Once at an economics conference I got into a lively discussion. We compared last century to an AFL game. Split into four quarters, it played out like this.
Lenin won the first quarter. Lenin’s success lay in his adaptation of the destructive Marxist determinism and Lenin led the Bolshevic Revolution around 1917. Lenin also noted that businessmen were afraid of philosophy and were so inconsistent that they would even “sell their enemies the rope with which they will be hanged”.
The second quarter went to Hitler. He affected the lives of almost every family on the planet. Not a good century so far, and it’s only half-time.
The third quarter went to John Maynard Keynes. You might know him as the economist who said even the least reflective businessman was a slave to the ideas of dead economists. Keynes’ advice to governments following WWII had a lasting effect.
There is still great debate on whether Keynes’ ideas were good or bad. To simplify it, he recommended to governments that in troubled times they should “prime the pump”. This is done by printing money and expanding government’s role in everything. This is the advice which government’s took, with enthusiasm.
Keynes also suggested that when and if, the economy turned up, they should get the hell out of the economy. That’s the bit they ignored.
The fourth quarter went to another economist, the Nobel Prize winner of 1974. He was Professor FA Hayek, who visited Australia in 1976. More than any other single person, Hayek’s ideas inspired the Thatcher/Reagan revolution. This achieved three remarkable outcomes while the West was deep in the gloom of a post-Vietnam Wat despondency:
- They won the Cold War (by abandoning the previous policies of appeasement). Their advice came from many reliable sources including Milton Friedman, another of my favourite economists. But it was Hayek who convinced them that the Soviet Union lacked moral legitimacy, even among its own people.
- They revived the economies of the West and set in motion an unprecedented period of prosperity.
- They restored the spirit of the Western world, which again walked tall.
In all, it was quite a serious achievement for the last quarter of the century.
The next 100 years
We then turned our attention to the first quarter of our new century. Early days yet, and it’s challenging to identify any predominant economic or political philosophies guiding our current crop of governments.
There is, however, an intensity of competition building in this battle for our minds and hearts. Who wins this battle — between government control and individual liberty — will set the pattern for the rest of the century.
I implore you to be combatants rather than spectators. Get interested, and get involved. Become an intellectual spearhead in this battle. I’m optimistic about the outcome. Mainly because of the many obvious failures of government central planning. They are increasingly plain for anyone to see.