov struck an image of the archetypal Soviet diplomat and intelligence operative.”

I was in Primakov’s presence once, and that’s the way I remember him. In 1990 Cato held a weeklong conference in Moscow titled “Transition to Freedom: The New Soviet Challenge.” The largest gathering of classical-liberal thinkers ever to take place in the Soviet Union, the event included Nobel laureate James Buchanan, Charles Murray, and numerous Russian scholars and members of parliament. “When Cato’s president Edward H. Crane reminded the large audience that ‘the government that governs least governs best’ … hundreds of Russians clapped and cheered wildly,” the Wall Street Journal reported. “Only a handful of die-hard Communists sat glum-faced, arms folded.” As shown in the photo above, Crane presented a bust of F. A. Hayek to Primakov, then the chairman of the Council of the Union of the Supreme Soviet, as more than 1,000 Soviet citizens attended their first open forum.

Fourteen years later, at another Cato conference in Moscow, Crane reminisced about his encounter:

And it’s been pointed out on numerous occasions at this conference that for civil society to thrive, the institutions of the rule of law, constitutionally limited government, a strict respect for private property and the sanctity of contract, as well as a free and open private sector media are essential. Indeed, there are no great secrets to achieving economic prosperity and a free society, a thriving civil society.

When I was in Moscow for Cato’s 1990 conference, I made that point when I had the privilege of presenting a bust of the great economist and social philosopher F.A. Hayek to Yevgeny Primakov, then chairman of the Council of the Union of the Supreme Soviet. I concluded my remarks by saying, “It is, therefore, particularly appropriate, here in this lavish hotel built exclusively for the Communist Party Central Committee, to acknowledge through the presentation of this bust that Hayek was right and Marx was wrong.”

“It is the Cato Institute’s sincere hope that this bust of F.A. Hayek will rest in a prominent place in the Kremlin where it will remind Mr. Gorbachev and other leaders of the Soviet Union that there are answers, readily at hand, to the problems that beset the USSR.”

Mr. Primakov was gracious in accepting the award, under the circumstances, and said that when he next visited the United States he would present me with a bust of Lenin and that I put it where ever I wanted. I think I know what he had in mind.  

Iceland: Hayek Got It Right

According to recent reportage in The Economist, “Many economists point to Iceland as a case study of what should be done during an economic crisis: devalue your currency, impose capital controls and avoid excessive austerity.” Not so fast.

Capital controls are for the birds. Nobelist, Friedrich Hayek, got it right in his 1944 classic, The Road to Serfdom:

The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.

Happy Hayek’s Birthday

Today is the 115th anniversary of the birth of F. A. Hayek, who honored the Cato Institute by serving as a Distinguished Senior Fellow, and in whose honor the Institute’s F. A. Hayek Auditorium is named. “It is hardly an exaggeration to refer to the twentieth century as the Hayek century,” John Cassidy wrote in the New Yorker. If we’re lucky, the 21st century will also be a Hayek century.

Hayek spoke at Cato several times.  Before his 1982 Distinguished Lecture, he sat down for an interview with Cato Policy Report.  Here’s another interview by our late board member Jim Blanchard that appeared in Cato Policy Report. Senior fellows Tom Palmer and Gerald O’Driscoll have offered appreciations of his work. O’Driscoll more recently applied Hayek’s business cycle theory to the 2008 financial crisis.

Cato adjunct scholar Ilya Somin ponders Hayek’s continuing relevance in this essay from just before the crisis announced itself last fall. Somin notes that Hayek’s critique of socialism gets most attention from scholars, but his critique of conservatism is also worth pondering.

In 2011, on the occasion of the publication of a definitive edition of Hayek’s great book The Constitution of Liberty, his work was discussed in the Hayek Auditorium by Ronald Hamowy, Bruce Caldwell, Richard Epstein, and George Soros. I discussed that event, with a link to the video and transcript, here, concluding 

Hayek was not just an economist. He also published impressive works on political theory and psychology.

He’s like Marx, only right.

