of the army, casey, said that it was worth it for diversity. it and is it worth it? but the issue is very much -- we have a little pamphlet called islamaphobia which describes it. this campaign is to prevent people, and of course the news media spoken some of them of course msnbc are raising lunatic leftists. but most of those people are you know, there are just careerists and they are not highly informed and they don't want to offend people. so in the name of not offending muslims, we don't tell the truth. muslims celebrated on 9/11. they will say oh, we are attacking all muslims.

no, we are attacking the ones who celebrated bed they wouldn't say who they were. if it was, i don't know, white celebrating a lynching, everybody would say it is why people doing it and they wouldn't conceal the identity. the fact of the matter is in america today, the fbi crime statistics show that jewish are the most persecuted religion. no question about it. eight times, getting this exactly right. i will appear in media matters as soon as this comes out. [laughter] eight times as many hate crimes against jewish as muslim in this country. a lot of those crimes are committed by muslims. and to me, it is a crime against the jewish students on a campus to have thrown in their face the accusation that israel is an apartheid state when it is the only non-apartheid state in the

middle east. and of course the desire to destroy it, because the model is south africa. they want to destroy the jewish state. call it an apartheid state and erasing it. genocide is the agenda of the muslim students association, students for justice in palestine, hamas, hezbollah, iran and now we have in egypt of course. it is not just a jewish. they are slaughtering christians in egypt because the muslim brotherhood is on the rise. this phony arab spring, yeah there were some good people that went out in the square in cairo, but the revolution in the middle east is a fascist revolution, and it spells enormous trouble and probably wore sooner rather than later.

defines modern economics. the author of ronald reagan and margaret thatcher tackles economic theory exploring the virtues of free market versus one in which the government intervenes. he discusses the competing perspectives and the men who made them famous with u.s. business editor of the economist, matthew bishop. >> host: so nicholas, one of my favorite quotes from john

maynard keynes is the one about how practical men have sleeves for some different economist and you've written a book about two defunct economists, himself, mr. keynes and frederick hayek. why do they matter today? >> guest: it turns out as a great dividing line of modern economics whether you start interfering in the economy and try to manage it and those people who said don't do that because it will only cause an enormous mess and we will have to clear it up eventually. years ago when john maynard keynes is the most influential economist of the 20th century started working out theories which look to the economy in a different way in stiff as a series of business propositions which economists did he started looking at as if he hovered about economics what became known as macroeconomics he looked at the big picture about different elements, different

moving parts and also because he was talking at the end of the twenties when britain suffered unemployment and the time 1929 this of the current collapse of the economy large scale unemployment was a great problem. he was looking at it from a practical point of view if there's anything we can do to the economy which might kill the terrible conditions people not being able to find work for years on end and that was years ago but it turned out that this division between whether you interfere or don't interfere turns out to be the principal political issue of this cycle. it's been submerged for a very long time of least because the cannes the ins when they finally succeed enjoyed 30 years i suppose between 1945 and 1975 intervening the economy and managing it for the benefit of the population. they made the economy bigger.

between 1975 to 2008 we had a different thing. we had the notion that he was right in principle but should try to ration the amount of new money that you ease into an economy so that an economy wouldn't get out of kilter with itself. >> host: and freedom was as hayek. >> guest: he started as the sun or the grand sum of hayek. he didn't think for a much of his economics rather here nor there. the principle was what they fell out with over was economics but actually the strength turned out to be to interfering in the economy because keynes suggested a few can direct, the government may do that, they may cut taxes drastically cabinet they may ease credit to ensure the business activity picks up.

notwithstanding these various things the government may do hayek said yes but all of those things entail increasing the government and there's a problem about that the more that you increase the larger of the proportion of the economy is spent by government agents or people themselves through taxation roger van peebles and not of their own pockets the more likely you are to have a tierney in society. and so he added something which certainly is found i think with a great echo and say that he party movement and the other figures in america as giving some conservatives that actually it is the government itself which is the problem, and that of course is something which has resonated since ronald reagan or maybe even since barry goldwater in the republican tradition. but again, it's this side of the family that's the main traditional republicanism has been like the conservative party in britain of increasing everybody together.

