Contra Keynes and Cambridge
When the journal Economica published a review of Keynes's Treatise on Money by Hayek in 1931, Keynes's response consisted principlally of an attack on Hayek's own work on monetary theory, Prices and Production. Conducted almost entirely in economics journals, the battle that followed revealed two very different responses to a world in economic crisis. Keynes sought a revision of the liberal political order—arguing for greater government intervention in the hope of protecting against the painful fluctuations of the business cycle. Hayek instead warned that state involvement would cause irreparable damage to the economy.
This volume begins with Hayek's 1963 reminiscence "The Economics of the 1930s as Seen from London," which has never been published before. The articles, letters, and reviews from journals published in the 1930s are followed by Hayek's later reflections on Keynes's work and influence. The Introduction by Bruce Caldwell puts the debate in context, providing detailed information about the economists in Keynes's circle at Cambridge, their role in the acceptance of his ideas, and the ways in which theory affected policy during the interwar period.
Caldwell calls the debate between Hayek and Keynes "a battle for the minds of the rising generation of British-trained economists." There is no doubt that Keynes won the battle during his lifetime. Now, when many of Hayek's ideas have been vindicated by the collapse of collectivist economies and the revival of the free market around the world, this book clarifies Hayek's work on monetary theory—formed in heated opposition to Keynes—and illuminates his efforts to fight protectionism in an age of economic crisis.
F. A. Hayek (1899-1992), recipient of the Medal of Freedom in 1991 and co-winner of the Nobel Memorial Prize in Economics in 1974, was a pioneer in monetary theory and the principal proponent of classical liberal thought in the twentieth century. He taught at the University of London, the University of Chicago, and the University of Freiburg.
Part I. Hayek Comes to the London School of Economics and Political Science
1. The Economics of the 1930s as Seen from London
2. The "Paradox" of Saving
Part II. Hayek's Exchanges with Keynes and Sraffa
3. Reflections on the Pure Theory of Money of Mr. J. M. Keynes
4. The Pure Theory of Money: A Reply to Dr. Hayek, by J. M. Keynes
5. A Rejoinder to Mr. Keynes Addendum: The Early Hayek-Keynes Correspondence
6. Reflections on the Pure Theory of Money of Mr. J. M. Keynes (continued)
7. Dr. Hayek on Money and Capital, by Piero Sraffa
8. Money and Capital: A Reply
9. A Rejoinder, by Piero Sraffa
Part III. Essays on Keynes
10. Review of Harrod's Life of J. M. Keynes
Addendum: Review of Sir William Beveridge,
Full Employment in a Free Society
11. Symposium on Keynes: Why?
12. Personal Recollections of Keynes and the 'Keynesian Revolution'
13. The Keynes Centenary: The Austrian Critique