Wednesday, May 13, 2009

"Animal Spirits" Obama and Hayek

Back to the future....
I read Lee Cary's following comments today about the book “Animal Spirits” that’s making the rounds in the Obama White House.  It was somewhat interesting, but was no surprise that the book seems to fit the philosophical profile of the Obama team.  However, what I found more interesting was the comment excerpted from Hayek's 1940's "The Road To Serfdom" at the end of Lee's post. 

Animal Spirits, An Obama Book Club Selection

White House Budget Director Peter Orszag... has been spending his time recently reading not about spreadsheets, but about psychology. In particular, he has been reading a new book by the economists George Akerlof and Robert Shiller called "Animal Spirits: How Human Psychology Drives The Economy, and Why It Matters For Global Capitalism."  ("A White House Seized by the Animal Spirits," TIME.)............
The book implies we're irrational economic animals and the government is the wise zookeeper.

The economist Friedrich August Hayek (1899-1992) once offered an alternative understanding of economic freedom than that inherent in Animal Spirits.

 "The economic freedom which is the prerequisite of any other freedom cannot be the freedom from economic care, which the socialists promise us and which can be obtained only by relieving the individual at the same time of the necessity and of the power of choice; it must be the freedom of our economic activity which, with the right of choice, inevitably also carries the risk and the responsibility of that right."The Road To Serfdom"

I had heard Hayek’s name mentioned along with Keynes since the initial bank bailout discussions last year, but had never bothered to do any research on him until today.  I’m glad that I did – he possessed an exceptional ability to layout in simple terms the drivers of societal events and the unintended negative consequences of actions taken by people of good will.  Interestingly, some of the same elements that led up to the social changes in Europe prior to WWII, seem to be afoot now (as has been said, people are people – we continue to possess the same imperfect characteristics articulated in the Old and New Testament, as well through Shakespeare’s and Stephen King’s works).
If you’re interested in reading more from Hayek, here's the Reader’s Digest version of the Road to Serfdom.. I’d also recommend reading Walter Williams introduction to it. He does a great job of putting the work in perspective.  It’s amazing how appropriate Williams’ 1999  written comments, and Hayek’s 1944 thoughts are today.
 I also found an interesting 18 page cartoon script initially published by Look Magazine, and then ironically enough republished by G.M in the1940's, that summarizes "the Road to Serfdom".   The same cartoon has also been published here as a five-minute scored video.
I'm now reading whatever I can find of Hayek's work.....
Here's some additional background information.

Video Of The Week

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