but the hayekians had a different point of view, absolutist about what should or shouldn't be done and the government itself turned out to be the problem of how it was and because keynes solutions with of the work or not was irrelevant in a way the fact was even if they did work and let's say they do work the fact is that hayek said and friedman said that's a bad idea because we don't want the state to be too big because that checks or individual choices and the undermining of free choice. >> host: what strikes me as interesting in the book is the extent to which you get into the personality of how they interact with each other and think about the debate today in politics and there is a real shouting match going on for the tea party right that endorses hayek as vitriolic in its opposition to keynes and likewise paul krugman and the voice of the keynesian school so

i think we can disagree to how much they have endorsed. discoverers and intolerance. in the book it is clear that they have enormous admiration. i'm not sure whether keynes at meijer hayek so much but maybe talk a bit about how that relationship developed over time and did they really respect each other? >> guest: they liked each other in the end. you are right about hayek. keynes hayek already knew as was a famous old r. dee by the time hayek moved into the full employment as an economist. and he did that through the point guard of the treaty of versailles would be tragic for europe and would lead to a second world war. hayek was of course an austrian and was in the austrian army during world war i. he knew from his own personal experience that the amount of inflation that totally devastated austria at the end of the war and keynes was right

about it. that was the way towards the extreme politics. and so he was -- he started off knowing he was a mythical heroic figure and in a way that never really departed from hayek. he always maintained the enormous respect to read by the way almost everybody that came across him. i don't think you could doubt that keynes was the great from the 21st century. he was an astonishing feature. i wish we could meet him. he was capable of juggling many different goals of the same time. his achievements were astonishing even with just one career on track and good he would be an astonishing person. but actually he ran kings college cambridge. he brought pictures from the national gallery. he was on the insurance company -- she used to stay in bed until noon every day on the telephone to the stockbroker saying sell

this. actually [inaudible] he was a speculator. he understood the market even more than the people who say the admiral the market. >> host: so today he is seen as the face of the government where does he was actually in many ways an ardent capitalist back in the 1930's when there were much more extreme views as to what should replace what brought about the stock market crash. >> guest: the problem is knowing too much about the political theory or economic theory in a modern political debate because the words are bandied around so of serve. obama is a socialist and keynes as a socialist. well, not really. really. but anyway, to go back to the keynes and hayek thing, the problem was that he was brought in bye robins who was a professor of economics specifically to counter in the first days for what could be the

battle. he already had a battle with keynes and the bank of england committee or the government committee for the use of the bank of england, and that started off pretty sharp. you must remember, of course, this is not your gentle to and fro of an argument. this is pretty high flame stuff fought on tough measures. keynes was in cannes, which person and his stock in the tree was sarcasm. he could put ad hominem attacks that protected him as every other school away from each other all those years. hayek was literally buttoned up. his jacket have three buttons done up and he was very well mannered, they were both brought up to treat each other properly but when it came to important things like disagreement over economic debates, they took the

gloves off so from the beginning the keynes-hayekian debate was sour. they were rude to each other. other academics came in and said this is not the way to conduct academic debates please don't talk in these terms but it sent a trend that lasts to this day that they despise the hayekians. in fact for decades they pretended they didn't even exist. if you look at robert's genius three biographies of hayek gets barely mentioned. >> host: why is that? >> guest: i guess you could say i was talking to keynes and he didn't take any account of hayek but because keynes did take some account of hayek he found it rather exhausting and after a little while abandoned it and gave it over to millions to counter the harassment. but the so-called cambridge is a wonderful group of young economists around keynes,

whereas pernicious as keynes himself. they learned they would debate things and it could often get very personal. the whole assumption is by the way when you leave tonight when you leave kings college. but hayek was quite capable. one of the things we know about the crispness of the austrian or german speech is that very often at times it is far more abrupt than it might be to a englishmen who has subject and so on but that austrian debate is true even today if we can be taken aback when we come across a profoundly personal question. but in that case hayek gave as good as he got and the result was certainly in the initial

