Thursday 28 April 2011

The Old Austrian Had a Lot of Fight in Him

The summer of 1978, I was 16 going on 17 and getting Keynes dunned into my skull for A'level economics. Britain was truly bust, with the IMF trying to pull it around: inflation and unemployment were both soaring.  That was the point at which my father sent me the only book he ever bought for me: Hayek's 'New Studies'. Sometimes the book you need finds you. Anyway, I devoured it.  At the time, it was 'The Campaign Against Keynesian Inflation' that gripped me, as it argued its way straight through the micro distortions. My family used to run textile mills, and I knew, absolutely knew, he was right. This was the stuff I'd known all my life.  

In retrospect, though, its the short 12-pager, 'Competition as a Discovery Procedure, ' which still strikes me as absolutely fundamental.  

Anyway, armed with my newly-found microeconomic foundations, I came to my lessons with a new enthusiasm. My teacher dismissed Hayek as 'some very old fashioned Austrian, I think,' with the assured put-down Hayek must eventually have wearied of. 

I spent the rest of the year arguing the undiluted Keynesian curriculum into the ground, and eventually the teacher handed me the class and made me teach it.  And so on to university . . . . 

There is a dreadful prequel to this story. My father was a bright boy, and won a place at the LSE to study economics. But his father - my grandfather - marched into the headmaster's study, slammed his fist on the desk and pronounced: 'No son of mine is going to the LSE.' Stuffed with Lefties, of course. And the irony? Had he gone, my father could have been taught by none other than Friedrich von Hayek. 

Enough personal stuff - here's a video I enjoyed  a lot . . . . 
   

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