Hayek Live

I especially like his level-headed responses to the criticisms/questions asked in the interview. He's sufficiently knowledgeable about his field that he never retreats into a purely moral argument (which is a flaw I have seen prop up in other economic thinkers when confronted).
Summer break starts in 2 days, and I've just now found what to read.
Thanks Don for linking this video, it's a real treat.

Crusader — I've found no evidence that Milton Friedman understood the Hayek theory, in fact, production — the heart of Hayek's theory — hardly exists in the Friedman mental universe.

Arguments from authority when the authority lacks competence to pontificate in a specialty beyond his competence is no argument at all.

The idea that Friedman "had the evidence" to "refute" Hayek's theoretical work is laughable.

This has got to be among the more embarrassing things to be found in Friedman, if in fact he said it.

Beware when trolls "quote" people — the quotes are usually bogus inventions.

Fantastic! I have watched only the first 48 minutes, but plan to watch the rest later. Going to sleep now. Thanks Don for finding this Gem. Hayek is an intellectual giant.

Hayek's discussion of the three levels of morality—instinct, that deriving from the nuclear family (which includes much altruism); tradition, that deriving from interaction with others at a distance (as with common law and property rights); and the intellectual central planners with the "fatal conceit" about a grand design for all—was new to me and another welcome insight. Day-to-day life is the chaos of these three levels clashing with one another, said Hayek. His ability to think in this way beyond technical economics is one of his most outstanding attributes.
Thanks for the link to a memorable interview.

When did Friedman say that about Hayek?

Could it have been about the time Friedman came up with the idea of income tax withholding?

Great video. Hayek is awesome. I was just a little surprised to hear him assent so quickly to the proposition that unequal results for things one might find morally dubious (e.g. well-paid strippers) was "unust". I don't see how it is.

To William: in Law Legislation and Liberty Hayek defines Justice(quite strongly) as to do with the law and evolved rules and denies that it has anything to do with feelings or the "innate" emotions that biology has bred into us.

I think Hayek was mealy acknowledging that because of our evolutionary heritage we all cannot help but have an inbuilt sense of morality that finds inequality and other such things abhorrent despite the fact it is not right for a civilised society.

Economic ups and downs have many causes. An irrationally expansionary monetary policy by a central monetary authority is one possible cause, but it's not the only possible cause.

Why should a central monetary authority be the only possible source of irrational expectations of future productivity? What law of nature implies that only a central monetary authority has this effect? Ponzi's "investors" weren't central authorities. Madoff's "investors" weren't either, and he kept his scam going for decades.

Suppose many people, practically an entire generation, mistakenly believe that investing in the most fruitful means of production is unnecessary, even counterproductive. At least, they believe this investment is much less necessary for them than it was for their parents.

These people expect to consume rather than invest in this capital, and they do so for several decades. Because the investments they avoid are very long term and produce no yield for decades in any case, no one really knows the consequences of their disinvestment for decades, and they simply assume that their theory of necessity is correct.

Because these people eat their seed corn rather than planting it, their consumption does increase during the period of disinvestment, and they simply believe therefore that they've become richer. Ultimately, they find their shelves empty and having neglected investment in productive means for decades, they lack the capital to quickly refill them, and their economy contracts.

Wouldn't this mass delusion also account for boom/bust cycle?

One problem I have with Hayek is his assumption of some "natural" rate of interest. Money is not like a parcel of land that can yield only so much fruit without artificial fertilizer. Money is an entitlement to consume or otherwise to command resources. I have no idea what its "natural" yield is or should be.

If I'm entitled to command two unskilled laborers today, am I naturally entitled to command three five years from now? Why is that?