battle the two men actually locked on the did log on and they didn't let go. they barely actually scored a genuine point at each other in the debate on the investment i would like to know more about what you mean by stocks. they got bogged deep down into the weeds and really didn't escapes from it. >> host: so the different views in today's terms how would you define a hayekian or candian? >> guest: hayek is suspicious to manufacture the boom in the economy. hayek was true on this from the very beginning but remain true today and it's austrian economics generally and the market over the long term cures

itself and eventually there will be in equilibrium where everybody is employed once again. >> host: under the austrian economics you can have market failures and bulls and crashes but somehow that is something you have to get used to and live with and ultimately, we will get more prosperous is that the idea? >> guest: absolutely. it is to say they made a virtue of the bottom of the cycle there was destruction which is necessary in order to ensure the economy continues to roll and expand and so on. what they do is they look at the society as it is 9.3 per cent unemployed and some have been unemployed for six months or whatever it is. they start looking at how many young people and how many minorities and so on as a

proportion and it is intolerable and the government as it can intervene should intervene by whichever method they think is best all of which has been tried by this administration. they have made interest rates zero to the horizon so if anybody wants to borrow to invest in anything it's not going to cost anything and they can spend it on the double line. the problem with that is you can't really push on a string. you can expand something but if people don't leap into the void companies have so much cash they don't need to borrow that's not getting very far. keynes also suggested, and this is now almost politically impossible where the fight is to the administration that is government here with congress on the one side and it is not willing to compromise on anything is to directly employ people, the so-called schoeppel ready projects.

we build the roads and so on. it's a matter of current debate right now exactly what obama's job bill says it is all about. that's what we ought to do and we ought to cut taxes if we want to increase demand in the economy like providing the electronic electricity you can do that by cutting taxes. >> host: hayek's view sounds like a counsel of despair since some of us are intelligent the power of government exists to apply or intelligence to try to solve some of these big challenges the world faces whereas hayek's view sounds like basically saying the four intelligence there's basically nothing we can do for the government. it does sound like despair or is there more to it than that? >> guest: there isn't much more to it than that putative is

a pessimistic view of the world. when it comes to some things, knowledge of intervention but it does depend which stage of the discipline you are at and they felt that keynes was a total wrong direction and when he was awarded his nobel prize he said dhaka come here to apologize the economic profession. the fact is we've done a terrible job and it is going to take decades to get hold of and unless we start now, i mean he actually elected everybody saying we take a long time back in the 30's and squinted a one time to ever get back to the free and open society. it does take the question of course when we are talking about politics today exactly what a hayekian econ and become a genuine hayekian economy would look like. it's all very well to be a

hayekian agitator to constantly sniping. we don't want raising taxes or government spending and these are absolutes we are not going to agree to anything. but nonetheless the battle lines are drawn on exactly that. if hayek's world would come about, the size of the economy is very large, but things like pensions, would they do without pension? some people are around the edges of that right now. >> host: he basically said government should only do the absolute bare minimum to allow society to essentially run defense as far as i can see. also in favor of property rights and the law and order. >> guest: the rule of law saying that he what about anything have a rule of law was essential to society to get into

trouble very quickly. >> host: they advise the inspiration by both and very much people regard the statue as to hayek and his thinking. how much did with those two leaders produce actually stand up against what he wanted to achieve? >> guest: they went to the research department and they were discussing what they believe she got out of her handbag this capacious organ and slammed down the road to serfdom on the table and said -- by frederick hayek -- said this is what we believe so there is no doubt what she believed was to introduce for the first time actually to the conservative party and ideology, a checklist

of things you should try to obtain which came out of the book on the conservatives and republicans and they never used to do this, so this is novel. or they really hayekians? frederic hayek with out of his weight to make this clear i am not an adviser to mrs. thatcher i do not advise president reagan. so he always denied that they were. >> host: is it what they were doing or -- they were not whole hard enough. he felt they got the message but in the practical politics saying about the election today it's a matter of the difference between saying or you going to use this in order to nudge the world closer to your way of thinking or do you actually intend to introduce the whole scheme which he recommended and which we are going to have an uncomfortable time however long it takes even if 20 years, an uncomfortable 20 years because also of things will disappear to with the

representative democracy. hayekian believe the market and the prices he thought even things like town and city government shouldn't exist but should be handed over to a corporation. he didn't believe the dollar, sorry, the pound -- the dollar should exist. he believed there should be private companies each issuing currency and we would be eventually come to understand which was the strong currency and which was and and how to use the various currencies. but he also believed by some things that hayekians said there shouldn't be free market and labor around the world. there should be no borders. this runs counter to the people who say that they are hayek or derived from hayekian. but the main problem about reagan and thatcher and there is no doubt that is an indication of the didn't do very much in hayek's terms it shows what a

real hayekian future might be an article that might be because most of us believe that reagan and thatcher noticeably changed the way that we understand the world we live in and give much more credit to the things such as hayek was suggesting, such as the return to the free-market instead of the mixed industries. is unbelievable if you think that when thatcher took over from labor in 1979, the post office, telephone services, steel, shipbuilding, endless amounts of stuff had overtime the state's they had and that privatisation was the beginning of the first step towards the state selling off all the bits that it doesn't need to do. if you have 13 years and the conservatives have been fighting about it ever since with the legacy meant and whether they should continue.

right now we're in an accidental hayekian experiment and the conservative coalition looked at the books and when they had a discussion with the bank of england they were told there was a problem about sovereign debt because britain had borrowed heavily as all western nations borrow heavily in 2008, 2,000 mine disaster and you could do two things, you could even start paying off soon or you could manage the economy and that backend pay yet leader to read in the wisdom cameron and osborn decided they were going to pay it off sooner rather than later and the result is as we can see that they haven't quite gotten to the double dip recession yet, but if the figure absolutely if you're heading south we are talking devotee 0.1 growth in britain. >> host: do you think that cameron and his advisers actually have read hayek or have

any interest in that kind of intellectual debate? at least have a copy in the handbag and read it thoroughly i don't know. >> guest: ronald reagan was a great reader and he too laughed about hayek and all sorts of people, unlikely people, much more serious. but as cameron and osborn read the hayek and keynes, -- >> host: obama certainly hasn't read keynes. >> guest: i think that obama hasn't read too much about economics of all. roosevelt had an instinct for what to do, which obama has less touch. both osborn and cameron read politics philosophy and economics at oxford and i don't think have a real grasp and having a slumber understanding of hayek. it's no good.

>> host: talk to me a bit about the road to serfdom and how that came about and what drove hayek to write that particular point. >> guest: it came about in an odd way. hayek had moved to britain in about 1930. he was none of the things come he was not anti-semitic, he wasn't sympathetic to the right. notwithstanding the fact that he had the letters of recommendation from the general of the bbc and the president of the lsc and everything to get the job to help more time britain she was turned down and that was in the turning point of history they should have used hayek. a great insight into germany and austria and extraordinary brain

was able to tackle things like rationing, practical things you might need to do in the wartime society. but anyway, they said no thank you, and the result was he devoted the war to write what he thought was he was aiming at more to the left than the right. what he was anxious about when the war was over that because the war had been seen to cure unemployment and a keynesian way that the government would increase the size of the state wholesale and he thought there lay the danger of the soviet communism he was more worried about because it had been cured or defeated so that is exactly what he set about trying to do. >> host: and the vicious utilitarianism as a result of

the growth of government it wasn't a sort of cozy social democracy. it was a nasty brutal regime. >> guest: a looked at the evidence it's beyond belief people would ever be given that way but happened to the world and was still going on. it wasn't too difficult. of course it all went terribly wrong because churchill who have read a lot of things and have read the road to serfdom or the explanation of the road to serfdom said and he jumped to the conclusion of the labor party were elective in britain in 1945 that the gestapo, there would be a british firm of the gestapo foolish enough to save this and this came directly out of hayek which allowed, another reason people ended up as hayek because the social democrats had nothing to do with communism at all. communists were the chief rivals

