Analysis Of John Perry 's ' Hayek ' Argument

People do not much like being told what to do; however, people elect rulers to do just that and are angered when things do not go their way. People do not much like making hard decisions, but do not like to agree with people who make them instead. The ultimate debate when taking a position of power then becomes whether to let the people have a voice in making a government or to build one for them to follow. The best way to govern is to make a government for your public to follow, an authoritative government. Authoritative governments benefit people more by creating equality among for their populations, having a faster law making processes, and establishing a better instilment of discipline and moral consciousness.

“After the experience of the trade crisis, of being at the mercy of economic forces, now came the experience of being at the mercy of political forces, which was almost worse, since you could get used to the former and somehow do something for yourself, but there was nothing you could do about the other.”

In the book Rewriting the Rules of the American Economy written by Joseph E. Stiglitz, is able to capture the attention of the reader by bringing the problems with the economy to light as he also discusses the solutions that can help restore the economy. I think the problems that are very prominent in The US’s economy today are so unsatisfactory that as a society it is easy to be very aware of what is going on. The United States has always been thought of as this great and equal country where people have always wanted to live because of this big idea that comes along with living in The United States. The big idea that the land of the free also offers people this chance at The American Dream. Sometimes this idea does not always come true. Instead

This paper will be a summary, review and response to the piece written by John F. Henry titled The Illusion of the Epoch: Neoclassical Economics as a Case Study. This essay written by John F. Henry is an examination of ideas put forward by Karl Marx as well as Friedrich Engel in The German Ideology and their correlation with the principles of neoclassical economics. This idea is referred to as the “Illusion of the epoch” and is described by Henry as being “A conceptual framework in which the ideas of the dominant economic class are the dominant ideas in a society and increasingly present themselves as both abstract and universal” (Henry 28) Basically, this means that those in power and those with influence being political, economic, or even social ultimately decide what happens in society and often these ideas are taken as universal truths despite what may actually be. He goes on to explain how that in a “minority ruling class society” those who are in the minority ruling class must try to rationalize to the much larger working class that the interests of the elites are in the best interest of the society as a whole. In this paper, the Illusion of the epoch will be explored, as well as how this illusion effects economies throughout time. In addition, it will use neoclassical economics as a base point, and respond to assertions made by J.F. Henry in his piece.

Equality and the overall social and economic condition of any country derives from leadership. There is no such existence as a perfect government; however, institutions such as a democracy or the republic, as we see in the United States, have come rather close. Our democratic republic has established a system in which leaders and officials are chosen, directly or indirectly, by the people. In order to succeed in gaining such a position of power, the ideology a leadership candidate transmits must be appealing to undoubtedly, many of the general public. With that being said, throughout history there have existed numerous examples of autocracies— systems of government in which there exists one supreme ruler, or a few people with total control.

He acknowledges that his system isn’t going to be ideal, saying, “Of course, these adjustments are probably never ‘perfect’ in the sense in which the economist conceives of them in his equilibrium analysis” (Hayek 527). This is important because, while the structure may have its flaws, Hayek doesn’t rely on natural balance like classical theory or the government as an ever-present safeguard like Keynes. Instead, Hayek is realistic about the ups-and-downs of the economy, saying that people must swallow the “bitter pill” of tough times in order to keep their free will (Wise). A strong government infrastructure helps the economy persevere through its struggles and thus his economic structure finds a realistic approach to stabilize individual power and

If individuals or countries are left unrestricted to pursue their own self-interest that will have an incentive to specialize to comparative advantage thus making themselves and other better off. More commonly it referred as the advantage of a policy of Laisse Faire, benefits of a free market, allowing the unrestricted exchange, and it is a capitalist market-based solution. The government leaves people free to choose and it is the best for economic policy of wealth creation because are unrestricted so that they can create more money and become rich. It describes to The Big Short: Inside the Doomsday Machine book because the author writes about capitalist economic which is free market and people can be rich on their own without any political power to help people and it gives an example of people who were free and became wealthy. In fact, the policy or system which increases the wealth is because of a do-nothing policy rule. This policy also referred to as a free market policy, capitalism, and letting the market to operate. Also, the do-nothing policy is capitalism and has two ways to get people to comparative advantage and exchange. First leaving people free to pursue their self-interest as they define it maximum freedom, which leaves people alone, not influences people’s values and does not try to help people what is good or bad they choose so it will lead to specialization according to comparative advantage and exchange. Finally, the united states political system is uniquely configuring to favor of the “Do-Nothing Policy” and this is why the united states excel at wealth creation and equality. Also, the Big Short is the story of how in a free market capitalist system people become rich by taking an in their

