Let's Get Stimulated

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Here it is, the rap battle of the century. Who knew it would be between two renowned (and deceased) economists, John Maynard Keynes and F.A. Hayek? Econstories.tv director John Papola and economist Russell Roberts pit these titans of economic thought against each other in two dope rap videos. Nerdcore represent.

Papola and Roberts teamed up last year to bring the first in their Keynes vs. Hayek series, “Fear the Boom and the Bust.” In the video the two economists meet at a conference, but before it begins they have a night out on the town. It’s more or less a traditional hip-hop video if you will, featuring limousines, booze and cash.The lyrics lay out the basic principles of Keynes and Hayek. Hayek argues for the free market and attempts to make the case that aggregate relations in an economy are fallacious because recessions are caused by micro-economic factors. Keynes argues that the government should engage in deficit spending to stimulate the economy when private investment or consumption is down.

In round two titled, “Fight of the Century,” Keynes and Hayek face off in a Supreme Court style hearing.

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This time they battle over the current recession. Here’s a selection of the lyrics:

HAYEK

Let’s not repeat what created our troubles I want real growth not a series of bubbles Stop bailing out the loser, let the prices work If we don’t try to steer them they won’t go berserk

KEYNES Come on, are you kidding? Don’t Wall Street’s gyrations Challenge your worldview of self-regulation? Even you must admit that the lesson we’ve learned is more oversight’s needed or else we’ll get burned

HAYEK Oversight? The government’s long been in bed With those Wall Street execs and the firms that they’ve bled Capitalism’s about profit and loss you bail out the losers there’s no end to the cost

the lesson I’ve learned? It’s how little we know, the world is complex, not some circular flow the economy’s not a class you can master in college to think otherwise is the pretense of knowledge

During the boxing sequences Keyne’s medic is Say and Hayek’s Mises. That would be Jean-Baptiste Say and Ludwig von Mises, respectively. Say and Mises were predecessors to each school of economic thought of the fighters they're tending to.

Although Keyne’s and Hayek are long gone, the battle rages on. It should be noted that the ideas represented in each school of thought have developed over time. They have also been combined, tweaked, and then practiced in both liberal and conservative policies. The truth of the matter is that neither philosophical position is going to be the sole fix for every economic problem. The question of more or less regulation is like asking if we need hospitals to perform more or less surgery. It's a case-to-case basis. We don't need more or less regulation, we need better regulation.