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Keynes Hayek: The Clash That Defined Modern Economics
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Keynes Hayek: The Clash That Defined Modern Economics

3.8 of 5 stars 3.80  ·  rating details  ·  746 ratings  ·  102 reviews
As the stock market crash of 1929 plunged the world into turmoil, two men emerged with competing claims on how to restore the balance to economies gone awry. John Maynard Keynes, the mercurial Cambridge economist, believed that government had a duty to spend when others would not. He met his opposite in a little-known Austrian economics professor, Friedrich Hayek, who cons ...more
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Published November 7th 2011 by Tantor Media (first published 2011)
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Erik Graff
Jan 28, 2012 Erik Graff rated it 4 of 5 stars  ·  review of another edition
Recommends it for: citizens
Recommended to Erik by: Erik Badger
This book is at once biography, covering the lives of J.M. Keynes and F. Hayek, and an exposition for popular consumption of their respective economic theories. On the latter score it makes for an entertaining, often informative, read. On the former there are some flaws.
Wapshott is a journalist, not an economist, not even a financial journalist. Consequently, some of his exposition of theory is inadequate. I am not an economist myself, but I've been able to read Keynes, Galbraith, Friedman, Mar
This is a dual intellectual biography that discusses the lives and work of Keynes and Hayek and the influence that their work has had (and continues to have) on economic policy and general policy discussions. The discussion is interesting and well informed and does not attempt to oversimplify the differences between these individuals or the nuances in each of their body of work as it developed over the course of their long lives.

For those interested in economic history, this is good stuff -- on
Very balanced, refusing to take sides until the last paragraph (Wapshott gives J.K. Galbraith the last word).

An interesting chronology of the back-and-forth between the two economists and their proteges.

It falls short in two primary ways: it's a very superficial treatment of the actual economics, and it stays in a very binary mode, never really considering hybrids or other schools of economic thought.

So I enjoyed the first half of the book (covering the era before Keynes' death), and didn't lea
Lauren Albert
I don't feel I learned much economics from this. Wapshott gave the "what" but not the "why" or "how." If "a" leads to "b," tell me why. That is what would help me understand the economics. If "a" sometimes leads to "b" but sometimes to "b-" there must be at least one different variable--what is it or can it be. I also would have liked to have more of the personalities of the men--my own bias towards intellectual biographies.
Want to know what the current day Keynes and Hayekcontroversyisallabout?ReadingKeynesandHayekwon'thelp.TheAmericanpoliticaldebatehasonlyapassingrelationshipwiththedebatebetweenthetwo.Thisbookexplainswhattheyweretalkingabout,andhowpoliticalandeconomichistorygotusfromthemtotheTeaParty.

For conservatives concerned over the intellectual vacuity of the Republican Party and Tea Party, this book puts one in complete despair. How do we get from the present situation back to advocating authentically conse
David Rush
Very readable introduction to Keynes and Hayek. I think it is actually more a book of the effects of the two than an economics 101 view on their actual thoughts. so I'm sure that economic geeks bemoan the simplifications of both economists. You get enough to get a feel of the economics and I'm cool with that, especially since I think I end up with more knowledge of what is involved than most people who throw their names around.

My condensation of this condensed fare is that there is more to Keyne
JS Found
The enemy of this engrossing and lucid economic history is binary thinking. We have a war of ideas: between the disciples of John Maynard Keynes and government intervention in the economy vs Friedrich Hayek and classical economics where government has no role to play, and , in fact intervention makes crises worse. This war would play out through much of the Twentieth Century and to our time, as we experienced the Great Recession like a previous generation experienced the Great Depression. In bot ...more
Pedro Dos
After reading this book I have a completely new appreciation for the body of work of both Keynes and Hayek. I have read their work before but never realized how interconnected they really were. It is fascinating to me to see the intertwining of personal life and academic work of two of the best minds of the 20th Century. The book mixes economics with history to portray the ideas of Keynes and Hayek and how they influenced each other and modern economics. I think there was just enough economic te ...more
Otto Lehto
A very polished, almost TOO polished, account of the intellectual battle between Keynes and Hayek.

I would recommend it, despite its obvious shortcomings (most notably its unscholarly tone and its unabashed America-centrism), as a pretty good journalistic, chronologically narrated summary of the basic elements of "John Maynard"'s and "Friedrich"'s contributions to economics - and even more of their influence on the American (and British) political debate, on which this book largely focuses.

