"In the years after 1936, whilst Hayek was working on The Pure Theory of Capital, most economists were convinced by Keynes, whose theory had an elegance and simplicity that Hayek’s did not. Keynes’ theory lacked Hayek’s theoretical rigor in that it was not based on equilibrium (on individual rationality), and there were places in the argument where Keynes relied on loose, informal arguments, preferring to put his trust in intuition rather than formal theory. Keynesians did not solve the problems with capital theory that Hayek had identified: they just bypassed or ignored them. According to Hayek’s methodological criteria, Keynes’ theory was decidedly inferior. Against this, Keynes’ theory provided opportunities for mathematical and statistical analysis that Hayek’s did not. Indeed, though Hayek paid some attention to data, he did so only minimally: he certainly made no attempt to test his theory against statistical data. The choice of Keynesian theory was, at least in part, a methodological one."
Quote Details
Added by wikiquote-import-bot
Unverified quote
0 likes
Historians from EnglandEconomists from EnglandEducators from EnglandFellows of the British AcademyUniversity of Birmingham faculty
Original Language: English
Available Languages (1)
Sources
Imported from EN Wikiquote
https://en.wikiquote.org/wiki/Roger_Backhouse_(economist)
Revision History
No revisions have been submitted for this quote.
Categories
Roger Backhouse (economist)
4 quotes on TrueQuotesView all quotes by Roger Backhouse (economist) →
Related Quotes
"Since the 1970s, interest in economic methodology has grown dramatically, to the extent that it is now possible to vi…"
"Following the financial crisis of September 2008 when the American investment bank Lehman Brothers collapsed, threate…"
"As the title of his 1941 book indicates, the theory of capital lay at the heart of his theory of the cycle. The reaso…"
"It is clear that there are as many different languages as peoples in this island. The Scots, however, and the Welsh, …"
"In the days of my early acquaintance with Henley, some fourteen or fifteen years ago, I could never look at him witho…"
"When men live in small communities, ... they cannot avoid personal participation in some public functions. So it was …"
"It is impossible to maintain that these attributes [caution and progress] have been constant in the two great English…"
"Kynge Henry beynge in Normādy, after some wryters fell from, or with his horse, whereof he caughte his deth: but Ranu…"
"The duke of Clarence and seconde brother to the kynge thanne beynge prysoner in the towre, was secretely put to deth …"
"Fabyan's own merits are little more than those of an industrious compiler, who strung together the accounts of his di…"