Thursday, July 01, 2010

Austrian economics

[Economist Friedrich] Hayek came to Cambridge in January 1931 to give a one-lecture version of his theory to the Marshall Society before starting on his LSE lectures. His exposition was greeted with complete silence. Keynes was in London, but Richard Kahn, who was in the audience, felt he had to break the ice. "Is it your view", he asked Hayek, "that if I went out tomorrow and bought a new overcoat, that would increase unemployment?"

"Yes," replied Hayek, turning to a blackboard full of triangles, "but it would take a very long mathematical argument to explain why."

— Robert Skidelsky, John Maynard Keynes: The Economist as Saviour, 1994, p. 456. [Quoted from Kahn, The Making of Keynes's General Theory, p. 182.]

(via Brad DeLong)

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