The b
Poor. First half of book is he said/she said about competing lectures and articles Hayek and Keynes gave @ LSE etc debating terms. LOL, how exciting. Not sure how I made it all the way through, but I did.

Pro-Keynesian bias to the book (to the victor go the spoils). Fails to discuss the fact that the multiplier is a marginal thing, each successive deficit $ spent has less multiplier effect. Fails to take into consideration of time, with spending funded with debt increasing activity now, but decre
Bruce Dayman
Good historical overview of the economic debate of our time: free market or interventionism? Should free markets dictate how economic policy is created or should the state address market failure? It shows how the key characters, Keynes and Hayek developed their theories of money. The relationship between Hayek and Ludwig von Mises, the main figure in the Austrian school, came into being and the dynamics of their relationship during the 1920s. What is most interesting is the relationship between ...more
I was on the edge between three and four stars for this book. On the one hand, this is an entertaining and well written book, despite the sometimes dry subject matter. It also is pretty good as a popular intellectual history. After the first hundred pages, it really kept my interest. I would recommend it if the subject interest you.

On the other hand, there were some real flaws. The author could have done more to try to explain the substance of the economic ideas being debated...even if it meant
Richard Bravman
Highly recommended for anyone interested in understanding, in depth, the theoretical underpinnings of much of the political, economic and sociological debate that finds us in such gridlock today. It's not easy going, rather dense in some sections actually, but Wapshott effectively uses the human dimensions of the story to keep it moving. Well worth the effort expended in getting through it.
Ed Terrell
"If you put two economists in a room, you get two opinions,unless one of them is Lord Keynes, in which case you get three" remarks attributed to Winston Churchill. Keynes response was "when the facts change, I change my mind. What do you do, sir? "

They fought over everything: words and definitions, sentences and meanings, and finally over ideas and the hearts of men. Keynes desire was to confront real world problems and suffering versus Hayak's interest in theory. While for both net increases we
John Maynard Keynes and Friedrich Hayek, two high priests of finance poured forth from their respective ideological pulpits more than eighty years ago. Their polemics and preaching had such reverberations that they spawned a new divide of loyal pupils. A divide that carries on the legacy long after their Masters have gone.

On one side of the divide resides the freshwater tribe. Advocating theories such as bounded rationality, efficient market hypotheses and rational expectations, the followers of
This was a really nice book, which, as many others, turns somehow worse at the end.

While the history behind the mayor part of the book is extremely interesting and impartial, the last two chapters are biased towards the keynesian view of the current crisis. It claims that the economics that have been applied from Reagan's period till 2008 have been based on Austrian Economics, while it is clearly not the case.

Just an example, Paul Krugman suggested in the NYT, that to solve the Nasdaq crisis t
Earl Grey Tea
After hearing about this topic on the podcast Planet Money, I decided to pick up this book and learn more about these two people and their debate that I've heard mentioned quite a few times. Overall, the book gave me a good background to understand where these two men came from and how different generations interpreted their ideas.

For the first two-thirds of the book, the author quotes lots of source materials from the first half on the 19th century. Most of the text were from letters or book wr
Ondrej Kokes
Being interested in both Keynes and Austrians, I found this book rather interesting. A couple points about this short and enjoyable piece of literature.

1) All the chapters are fairly short, so you can pick it up anytime, dig in for half an hour and resume later.
2) The author quotes very heavily, it gives you a better sense of the Keynes/Hayek relationship.
3) The story is set in specific time frames that nicely separate the different roles the economists played. You start in the early 1900s and e
Robert Meyer-Robinson
For a book that has both the names Keynes and Hayek in ~100 red font on the title page, it bears little resemblance
to a textbook, and can definitely be read by anyone not majoring in economics.
This book is an easy read that really brings the lives of two great economists into perspective.
By comparing how public opinion across various countries changed throughout time, this book
shows how the debate between state intervention in an economy vs. "free markets" swung, and continues to swing back and
Two economic superstars face off in a BATTLE OF EPIC NERDINESS! I love how Wapshott builds Keynes & Hayek from flesh-and-blood men and raises them as giants. He builds up the tension between them and their competing philosophies masterfully, explores the nuances of their philosophical idiosyncrasies, and does it all in a book of digestible size - AND manages to not dumb it down nor ivory-tower it up to unreadable economic blathering.

