The Econ Rap

Sure, many people have already seen these two videos.  After all, the first is over a year old.  Nevertheless, I’d like to draw your attention to them in case you have not.  Although one doesn’t typically see rap music and economic discourse combined, the folks at Econ Stories have done a fine job bringing the two together, resulting in a product that is both entertaining and informative.

After you watch (or re-watch) them both, I invite you to scroll down below for a bit more commentary.

Much like the majority of the populace, with the exception of a few classes at William & Mary, I haven’t had much in the way of formal study of economic theory.  Therefore, after watching these videos, I drove over to Barnes & Noble to pick up a copy of Hayek’s The Road to Serfdom.

As the videos illustrate, John Keynes is much more well-known than Friedrich Hayek and his ideas seem to be in fashion with those in power.  We all are witness to the massive federal spending and their resulting deficits combined with bailouts of private industries and stimulus programs.  During the 2008 Presidential debates, Obama and McCain seemed to joust for position as to who was the most Keynesian.

Even more than the first, Round 2 suggests that Hayek’s positions are superior to Keynes.  After all, it seems fairly obvious that inflation destroys any incentive to save and any current debt must one day be repaid by future generations in either treasure or blood.  Therefore, we have to ask ourselves, do we expect the free market to create greater prosperity or should we leave it to the bankers to steer a prudent course?  Do we want currency tied to some fixed asset like gold or silver, or something that can be easily overprinted and thus rapidly lose value?  Regardless of any perceived merit of Hayek, those in power in the federal government seem hell-bent to continue a Keynesian model.

So, are we all Keynesians, as Milton Friedman stated in 1965, or, as a result of these bailouts and quantitative easing, have we all become socialists as Newsweek suggested back in 2009?  Either way, are the two mutually exclusive?

Give our current economic mess, isn’t it time for a change?

My favorite line from the whole production is, “capitalism is about profit and loss.  You bailout the losers, there is no end to the cost”.  Certainly food for thought.

You can find a much more in-depth discussion of both Keynes & Hayek with the Econ Stories podcast on the iTunes store.  Best of all, it is absolutely free!

4 Replies to “The Econ Rap”

  1. While the first video tried to appear less biased, the second subtly reveals more of the slant of the filmmakers, who are both fond of the Austrian school. I agree that the videos were informative and entertaining, but viewing them and only reading Hayek’s book leans too much in one direction. I find NPR’s Planet Money podcasts much more balanced and generally informative – they’ve even had an episode based on this rap.

  2. I will agree with Mike Dettmer that it would be worth exploring both sides rather than just Hayek.

    I would direct you to this article (http://www.dailykos.com/story/2010/3/1/8929/21462). Yes, its Dailykos, but its written from a pro-Hayek perspective. That said, it is extremely fair to both sides. And he really hits an important point at the end

    Keynes has become a boogie man for a large number of politicians (and people who get their economics from politicians), and what is placed under the banner of Keynes today (by people for and against) relates very little to what Keynes actually advocated.

    Heck, Keynes considered himself a conservative, and his ideas were supposed to buffer against Communism, not drive it there.

    Another good article (from Bruce Bartlett, one of Reagan’s chief economic advisors, but a vocal opponent to a lot of the economics done under W. Bush), explains what I am trying to say better than I can say it.

    http://capitalgainsandgames.com/blog/bruce-bartlett/1168/supply-side-economics-rip

    Keynesian, Supply-Side, Austrian, Chicago-school, and monetary economics have all gone through boom periods where their proponents declared them to be the end all of economic theory (generally to the chagrin of the originators themselves). All have then gone into a bust cycle where an economic problem comes along that they cant solve.

    The reason this occurs is that economic thought does not occur in a vacuum. Take Keynes, for example. His theories drive out of the Great Depression, and do an excellent job of explaining some facets of the economy during that period (particularly deflation). Some of the economists who came after him expanded his theories and declared him to be the end all of macro-economics. However, in the stagflation period of the 70’s, much of his theory was found insufficient to solve the problems, Supply side economics came into vogue. It followed a similar trend line of popularity, then bust when it was found to be unable to address certain problems.

    The overall “collection” of economic thought has taken the good parts of both theories and integrated them into what is done today.

    Or, to put it simply, if you think you have found the guy with the single theory that solves any problem, you haven’t…

    1. Good gravy, that site you recommend certainly covers quite a bit. I expect that I’ll have to go back a time or two in order to absorb some of the finer details that they present. Both you and Mike are right that one should explore differing facets and theories. Like with politics, economics seems to shifts and phases and that which is popular one day falls out of favor the next.

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