2013년 6월 10일 월요일

[발췌: G.R. Steele's ] Keynes and Hayek: The money economy (2001)




※ 발췌 / Excerpt : 1 Introduction 

1930s (p. 19 on PDF)

With the banking failures that followed in the wake of the Wall Street stock market crash of 1929, the associated US monetary contraction exacerbated the severity of the Great Depression. In the three years to 1932, US industrial ouptut fell by one-half; and, as British export and invisible earnings fell, the UK was left vulnerable by long-term commitments to investment overseas. As gold reserves fell, UK unemployment rose from 10% in 1929 to 21% in 1931.

  These events raised theoretical policy issues that demanded some immediate response. In January 1930, the UK Prime Minister Ramsay Macdonald appointed an Economic Advisory Council, to advise on the state of the economy and to recommend appropriate action. As a member of that body, Keynes brought together a small ad hoc sub-committee of economists, among whom Lionel Robbins opposed Keynes's proposal to recommend the imposition of import tariffs. Robbis submitted a minority report in support of free trade.

  The Macmillan Committee on Finance and Industry had itself met between November 1929 and May 1931. Here, too, Keynes was involved, both as a member and in submitting evidence. Within that short period of little more than two years, Keynes's opposition, support and opposition to trariff protection gained him infamous reputation: '[w]here five economists are gathered together there will be six conflicting opinions, and two of them will be held by Keynes' (...) More generally, this was a bad time for economics: '[w]hen the most famous and articulate British economist supports first one policy, then another, the making of economic policy very quickly becomes subservient to political concerns, and principle yields to expediency' (Caldwell 1995: 9).

  Keynes's particular involvement with the Macmillan Committee turned on the issue that British foreign earnings were no longer sufficient to cover her foreign lending. With interest rates raised to depress the domestic demand for imports and to boost the capital account, Keynes was open regarding his own position: [t]he consequences of the extreme freedom for foreign lending ... has troubled me since I first studied economics' (Keynes [1929] 1981: 9). When pressed on the benefits from further regulation and asked 'whether he believed that in a closed system there was 'no need why anyone should be unemployed'. Keynes's answer had been an unequivocal, "Yes" ' (Mini 1994: 111).

  Although he was 'brought up, like most Englishmen, to respect free trade' (Keynes [1933] 1982c: 233), Keynes considered that the situation had been changed by '[t]he divorce between ownership and the real responsibility of management'. Measures were now required to countr the effets of 'that remoteness between ownership and operation [that] is an evil in the relations between men' (Keynes [1933] 1982c: 236). Small open economies are too vulnerable to events elsewhere. Tariffs gain the necessary independence for domestic monetary policy. With UK investment below the level of saving, with profits and prices falling and with no abatement of unemployment, Keynes believed that the crus of the matter lay in the level set for the long-term interest rate. There is little doubt that the development of Keynes's macroeconomic theory was shaped with an intention to bolster that conclusion. This gave rise to a series of contentious issues.

  The early 1930s witnessed academic disputation the like of which had not been seen before, nor has been equalled since. The bickering is hard to exaggerate and ㅡwithout invoking an ideological agendaㅡwould be equally hard to understand. Keynes had asked Cambridge's Piero Sraffa to review Hayek's Prices and Production for the Economic Journal. At virtually the same time, Lionel Robbins had asked Hayek to review the two volumes of Keynes's Treatise on Money for Economica. Hayek's two-part review article appeared in August 1931 and February 1932, and was highly critical of Keynes for the concentration upon purely monetary effects to the neglect of the impact of monetary policy upon the structure of production processes:

 ( ... ... )

  However, the full salvo of the Cambridge response came with the publication of Sraffa's offensively hostile review of Prices and Production in March 1932. Hayek's reply was published in June, alongside Sraffa's rejoinder. Thereafer, others joined in, including Ralph Hawtrey, A.C. Pigou and Dennis Robertson. Between 1932 and 1936 Hayek wrote a further ten article on the subject.

  A sense of the passionate commitment can be given: Keynes to A.C. Pigou, '[t]he misunderstanding has been due ... to your supposing that I held' ; to Dennis Robertson, '[w]hat bothers me is not so much that I should have failed to convince you that it is faluse, as that I should have failed to convince you that I deny it!' ; on Ralph Hawtrey, 'like arguing with a madman' ; and to Hayek, 'I am left ... in doubt as to just what you mean by ... ' (cited from Mini 1994: 168-9). Hayek of Keyns: ( ... ... )

  Such comments are typical of situations that are devoid of empathy; that is, where there are 'different (unstated) philosophical presuppositions about the nature of reality implicit in the minds of the disputants' (Mini 1994: 167). There is an incompatibility of vision. That so many issues between Keynes and Hayek were unresolved contemporaneously does not imply that none of them is resolvable. In that prospect of synthesis rest much of the fascination of Keynes and Hayek. It is beyond dispute that 'whatever we may think of the answers, Hayek at least asked good questions' (Laidler 1994: 22) and that although '[t]he effect of the Keynesian revolution was to kill capital theory ... [t]he challenge of integrating money and heterogeneous capital ... still remains' (Desai 1991: 54-5).

( ... ... )

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