Hayek is known for his thoughts and ideas about knowledge. He said that knowledge is unique to the time and day and is very individualized for each person. He also stated that we cannot make general rules about anything because the things that we are studying and/or trying to make rules about are always changing. Therefore, if make rules, as soon as we make them they could be false. In chapter 10 of Hayek’s book, The Road to Serfdom, he explains how and why the worst people get on top politically. Hayek says, “There are strong reasons for believing that what to us appear the worst features of the existing totalitarian systems are not accidently by-products, but phenomena which totalitarianism is certain sooner or later to produce”. Throughout

For some it is easy, their duty is to protect the people, however, for others, they go crazy with how much power they have in their grasps. Hannah Arendt has a very strong opinion about the idea of totalitarianism, she talks about how much rulers have and influence on their people. The dictator makes laws, they do not

He cites the example of lottery, inheritance, innate abilities, personal inclination towards risky ventures and value differences contributing greatly to one person's ascent to high ranks and another's downfall. However, we believe that just redistribution of resources is practical and more desirable than leaving people to the mercy of free market forces. It is so because humanity is not about mere efficiency and utility. Unlike bees, we should not and do not throw our inefficient and weak out of our societies, and one's access to better life puts greater responsibility to look out for others with meager resources. This model has worked successfully in countries like UK, Norway, and so on. Even in these countries, if there is inequality (which is true for UK at least), it is just another result of individualistic and capitalistic mindset.

If one were to examine the beliefs of Hayek today, they may seem fairly commonplace. In fact, a lot of what he taught resonates well with the teachings of Adam Smith. How is it that his teachings became so contrary to common practice? The love affair with capitalism was shaken to its core by the Great Depression. As unemployment

He explains that export discipline and import protectionism were the only ways for the developing countries to advance. He touches on the fact that there will be a loss to the average citizen in that they will be paying an “invisible tax” in order to help industrial advancement via industrial policy. This invisible tax is what led to a financial surplus that could be invested into industrial advancement via industrial policy making. My argument is that he is arguing for the unremitting transfer of capital from the common household to exporting corporations, or in layman’s terms, essentially asking for the poorer citizens to release more of the small amount of money they have to finance the industrial sector in promises for better growth tomorrow. Thus this increases the level of poverty in the country. His argument also indicates that in order for this industrial advancement, there has to be a sacrifice of domestic competition, which would be a very large factor in the worlds most dynamic region. This domestic competition is what provides profit for countries and thus providing money to the population. This protectionism and export-focused approach o politics doubly attacks the domestic market and almost ensure a detrimental loss for the common population. Studwell’s argument on the financial situation lacks to provide any attention to the relationship of the capital surplus to the already-wealthy elite. With the excess capital found from the “invisible taxation” can be traced to the pockets of those involved in big business. Being that more capital is brought to benefit the corporations who export product, this also provides a benefit to owners of corporations and for a close relationship between policy makers (and thus policy) and big business owners. The fact that policies benefit big business so well, it also causes the problem of killing small businesses, especially without the benefits of

Friedrich Hayek was an economist and philosopher from Austria-Hungary. One of his main economic beliefs was that markets correct themselves. “'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded.” (Johnston, 2009) In his eyes, producers will change their behavior and production to meet the demands of the consumers. He also believed in laissez-faire, which means that the government should not get involved with economics and leave the market alone. “What our generation has forgotten is that the system of private property is the most important guarantee of freedom, not only for those who own property, but scarcely less for those who do not. It is only because the control of the means of production

Hayek believed in the value of collective knowledge and alluded to its intangible force which, he stated, had the capacity to effectively drive and regulate social affairs as well as economic markets. Spontaneous order, he wrote, was a peculiar phenomenon that, when dissected, yielded information that could be studied and mimicked, but not replicated.

Both, Wheelan and Adam Smith show us how it is necessary just a little intervention from government if we want the market economy to work smoothly. Adam Smith shows the ten unskilled workers who work in a pin factory. First they don’t know how to produce them and their work is slow. They make only twenty pins a day. But, because their goal is to make as big profit as possible, they start to divide their job into branches where everyone does a special job. By doing it often, they start to know they job better and they rarely commit any mistake. In the end, they make forty-eight thousands pins a day. So, because the market’s goal is to maximize their profit (pins) it is better to have minimum interference from government unless they need its help.