As the world suffers from the aftereffects of another Federal Reserve-created bubble, it’s a good time to reread Hayek on the boom-and-bust cycle. But it’s also a good day to reflect that Hayek lived just long enough to see the demise of the totalitarian socialist system that he spent his life analyzing and criticizing. The world is freer today, partly because of Hayek’s great work.

Hayek: The Market and Other Orders

Volume 15 of the Collected Works of F. A. Hayek has just been published by the University of Chicago Press. This volume, edited by series editor and Hayek biographer Bruce Caldwell, is The Market and Other Orders. It contains many of Hayek’s most important papers:

  • The Use of Knowledge in Society
  • The Meaning of Competition
  • The Results of Human Action but Not of Human Design
  • Competition as a Discovery Procedure
  • The Pretence of Knowledge, his Nobel Prize lecture
  • and The Political Ideal of the Rule of Law, lectures delivered in Egypt in 1954-55 that served as early drafts of chapters 11, 12, 13, 14, and 16 of The Constitution of Liberty

That’s only the beginning in this impressive volume, which should be of interest to any Hayek scholar, and indeed any student of economics or complex social orders.

Lawrence Summers, former secretary of the Treasury and president of Harvard, said in an interview for The Commanding Heights, Daniel Yergin and Joseph Stanislaw’s 1998 study of the resurgence of economic liberalism,

What’s the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That’s the consensus among economists. That’s the Hayek legacy.

This volume is a great introduction to those key ideas.

 

Hayek v. Krugman – Cyprus’ Capital Controls

Nobelist Paul Krugman has a propensity to spin and conceal. This allows for deception – the type of thing that hoodwinks some readers of his New York Times column. While deception doesn’t qualify as lying, it also fails to qualify as truth-telling.

Prof. Krugman’s New York Times column, “Hot Money Blues” (25 March 2013) is a case in point. Prof. Krugman sprinkles holy water on the capital controls that will be imposed in Cyprus. He further praises to the sky the post-1980 capital controls that were introduced in a number of other countries.

Prof. Krugman then takes a characteristic whack at all those “ideologues” who might dare to question the desirability of capital controls:

But the truth, hard as it may be for ideologues to accept, is that unrestricted movement of capital is looking more and more like a failed experiment.

Fine. But, not once did Prof. Krugman mention that there just might be a significant cost associated with the imposition of capital controls – a cost with which Prof. Krugman is surely familiar.

Before more politicians fall under the spell of capital controls, they should take note of what another Nobelist, Friedrich Hayek, had to say in his 1944 classic, The Road to Serfdom:

The extent of the control over all life that economic control confers is nowhere better illustrated than in the field of foreign exchanges. Nothing would at first seem to affect private life less than a state control of the dealings in foreign exchange, and most people will regard its introduction with complete indifference. Yet the experience of most Continental countries has taught thoughtful people to regard this step as the decisive advance on the path to totalitarianism and the suppression of individual liberty. It is, in fact, the complete delivery of the individual to the tyranny of the state, the final suppression of all means of escape—not merely for the rich but for everybody.

When it comes to capital controls, I think the Cypriots – even the non-ideologues – might be inclined to agree with Hayek over Krugman.

A Perfect Holiday Album for the Keynesians on Your Christmas List

I’m understandably partial to my video debunking Keynesian economics, and I think this Econ 101 video from the Center for Freedom and Prosperity does a great job of showing why consumer spending is a consequence of growth, not the driver.

But for entertainment value, this very funny video from EconStories.tv puts them to shame while also making important points about what causes economic growth.

The video was produced by John Papola, who was one of the creators of the famous Hayek v Keynes rap video, as well as its equally clever sequel.

IPAB: Yes, It Can

In today’s Washington Post, columnist Bob Samuelson writes:

Then there’s the Independent Payment Advisory Board (IPAB), a body of 15 experts charged with limiting Medicare spending if it passes certain targets. But the law handcuffs IPAB. It can’t increase patient cost-sharing, restrict benefits, modify eligibility requirements or — in any one year — cut spending by more than 1.5 percent, reports the Kaiser Family Foundation.

All four of those assertions about supposed limitations on IPAB’s powers are false, as Diane Cohen and I explain here.

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