and found them saying they would be just as bad as a communist cell with a single swipe took hayek out of the game. >> host: you talk about how sweden and some of those scandinavian democracies have emerged now in the definition of big government and yet no one would look at those as sort of awful places to live and to what extent is that the reputation of the view? >> guest: i would say very much because it strikes me as the oppressive society, but you don't have to go too far away to find good americans would say to have a single payer health care has tierney to define your liberties. >> host: what hayek have recognized that? >> guest: yes, he did and he

actually had a sniper he never understood properly but it would be interesting to hear what he had to say. they look on the scandinavian countries look on to be trinkle and koln, civilized sorts of places people within their turmoil which has so many of the market choices removed by the government and he said that is why they commit suicide so often if left to sort of dumfounded for a while. >> host: on that note, let's take a short break. today we talk about the hayekian

school and the keynesian school and one could make the mistake of thinking of those schools just a rows back and people admired their work and so forth and decided to follow them they were on a twitter but in reality they were quite delivered builders of the movements and maybe you could talk about how they set about creating an army of followers. >> guest: keynes had a simple way of doing it because he had a product if you liked and wrote by the end that he completed his so-called general theory where he describes exactly how by tinkering with the economy you could make it operate at a higher plane and therefore employ more people at least to its own satisfaction and improve it any way. and because this is a message that so many people wanted to hear, at least in america and a harvard for instance and in the general theory of life they

would reopen and say we are contraband. it was an astonishing thing. and the desire to be at the forefront of the optimistic movement which was how to cure the unemployment which is cursed america for a decade you could see how obviously keynes was a very attractive figure, very eloquent, very sleuth, how that was almost a movement waiting to fall. hayek was in a different position because no sooner had the war ended and keynes large we designed the piece. he was the architect of peace and designed things like the imf. he designed the brentonwood currency flotation or currency fixing marginal flotation operations. so, there wasn't -- you wouldn't imagine hayek to do. he had a very of opinion of himself.

he was rather better known than he was and when keynes died, he said before when keynes was alive i was amazingly well known and prominent economist. as soon as keynes died he was lifted to sainthood and i was turned into oblivion. he was profound for it. this was a lifetime of work and keynes was dead. he had one and in the foreseeable future was keynesian for a least three decades and it is to this day, i would. economics is keynes. so, in defeat, hayek, however, shows the extraordinary reserved personality and character that he has, decided after a very short interval to call all of those people who had resisted to keynes and came from the austrian school who were likely to be sympathetic to trying to find an ideology which would counter keynes' wholesale. he invited them all to a hotel in switzerland not a malt peel

your. that is the principal of what turned out to be the tautological revival of the conservatism. >> host: why is this? >> guest: this is 1946. this is also where conservatives and libertarians got into the same bed. frederick hayek invited as many -- i mean, he knew that they were never to lobby. they would have to be. they didn't invite anybody that looked as though they might agree and left year after year because from that time on the mat year after year after year and they fought with each other all the time. he stormed out when they say in your of the bunch of communists, you know. it was slightly stuff. it would have been great to have been married to be invited to that meeting, to have attended that first meeting is for

conservatives and ideological having arrived on the mayflower this is absolutely key. he had taken a leaf out of his book and he tried to persuade the government through the twenties and the early thirties to adopt his measures and he got nowhere. his ideas that the orthodoxy was so in control to have the unsympathetic government in britain -- >> host: he always used to have it in but found him persuasive. >> guest: churchill did find him persuasive but of the treasury more persuasive. it had to do with keynes. but the rise of hayek's group is interesting because he decided that he would do just as keynes did with a general theory. instead of trying to spend money on lobbying interests or persuading representative congressmen, senators, presidents as a way to go forward, if you convince a large

body of the academic community and they taught people and so on it would become much more firm as a theory and it would allow people to and and not join in as much as they want to and would provide a strand which was deliberately contradictory to keynes, and that's exactly the way it worked out. particularly american large groups, large big business groups or maverick self-made businessman who have always believed tinkering with the economy before the governments get too large is an american thing. >> host: i suppose this led to the chicago boys essentially in that whole movement in the university of chicago that was about the free market economics. >> guest: they were already there they were not as free market and as they are today with a were 20 years ago.

