The great Austrian economist Hayek was the principal defender of the classical policies of Adam Smith and Keynes’s chief antagonist. The classical model of Adam Smith, his “system of natural liberty,” favoured saving, balanced budgets, sound money (gold standard), free trade and laissez faire. