Paul Krugman lately has been seemingly intentionally going out of his way to provoke free-market economists, first by saying Milton Friedman will some day be merely “an extended footnote” in the history of economic thought, and then by saying of Friedrich Hayek: “…back in the 30s nobody except Hayek would have considered his views a serious rival to those of Keynes…”
My simple response is this. Others, however, have done more.
==> Here’s Scott Sumner contrasting Friedman with the Keynesians of his day.
==> Alex Tabarrok quotes Alvin Hansen reviewing Hayek’s Prices and Production in that little-known journal, the American Economic Review, in 1933, where he wrote:
The present volume is, it seems to me, the only book of recent years which at all approaches Keynes’s A Treatise on Money in the impetus it has given to renewed interest and discussion of business-cycle theory. This in itself is high praise. Altogether aside from the soundness of its conclusions, the value of the book and its important place in the recent literature of cycle theory is unquestioned.
Tabarrok also quotes the Nobel Committee, since there was that whole Prize thing, which said: “von Hayek’s contributions in the field of economic theory are both profound and original. His scientific books and articles in the twenties and thirties aroused widespread and lively debate.” (And please don’t tell me there’s no such thing as the Nobel Prize in Economics. I know.)
==> Don Boudreaux quotes that nobody, John Hicks, who wrote in his 1967 article “The Hayek Story”:
When the definitive history of economic analysis during the nineteen thirties comes to be written, a leading character in the drama (it was quite a drama) will be Professor Hayek…. Hayek’s economic writings … are almost unknown to the modern student; it is hardly remembered that there was a time when the new theories of Hayek were the principal rival of the new theories of Keynes. Which was right, Keynes or Hayek?
==> Daniel Kuehn highlights a comment from Ryan Murphy (and clarified by Kevin Donoghue) that, according to Snowdon & Vane, from 1931-1935 Hayek was the third-most cited economist in the world, after Keynes and Robertson.
(However, before you at least give a gracious nod to Daniel Kuehn and Kevin Donoghue–both fans of Krugman–be aware that they are not prepared to say he was wrong. Daniel is turtles all the way down, as usual, in his parsing, whereas Kevin is still open to the idea that Krugman could be technically wrong because Hayek’s mother probably thought he was a rival to Keynes, but other than that Krugman might very well be right.)
==> And these guys actually wonder aloud, “Man, why do free-market economists get so riled up by Krugman? I guess they really don’t like rigorous economic models. Only thing I can think of.”