but milton friedman and a couple of others invited to the first meeting thought it was an excuse to go from europe and play bridge in fact they recruited a fourth person so they would have somebody to play bridge with. they didn't to get a very seriously but they had the seriousness of the power i think in fact they didn't think much as i mentioned before us an economist they didn't think that early economics hold much water. >> host: you are right, today the economics and friedman who in many ways the tea party would look to as a sort of economist he actually endorsed much of the framework. >> guest: he said any way we are all keynesian which has been a lead on but he went on to say

the way we understand the world today is macroeconomic. on the other hand, he said, the government is too large and the only ways to cut the government, stop the spending and wait for the pressure of the deficit is much more strong upon the president than it is to have some left over spending as it were. >> host: i'm also struck by how i guess the heroine of the tea party movement ayn rand, she reacted to the road to serfdom with abuse. >> guest: i must say this reminds me about the sort of endless debates that take place on the left as was luxembourg a better or worse percent and was very salami slice into groups and then of course teach the next door neighbor.

>> host: the monty python people mentality. >> guest: he thought he was the biggest compromiser which would come as news to the tea party today but it's true hayek said unlikely things such as if we have this economy i don't see any reason why for instance people shouldn't be given proper pensions and proper health care. everyone should at least have that. that was a step too far for people like ayn rand. >> host: and he told the government to provide that. >> guest: yes he did. something which is rarely mentioned as the logic made perfect sense but everything else is going to be private. there are some things every state should guarantee and that is at least the ability to stay alive and remain healthy. >> host: why did he think the state would be capable of

funding that kind of welfare? >> guest: i think when the national health service was introduced in 1945 no one would imagine the leaps and bounds the health care itself would take, that medicine would take and the cost of it but also of course talking about the pensions invented people were living to country, if you're lucky, four years beyond the pension and now the cost of good health actually due to many of the things that the welfare state helped introduce is brought about we all now live much longer and are much healthier for much longer. so, this i'm not sure if hayek had to revisit it today if he would agree but there might be another way to do it. >> host: in terms of his theories of how much was he actually willing to predict about how the world but actually turnout in reality as opposed to

what it ought to be like he obviously lived long enough to see the collapse in the soviet union and the iron curtain to come down. was he surprised when that happened? >> guest: nothing surprised hayek. he recognized in advance and fought it was a perfect example of the contradictory of the economy and a few sublet the discretion to spend money to a cadre of communist appellate and today from individuals what you end up with is the orders of that entail but better or later there is a collapse because you can't resist the forces of people wanting to trade and spend which he thought was absolutely one of the core things that made it humanity but also he said that if the price mechanism had been invented and this is what we need to do he

said it would be considered the single most important element of human life and the fact this was the key to everything because that is where the millions and billions of people in the world bargained one-on-one with each other and agreed to at least something but he was always very weary of going much beyond that. and he said it will happen. i can tell you what will happen. he was admitting that one of his problems was that when cannes was someone who was a naysayer and didn't have much to put into place he could point out all of the reasons why he was wrong i wouldn't do anything because i wouldn't know enough to do we wouldn't know enough about this. >> host: is this the essence of his theory that it's too complicated for anyone in the position of the authority to

actually be able to know what they were doing was the right thing or was it more about a fundamental view of what one's political freedoms of to be. >> guest: it can from both ankles. there was the in a practical one. it is impossible to understand what is in the mind of everybody and their four how could a government agent make the right decisions. for every 100,000 there is at least as many. that's because he wasn't making a proper market decision himself. it was patronizing he was making the decision on behalf of others and of course he have other agendas. and in his lecture, hayek said that it was a bit light going to a football match where you knew all of the vital statistics of all of the individuals involved

