Friedrich Hayek

Real wages have barely increased for more than a decade. Banks have had to be bailed out, and many still exist on a form of state life support. Growth has stalled, taxes are at 70-year highs, yet governments are still bankrupt. Unless you happen to be part of a tiny plutocracy made up mostly of tech entrepreneurs and financiers, there has rarely been a point, at least since the nadir of the mid-1970s, when the economic system seemed beset by quite so many challenges as it is today. The left has smartly stepped into the intellectual space that has been created with a series of well-timed polemics, which, while they vary in precise analysis and on solutions, have at least one thing in common. They argue that the system is fundamentally broken, and it will take radical action to fix it.

The Keynesian economist Nicholas Kaldor called Milton Friedman one of the two most evil men of the 20th century. (Friedman was in distinguished company.) The ‘scourge’ he inflicted on the world was monetarism, a product of what Kaldor called Friedman’s Big Lie – of which more later. Moral judgments aside, how does Friedman rank in the world of 20th-century economists? By common consent, he stands with Friedrich Hayek and John Maynard Keynes at the apex of his profession. All wrestled with the defining problem of their age: the radical economic and political instability of the 1920s and 1930s. Their responses reflected their national situations.