“Sir, Robert Skidelsky and Marcus Miller (Letters, February 27) consider that the Nobel Prize winner Friedrich Hayek offered a “counsel of despair” in the Great Depression. Next, we have the minatory clichés “writing on the wall” and a call for George Osborne to “change gear” or “let someone else take the wheel”.
“By chance, having literally been chauffeur in 1975 to Hayek at a Mount Pèlerin conference and thus spending some hours with him, may I declare an interest. Hayek was a delightful passenger. His view of the self-adjusting powers of markets is in fact a counsel of well-founded optimism. Indeed, as we discussed, allegedly “austere” Britain recovered from the 1930s slump faster than “New Deal” America where, in H.L. Mencken’s withering phrase, Roosevelt was “addicted to the spending arts”.
“The real “hoax” is the neo-Keynesian delusion that sub-optimal capital projects and monetary manipulations led by the knowledge-poor mechanisms of the state can do a better job than the relatively better informed, risk-disciplined actions of players in properly constituted markets. The Skidelsky / Miller imagery of the economy as a single automobile – a fixed construct with all parts known to the manufacturer – precisely illustrates the misconception that centrally operated levers and controls are appropriate to outcomes in the social sciences, and would have been gently derided by the unfailingly polite Hayek as such..”
- Letter to the editor of The Financial Times from Mr Peter Smaill of Borthwick, Midlothian, UK.
“..But today we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time — perhaps for a long time.”
John Maynard Keynes, “The Great Slump of 1930”
in Essays in Persuasion.
In the long and colourful history of dispatches sent by us with an
adolescently naïve hope to the letters editor of The Financial Times, here is
one that made it through past enemy lines on November 23, 2011:
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