coming to new their abilities to pass or wherever and you knew all of that and you know what the weather was like, you know the time of day was like, the circumstances and the people involved and then trying to predict what would be the result of the game. he said it is impossible to know that much about people and we will never -- >> host: that raises an interesting issue because it is out of the moment it takes an economist as a hero did you with the statistics and come up with a recruit best value for the performance that you can predict and then you've got 18i guess ultimately the red sox within the debate by employing this approach. i wonder whether in a sense hayek, had he known the power that was available now in the

era of the data with their he would have taken a different view as to the technical feasibility of having economic policy that is designed based on pretty good information about the world. >> guest: i doubt it i must say. he didn't believe in the. you couldn't to call postmen were butchers or postal carriers and work out with a there was a sub economy with rules that would apply to the group. he said it couldn't be done. there is a part of the argument that he had with one of keynes' at the lights who as soon as he finished boosting him off he went to finish the job, and one of those arguments is exactly about whether each commodity had its own natural rate of interest. its too technical to get into the fact was that there is a

different natural way for them, there's more and that hayek wasn't prepared to get involved in any of that because he said that was too much of a leap, he probably couldn't even bring the apples together or oranges together. so, he always used to suggest that it was like early surgery. economics is like surgery. it's better to do nothing than to get out your saw and start hacking off limbs. >> host: keynes said economics would be like dentistry ultimately that he would hand over to some technicians to be able to keep my teeth looking good, and i guess you really think that hayek ultimately believed it would never move beyond early surgery and never reached that technical proficiency that keynes felt was perhaps quite close. >> guest: he put so much work on the individual, and i suppose

his admiration starting off with himself he never liked anybody else to the assumptions on his behalf. i think that his own unique. >> host: did he believe in progress? >> guest: i don't know if they would come to the conclusion of progress used to be. it is living in a positive direction and i think that he would say one person's positive is another person's negative you can't just sit and watch it. there is no point to press progress. it's quite the opposite in two weeks' time what's going to happen in six months time by borrowing or getting their faster. but he wanted everything to go to the same speed. host could you describe him as a utopian. surely the essence is a better

perfect world one might live in. one of the problems has went on for a very long time and you will always find places where they affect each other. he had decided that what was missing from his sides logic of the warmth and humanity and the vision that the left have provided and even if it went wrong the fact was that communism started off with an admirable goal and was therefore worth taking and didn't draw a lot of people and not withstand the horrors that had been practiced who still cut their mind on the honorable goal and he said that is what we want to do on our side and that is when he started this very broad brush

with the society might be like if you take the government out of the patient and he would withdraw from everything from the governments and so on. to that extent i think what he wanted to do is to actually move the boundary between where the parliamentary democracy lies and where the markets to charge. the market is in itself space. we make these decisions all the time ourselves. you don't really need to go through the flow syrian reformation. you don't need somebody to translate your books. you don't need to elect somebody. what you want to do is move to a city that has the mayor and the ceo of the city just move to another city said he is an ideal world that it is almost impossible to imagine quite how

and certainly it would come back very quickly it would be immensely painful for a lot of people. >> host: you say he saw the market is essentially space. some would look at u.s. politics in particular and say here's a democracy that's basically become a commodity that the market by is. is that not in the way of the hayekian model of how the government ought to be allocated to the highest bidder? >> guest: it wasn't the way that he imagined it would come about and it's a very clumsy. it's not at all transparent. the great thing is as hayek was concerned about his plans because the market is open, it's open. but everybody knows what of your buddies up to it is to look at the price of something you know what is going on. but we don't with the price of lobbying is. so we don't know the price of the health care compromise is that was reached by spending

money on drug companies and health insurance companies who restricted the way that obama changed the health care profession. what we ended up with is a bargain. >> host: now come in the final chapter of the book, the title and the winner is. what is the current state of place? is keynes bunning is hayek lanning, will that be the result of a stable future? >> guest: the fact is that it is too early to tell. we are waiting for the finishing line on this. certainly we do think we embarked on what is a keynes [laughter] hayek election. i don't think there's anything that has been said by the president that is sent through keynes and his jobs bill which may or may not come to fruition is as manifesto if you like for the level of anger, too, which says this is what we've got to do. raising taxation by the way with

