Alan O. Ebenstein - Theory Quotes

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Notwithstanding the predominant role in academic economic theory that Keynes and Keynesian economics achieved during the twentieth century, his basic outlook and policy recommendations were shaped by the particular experiences of the British Empire's waning years.

Alan O. Ebenstein
Before the middle 1930s, Hayek followed Mises in adopting an a priori conception of the theory of economic activity, although Hayek said he was never an a priorist philosophically. Following Mises, however, he thought at this time that economic theory is strictly deductive from premises. Economic theory consists of laws derived from the pure logic of choice of economic actors. Economics is not an empirical science, Hayek then thought.

Alan O. Ebenstein
Hayek's view was that all the knowledge that is possible of a circumstance is a theory of the circumstance—that is, there is no such thing as pure sensation. There is, rather, a theory of sensation.

Alan O. Ebenstein
It is likely that Hayek was influenced to consider the role of prices in economic activity more substantially than he otherwise would have as a result of Mises's emphasis on the necessity of prices to engage in optimal economic activity. Nevertheless, Hayek stressed that his ideas in economic theory were his own.

Alan O. Ebenstein
Hayek had high regard for Marx in technical economic theory and considered him a predecessor in his business cycle theory. [...] It was not in technical economic theory that the classical Austrians disagreed with Marx. So towering a figure in history is Marx that discussion of his thought in summary form is always difficult, for there is so much that he said and that others have said about him. At the same time, so tendentious, ill-spirited, and just plain wrong a thinker was Marx that it is surprising that he may have had some of the influence attributed to him. Hayek's opposition to Marx was in the realm of practical political emanations from Marx's thought. Here he considered Marx's influence to have been wholly pernicious.

Alan O. Ebenstein
The General Theory is at once both a book of economic theory and a font of economic prejudices—there are probably few academics in economics and political science who do not have an opinion of it, whether they have read it or not. It has reached the status—which it obtained almost immediately—where the fact of its existence is as important, if not more important, than what it actually says.

Alan O. Ebenstein
When Keynes's General Theory was published in February 1936, it obliterated all else on the scene in academic economics. Hayek was known to be working on a treatise on capital as Keynes's work was published (the work that became The Pure Theory of Capital). While there was some anticipation in academia for this forthcoming major work, interest even by economists in Hayek's work waned.

Alan O. Ebenstein
Hayek never really departed from the essential economic theory that he developed during the 1920s, although he expanded and deepened his analysis.

Alan O. Ebenstein
The time component of economic production became vital in Hayek's work in economic theory. Essentially, his economic work could be said to rest on the idea that the price system is a method for coordinating economic activity through time.

Alan O. Ebenstein
Hayek's move from economic theory to political philosophy was a natural evolution in his ideas. First, he considered the influence of prices in production. Then he considered the larger question of the role of prices in social life. The conclusion he reached was that law should guarantee to each person a protected sphere within which each could live as much as possible as he pleased. Later in his career, he progressed to the idea that whole societies through their customs, morals, and rules are engaged in macrocompetition, the survivor of which would possess the customs, morals, and rules that are the most materially productive and result in the highest standard of living for the most—the economist's goal.

Alan O. Ebenstein
Though Hayek decried the practical outcomes of Marx's work and his political philosophy, he had high regard for Marx as a technical economist whose work preceded his own business cycle theory.

Alan O. Ebenstein
Hayek's essential gist in capital theory was that capital is heterogeneous, that it cannot be put to many uses simultaneously or at different times. If these empirical assumptions as to capital's heterogeneity are false, then his theoretical system of economic activity falls. Hayek never established that changes in interest rates primarily and predominantly influence capital production of goods of higher order and their prices.

Alan O. Ebenstein
Hayek always retained the view that money (at least as it has developed institutionally in advanced economies) causes the departure from equilibrium in fact that does not exist in theory.

Alan O. Ebenstein
Hayek was a great historian of economic thought. His reading and writing in the field of economic history were among the influences that shifted his academic research focus from technical economic theory to broader societal thought.

Alan O. Ebenstein
Hayek's trade cycle theory was not in essence the same as Mises's.

Alan O. Ebenstein