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A bad omen ?

October 11th, 2010

Apparently the Mont Pelerin Society is meeting in Sydney. The proceedings are apparently unpublished, which is a pity, since I would be interested to see how, if at all, members have adjusted their views in response to the Global Financial Crisis. In the absence of this, we can all think about the maxim “bad things come in threes”.

The last meeting of which I heard anything[1] was in Reykjavik, at which time the MPS was happy to share in the glory of its proteges such as David Oddson. There was also a meeting in Chile in 1981, notable for producing an endorsement of the Pinochet regime from Hayek The Chilean economy ran into a severe crisis shortly thereafter. So, let’s hope that this meeting passes off uneventfully, and without any nasty aftershocks.

fn1. Google suggests there have been plenty of other meetings, but these are the only ones I heard anything about.

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  1. Greg Ransom
    October 11th, 2010 at 23:45 | #1

    Hayek didn’t speak Spanish. And he didn’t “endorse” Pinochet. You’ve quoted a translators words, and you’ve left out all context (like Hayek’s experience under a liberal king and the horrors produced under the banner of “democratic elections” in central Europe in the early 20th century, or Hayek’s fairly obvious ignorance of Pinochet’s murder camps, which became widely know later).

    Good show, John.

  2. Greg Ransom
    October 12th, 2010 at 00:09 | #2

    I love it how leftist economists are never criticized by leftists for going to East Germany, China, North Korea, Vietnam, the Soviet Union, etc. For that matter, what liberal economists are criticized for going to those places?

    Is Friedman ever criticized for going to China? No.

  3. paul walter
    October 12th, 2010 at 00:16 | #3

    Well, this Popper’s and Hayek’s old mob. The Open Society and all that.
    They beleive in this so much that they suppress all record of their activiities?

  4. simmmo
    October 12th, 2010 at 08:59 | #4

    @Greg Ransom

    Brad Delong on Hayek: “Social conservative Hayek can see Pinochet as a good thing: far better to have an authoritarian state that maintains the conservative moral order, if it can be persuaded to adopt laissez-faire economics, than it is to have a democracy that regulates the economy.”


  5. simmmo
    October 12th, 2010 at 09:01 | #5


    Perhaps this is part and parcel of the liberal paradox espoused by Amartya Sen.

    Libertarians try to have their cake and eat it too.

  6. jquiggin
    October 12th, 2010 at 09:30 | #6

    Galbraith certainly copped plenty of criticism for praising Chinese economic policy, even without saying anything good about the regime. As I said in the post, Friedman didn’t get criticised for going to China (and criticism of his visit to Chile was unfair) because he made it clear that he didn’t support the regime, but would give economic policy advice regardless.

  7. James Haughton
    October 12th, 2010 at 10:57 | #7

    Joan Robinson received a great deal of flack, culminating in missing out on the pseudo-Nobel in Economics, for her support of Mao.

  8. Alphonse
    October 12th, 2010 at 12:31 | #8

    With Amity Shlaes there blaming Keynes & FDR for prolonging the Great Depression, I think I can predict how members will have “adjusted their views in response to the Global Financial Crisis”.

    Why is Spigelman slumming it? He stands out like dog’s balls.

  9. Joseph Clark
    October 12th, 2010 at 16:28 | #9

    At MPS at the moment. Happy to answer any questions about the secret ceremonies and ancient rituals performed. Also my paper will be up shortly if anybody wants to unveil the mystery a bit.

  10. October 12th, 2010 at 16:47 | #10

    Just a couple of little questions here:

    (1) When did Milton Friedman become a “leftist economist”? To the best of my knowledge, he was in friendly terms with Augusto Pinochet, exchanging limited but cordial correspondence; he went to Chile and delivered a lecture there; his students served the regime; he offered his personal advice to the regime, and, overall evaluated it as positive (as, I gather from Prof. Quiggins’ piece, Hayek did).

    So, I can see little difference.

    (2) In view of the previous, I would ask (as these “leftist” and “rightist” labels seem relative to one’s own ideological position): Friedman is a leftist, in comparison to whom? Hjalmar Schacht, maybe?

    Oh, right, Hayek…

  11. frankis
    October 12th, 2010 at 17:06 | #11

    Karen Maley in today’s Business Spectator http://www.businessspectator.com.au/bs.nsf/Article/Nobel-Prize-economics-labour-markets-pd20101012-A67JK? quotes some good pithy stuff from Hayek’s “Nobel” acceptance speech in 1974:

    The Nobel Prize, he said, “confers on an individual an authority which in economics no man ought to possess.”

    Hayek argued that this mantle of authority did not matter too much when it came to the natural sciences. “Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence.”

    But economists face few such checks. “The influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.”

    And, as Hayek noted, “there is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society – as the press tends to treat him till in the end he may himself be persuaded to believe.”

    It’s an extremely useful warning – both for economists, and for the rest of us.

    Not bad!

  12. Alice
    October 12th, 2010 at 21:40 | #12

    It is a bad omen.

    (I did say it another thread but John Howard is speaker no 13 at this gig of mostly old pelicans)

  13. gerard
    October 13th, 2010 at 20:43 | #13

    I would be interested to see how, if at all, members have adjusted their views in response to the Global Financial Crisis.

    I would anticipate a slight uptick in gold-buggery, but apart from that, nothing. Why would they adjust their views? The GFC was caused by Fannie and Freddie and Clinton’s CRA forcing banks to lend money to poor people. And by market anticipation of Obama’s stimulus.

  14. Alice
    October 13th, 2010 at 21:26 | #14

    Gerard – dont be silly – the poor caused the GFC because they havent been saving enough.

  15. Steve Bloom
    October 14th, 2010 at 05:26 | #15

    I’m sure it’s been pointed out before that the zombie on the cover of Prof Q’s new book (which BTW I saw four reasonably well-displayed copies of in the Emeryville CA Borders outlet this last weekend) bears a remarkable resemblance to Hayek, but OTOH perhaps that’s just a coincidence due to the reverse being true.

  16. Steve Bloom
    October 14th, 2010 at 05:27 | #16


    That’s suffering, not saving, Alice. Get with the program.

  17. Alice
    October 14th, 2010 at 06:47 | #17

    @Steve Bloom
    LOL Steve

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