the keynesian. on the other side, i think whoever week and up with even if we end up with mitt romney, his policy would be positioned by the tea party people, and the half, roughly said, we don't want you to raise taxes to be we don't want you to increase government spending in any circumstances. if they hold that line, then the republican will have to find some justification and find a program which says this is how we are going to live out without to the taxation or spending money. also paying down the debt. you need to do that by cutting government services in which case the republican candidate is going to have to point out where and when the cuts take place and how deep they will be and that makes for a very lively debate.

>> host: it seems in your conclusion that ultimately your sympathies come down with keynes. ultimately keynes, see capitalism or capitalism in the 1930's when i guess the hayekian school was saying that whole thing sort of a market, and again, after september, 2008, when lehman brothers failed and the whole market system appeared to be on the brink of collapse, the government, big government came in and stopped the collapse you seem to quote of all people j.k. galbraith who isn't a hero of the hayekian school either -- to quote him basically saying well, you know, the keynesian policies see capitalism and capitalist has their way they would be the people who actually fought and demised capitalism because it's so the unsupported

capitalism is actually an intolerable in the democracy. >> guest: that is the threat from the kinsey and which is unless we do things and make people happier than they are the moment they could tip over into extreme politics or worse. this economy could collapse. the society could collapse as it did in the thirties. we can't return to that. and it's true today i think they said everybody is a keynesian. in 2008 and 2009 you didn't hear very many people even in "the wall street journal" who would say let them off here. that's number one. let's just get on with it everything else can be burned. they were amazingly silent. and so the storm had passed and then that's when people said we should have said all this money on to the stimulus bill and so on. there were some voices. but there were no principled people. i can't think of anyone stature who stood up to say this is

crazy we should let the market run its course, do its work and then we can pick ourselves up and we will be so much better off. and i can't see the gop presidential candidate either saying we have tried all of this and we are not going to do it anymore. we are not going to intervene in any circumstances. >> host: do you think that hayek himself would have went against the bailing out of the financial system and 2008, or what he have been in that situation faced with a meltdown -- >> guest: great question. i have to get an over age aboard out to see exactly what he would have to say. it would be really hard to say because to go back on that would be to go back on almost everything that he said. so i would imagine that he would say you should find out where the bottom is. find out where the price is. what the market tell us how much these things are. >> host: again, to get the

zero lead to a board -- ouija board out and ask one tip for getting the world of this current is what you think is the number one piece of the device would be? >> guest: it's not easy because we live in a world where there are practical considerations. even if keynes for the president, he would find it very difficult for getting through this. i think he would say cut taxes a good deal, i mean a lot, really cut taxes. he would say spend on roads and education, bridges if you can, if you are not allowed to do that, then your stock. and i think that because so much of it has to do with the uncertainty and of the european debt i think that he would find ingenious ways of lifting the whole of the level of the government holdings in the notional gold if you like in

order to get out of it. he suggests such a thing in the past where you have, where every nation would be given pieces of paper which were effectively in gold sums. >> host: what about hayek? >> guest: what he -- >> host: what would she be saying at the moment? >> guest: i think he would say we are in for an uncomfortable ten years. it's we to take us at a long time to get us out of the mess they put us into. >> host: and so in that sense, in a way you've articulated you've got to be kinsey and agenda for the republicans it sounds much more palatable than the purposes of the hayek message which is rather more giving -- >> i can't see any real politician openly espousing the full hayek. there would be difficult. >> host: because it is just so

brutal. >> guest: you have to spell lot how hospitals for close, how many soldiers would be returned, what to do with the city's, they depend on the spending for the military means for instance. we are talking a lot of people's lives changing. people paying intervention funds who now can expect not to receive. this is the truth that no retail and i can't see they have to say that it's hayek doing what they are doing i can't see them doing that. >> host: well, nicolas wapshott, thank you so much. it's a terrific book. >> guest: yes, it was great fun. ..