i mean, how would you define today a hayek and keynes? uest: hayek is someone who is suspicious of all government efforts to manufacture a boom in the economy. hayek was true on this right from the very beginning, but the hayek's remain true to the day, and it's austrian economics generally, and then to say actually the market over the long term cures itself, and that eventually there will be an e quill equilibrium where everybody is employed once again. >> host: under the austrian economics, you can have market failures, bubbles, and crashes, but somehow that is something you just have to get used to and live with and that ultimately though the economy will find its own way and we'll get more prosperous, that the idea? >> guest: absolutely. it comes from the school of thought that he made a virtue out of it saying at the bottom of the cycle there's destruction that's necessary in order to ensure that the economy continues to roll and expand and so on. >> host: and keynes? >> guest: that's different. they look at society as it is, the figu

keynes -- hayek already knew in as much as keynes was famous only by the time that hayek moved into full employment as an economist. he did that through pointing out the treaty of versailles would be tragic for europe and would lead to a second world war, which, of course, was triggered hayek was an australian and was in the austrian army during world war ii. he knew from his own personal experience the amount of inflation that devastated austria at the end of the war was, that keynes was right. that was the way towards extreme politics. and so he started off knowing keynes was sort of a mythical heroic figure. and in a way that departed from hayek. hayek always maintained enormous respect for keynes. if there wasn't for churchill i don't think you could doubt that keynes was the greatest englishmen in the 20th century. he was an astonishing creature. i wish we could meet him. he was plainly a person capable of juggling with many different balls at the same time. his achievements are astonishing, even if just one career was on track in good. he would've been an an astonishing person. he

the free volume biography of keynes hayek and it's barely a mention. >> host: why is that? >> guest: i guess you could say i was talking about keynes and he didn't take any effect to that but of course he did sake tv to take some account of that it was rather exhausting and later abandoned and gave it over to the millions to continue the harassment. there is a wonderful group of economists around keynes, whereas pernicious has themselves but they learned literally in cambridge they would debate things and it could get personal. when you leave kings college but hayek was quite capable. one of the things we know about the crispness of the speech is very often it sounds far more abrupt than it might to an english man with everything with subsidiary clauses and so on but the crispness of the debate, and it's true even today if we can be taken aback when we come across the personal question but in that case it was as good as it got and the result was certainly in the initial battle when the two men actually locked on the did lock horns and they didn't let go. they barely, actuall

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 b

he started off on hayek and didn't think very much of the economics. the principle was what was keynese government may cut taxes drastically and ease credit to ensure the activity picks up. notwithstanding all of these various things a government may do he said yes but all of these until increasing the size of the government if there is a problem about that and that is that the more you increase the size of government the larger the proportion of an economy is spent by government agents rather than the people themselves the district taxation rather than people spending out of pocket but more likely you are to have a tierney in society and so he added something which certainly is found with a great echo among the other in america would have been conservative that actually it is the government itself which is the problem, and that of course is something which has risen to needed since ronald reagan or innocence in goldwater in the republican tradition. but then it seems it is this side of the family that is the main traditional republicanism has been more like the conservative party of i

is keynes winning? as hayek winning? >> the fact is it's too early to tell. certainly we do seem to be embarked in what is the hayek collection is anything that has been set by the president that isn't actually pretty good. it's jonesville, which may or may not come to fruition is his manifesto at the lake on a level of anger, too, which says this is what we've got to do and here they are. raising taxation by the way would he keynesian. on the other side, i think whoever we end up with come even if we end up with mitt romney, it will be there his policy position will be guided by the chief party people and they have roughly 5.01 shoe to raise taxes. we don't want to increase government spending in many circumstances. if they all got mine, then the republican parties will have to find some justification and will have to find a program, which says this is how we're going to live without either taxation are spending more money. there will also be an expectation about paying down the debt. you do that by cutting government services, in which case the republican c