Hayek may still have lessons to teach us. The policies he recommended during the Great Depression may have been badly flawed but his insight that pro… - John N. Gray

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Hayek may still have lessons to teach us. The policies he recommended during the Great Depression may have been badly flawed but his insight that prosperity cannot be restored by unending expansion of debt may have some value at a time when the limits of “Keynesian” quantitative easing are becoming clear. It is in any case far from obvious that Keynes would have supported a continuation of QE once a disastrous collapse had been averted. “Keynesianism” is a confection of Keynes’s more mechanical disciples, not an indication of how this mercurially brilliant mind would have responded to our present dilemmas. Again, Hayek’s claim that nothing can be done to mitigate the impact of free markets on social cohesion was dangerously misguided. But he was right to point out that capitalism cannot be remodelled to fit some conception of an ideally fair distribution of resources. Whether any kind of social democracy can be reconciled with the anarchic energies of global markets is an open question.