Keynes and Hayek After 1936: An Intriguing Silence and Surprising Agreements

Hayek’s and Keynes’s disputes and agreements in the years from 1936 up until Keynes’s death in 1946 focused on their attitudes toward “interventions” in the economy. Their divergence on matters of economic analysis and economic policy after 1936 reflected the separate paths taken by the two: while in 1936 Keynes outlined a theory based on economic arguments that defended “interventions,” Hayek—having growing reservations about the knowledge economists could have—started developing a philosophical argument that led to skepticism about policy. Hayek intriguingly refrained from reviewing the General Theory. The possibility that Hayek remained silent because he was not ready with a counter-theory that could explain the Great Depression and trade cycles, as has been suggested by some scholars, cannot be dismissed. However, Hayek's texts written after 1936 contain many sections directed at Keynes’s ideas; that is, they are responsive to Keynes and could shed new light on Hayek’s intriguing silence. The gaps between the two scholars also hid some agreements about defending the future of capitalism and methodological issues, as well as on economic issues. The variations between the approaches of Keynes, the ‘economist,’ and Hayek, the ‘methodologist,’ were significant; however, they did not reflect the current perception of a colossal gap on policy issues between the two thinkers before 1946.