We were covering political economy in our Intro to Comparative Politics course, and one of my students put me on to this fun little YouTube video explaining Keynes’ and Hayek’s economic theories…
As some of you might remember, I did an earlier blog on how the current economic crisis has demonstrated some pretty big divides between economic theories, and this video is a pretty nice visual of that theory divide!
The final lesson of the video is also pretty interesting. While Hayek clearly presents the better argument (demonstrating the bias of the people who made this video…), Keynes is declared the winner because Hayek’s policies are just politically unpalatable. This very dilemma has also been captured in a recent Economist article about the problems of democracy and debt.
That’s something that economists and political scientists do need to keep in mind: even the most elegant theory means very little when faced with the realities of real-world governance.