I love, love this book. I've read it several times. I'm sk
Andrew Carr
A fun and engaging dual biography of two interesting figures whose names are bandied about so often, but their actual words so rarely read. The author manages to do reasonable justice to both, and largely succeeds in bringing their sometimes arcane economics debates down to the level of this common man.

As an aside, there ought to be more dual biographies. Alan Bullock's 'Parallel Lives' on Stalin and Hitler is fantastic, and Michael Duffy's imaginatively titled 'Latham and Abbott' captures some
Christian Dibblee
A very readable, decently short book on Keynes and Hayek. The first part of the book focused on their conflict, and I enjoyed the discussion of those conversations. Wapshott gave a great explanation on the views of each, in particular discussing how Keynes approached the multiplier (stimulating demand for products by giving people a paycheck) and how Hayek approached planning in general (basically, none of it needed).

Wapshott also spends a fair bit of time on the different acolytes for each, whi
My only substantial beef with Wapshott's book is that I felt that he got bogged down a little too much in the substance of the disagreements Freidrich Hayek had with John Maynard Keynes in the 1930s and 1940s. I'm admittedly thickheaded when it comes to economics, but there were long passages about business cycles and forced savings and capital that left me scratching my head and wondering if all that detail was really necessary to the biographical flow of the story. Economics buffs might feel d ...more
Howard McEwen
A disclaimer up front: I bailed on this book about 20% of the way through. So take this review for what it's worth.

I should have loved this book but I didn't. I love economics. I love the debate.

Let's face it, the material can be esoteric. While I have some economic education I found myself swimming in rough waters at times in this book. The writer didn't guide us through the various viewpoints so much as clip a paragraph from Keynes then clip another paragraph from Hayek with a counterpoint. Th
Keynes Hayek is a nicely written narrative on the 20th Century battle between economic ideas during a particularly turbulent period of world history following the Great Depression and through WWII. Economists J M Keynes and Frederick Hayek publicly debated the then imminent questions: "Where will rest equilibrium employment in a free market?", "What is the roll of interest rates in balancing savings and investment?", and, of course, "What is the roll of the federal government in the economy (if ...more
Brian C Albrecht
Wapshott's new and popular book covers multiple disciplines and I love that(my reviews of Peter Robinson's books are almost obnoxious because of that love). Centering around the life of the two giants (biography), the developments of the UK and US (history) are explained. Interweaved is economics behind both men's brilliant writing and commentary. While some chapters (especially the one about Keynes/Hayek argument over the definitions in Keynes' Theory of Price) can be a bit dry, the book has an ...more
Seth Spearman
I really liked this book. I read a fair amount of economics and listen to podcasts (NPR Planet Money, EconTalk).

Much of the modern day discussions of political economy come down to Keynes vs. Hayek.

This review won't be very thorough or organized but here are some random thoughts.

The first thing to notes is that the sound-bite coverage of contemporary issues that goes for politics (and political media coverage) does not really reveal the depth or complexity of the issues. I believe that the "tr
This book is excellent in every way. Very much a biographical drama, it tells an exciting story without really taking sides. Whether you find yourself more sympathetic to Keynes or Hayek, you will be surprised by what you found out about them both. They are both depicted in this book as brilliant and flawed men who contributed greatly to modern economics. The historical details are fascinating and just enough discussion of their ideas is included to give you a sense of what contemporary rhetoric ...more
By Robert Cole

Since the 1930s, one clash has defined both academic macroeconomics and the economic policies of governments. On the left side are followers of John Maynard Keynes, who believe that government actions can and should smooth the destructive swings of business cycles. On the right are those who fear governments and believe in the self-correcting power of markets. They can be considered the friends of Friedrich von Hayek.

Nicholas Wapshott explores this fight in a new book. His account
Tiffoknee the 3rd Conner
My strange fixation with economics continues, quite frankly I hope it never ends. What started as a search for answers to questions about what I was read in the news circa the Lehman collapse and TARP has led me to the discovery of a field of intellectual inquiry I had always been quick to dismiss as beyond my grasp. OK, perhaps it is still beyond my grasp, but I have a better understanding of it, an educated citizen's awareness, if you will, and every time I learn something new about economics, ...more
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Nicholas Wapshott is a journalist and the author of Ronald Reagan and Margaret Thatcher: A Political Marriage. A former senior editor at The Times of London and the New York Sun, he lives in New York.
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