Responding to a comment from Lee Kelly, picking up some loose thoughts that I put out about Hayek and Popper. My initial response was to say that I got it wrong and more work is required.
Although Hayek opposed the state monopolisation and regulation of money, when confronting the reality of those institutions he gave pragmatic policy prescriptions. In particular, he seems to have favoured some type of nominal income target as a rule for monetary policy — not unlike Friedman in later life.
I cannot remember the specifics of Popper’s views on such matters, and he appears to have rarely went into very much detail anyway. But even Hayek can be read to support state intervention in all manner of ways when discussing second best (and more realistic) policies. Would Popper have advocated the denationalisation of money or free banking as an ideal? Did he ever research or understand these concepts? Or was he always analysing these matter in the context of prevailing traditions and institutions?
First up, I never read “The Constitution of Liberty” and other sources closely enough to get clear about Hayek’s detailed program for reforms. The impression was that the whole field of public policy is dominated by statists and interventionists to such an extent that it is next to impossible to get alternative policies on the table – partly for sheer lack of people developing alternatives and then the problem of getting a hearing. BTW I have worked in public health and for about half my professional life, on the policy and planning side, so I can see that point!
Second I don’t know enough monetary theory to have any useful views on private money and free banking etc.
The eternal problem for classical liberals and libertarians is how much to compromise with the system to make incremental improvements and how much to stay pure. Jan Lester’s book converted me to anarchism on principle but in the meantime we have to settle for modest gains (like slowing the rate of growth of the state, before we start rolling it back!) while we try to shift the climate of ideas for long-term gains.
Moving on to Popper’s position on these things, he wrote next to nothing about concrete policies, he was sometimes very careful about putting his name to things that he had not fully researched, there is a letter to Szasz the radical psychiatrist saying he agrees substantially with some of his work but is not prepared to say anything in public at that stage.
He was capable of learning very quickly when he applied his mind but he was very fussy about what interested him, especially later in life (according to Magee). After getting hugely excited about mathematical economics and encouraging Colin Simkin to go that way he never took much notice of what was going on. Simkin said he liked to work out mathematical problems but he never really engaged with economics despite his friendship with Hayek.
I think the short answer is that he did not research or understand the concepts. He didn’t even analyse them in the context of prevailing traditions and institutions. Apart from some very basic (though astute) analysis in the Marx chapters of OSE he never really pursued policies at all, he wrote about the principles of piecemeal reform and situational/institutional analysis which was enough to radicalise the profession in a helpful way if anyone had taken notice. We could have avoided a situation where some of the best brains in the universe spent careers in mathematical economics making no contribution to understanding the world that we live in.
