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HAYEK, KEYNES, AND THE ORIGINS OF NEO-LIBERALISM: A REPLY TO FARRANT AND MCPHAIL*

Published online by Cambridge University Press:  03 August 2012

BEN JACKSON
BEN JACKSON*
Affiliation:
Oxford University
*
University College, Oxford OX1 4BHbenjamin.jackson@univ.ox.ac.uk
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Abstract

In reply to the comment by Andrew Farrant and Edward McPhail on Ben Jackson's article ‘At the origins of neo-liberalism’, this communication briefly examines the development of the political thought of Friedrich Hayek in the 1940s. It argues that the chronology of Hayek's critical analysis of the ‘Keynesian welfare state’ is more complex than Farrant and McPhail suggest. Farrant and McPhail underestimate the extent to which neo-liberalism in the 1940s was a body of ideas in flux, trying to come to terms with a changing political context, but not yet achieving a mature and stable ideological statement.

Type
Communication
Information
The Historical Journal , Volume 55 , Issue 3 , September 2012 , pp. 779 - 783
Copyright
Copyright © Cambridge University Press 2012

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Footnotes

*

I am grateful to Julian Hoppit, Zofia Stemplowska, and an anonymous Historical Journal referee for comments on an earlier version of this article.

References

1 Jackson, B., ‘At the origins of neo-liberalism: the free economy and the strong state, 1930–1947’, Historical Journal, 53 (2010), pp. 129–51CrossRefGoogle Scholar; Farrant, A. and McPhail, E., ‘A substitute for socialism? F. A. Hayek and Keynesian full employment policy’, Historical Journal, 54 (2011), pp. 1115–23CrossRefGoogle Scholar.

2 Farrant and McPhail, ‘Substitute for socialism?’, p. 1115.

3 Jackson, ‘Origins’, p. 148. Since I wrote the article, the long-running debate between Hayek and Keynes has attracted greater public attention thanks to the publication of Wapshott, N., Keynes Hayek: the clash that defined modern economics (New York, NY, 2011)Google Scholar. For helpful critical commentary on Wapshott's book, see T. Congdon, ‘How Keynes overwhelmed Hayek’, Times Literary Supplement, 29 Feb. 2012.

4 I am not the only person to have made this case. Hayek's biographer has made the same point in response to another piece by Farrant and McPhail: Caldwell, B., ‘Hayek on socialism and the welfare state’, Challenge, 54 (2011), pp. 84–8Google Scholar.

5 The planning discourse of the 1930s, and its divergence from Keynesianism, is deftly set out in Ritschel, D., The politics of planning: the debate on economic planning in Britain in the 1930s (Oxford, 1997)CrossRefGoogle Scholar.

6 F. A. Hayek, The road to serfdom, ed. Bruce Caldwell (Chicago, IL, 2007 (1944)), p. 85.

7 Ibid., pp. 148–9.

8 The paragraph on Keynes is given a close reading by Wapshott in Keynes Hayek, pp. 194–6. Wapshott notes that it ‘is hardly the robust demolition of Keynes's General theory that Hayek had long promised’ (p. 195).

9 See B. Caldwell, ‘Introduction’, to B. Caldwell, ed., The collected works of F. A. Hayek, x:Socialism and war (London, 1997), pp. 37–47; B. Caldwell, ‘Introduction’, to Hayek, Road, pp. 3–9; Jackson, B., ‘Freedom, the common good, and the rule of law: Lippmann and Hayek on economic planning’, Journal of the History of Ideas, 73 (2012), pp. 47–68CrossRefGoogle Scholar.

10 Brooke, S., ‘Revisionists and fundamentalists: the Labour Party and economic policy during the Second World War’, Historical Journal, 32 (1989), pp. 157–75CrossRefGoogle Scholar; Brooke, S., ‘Problems of socialist planning: Evan Durbin and the Labour government of 1945’, Historical Journal, 34 (1991), pp. 700–1CrossRefGoogle Scholar; Toye, R., The Labour party and the planned economy, 1931–1951 (Woodbridge, 2003), pp. 185–235Google Scholar; Tomlinson, J., Democratic socialism and economic policy: the Attlee years, 1945–1951 (Cambridge, 1997), pp. 124–46, 211–36Google Scholar.

11 F. A. Hayek, ‘Preface to the 1956 edition of The road to serfdom’, quoted by Farrant and McPhail, ‘Substitute for socialism?’, p. 1122.

12 Hayek, F. A., The constitution of liberty (Chicago, IL, 1960), pp. 253–4Google Scholar.

13 Jackson, ‘Origins’, pp. 147–8.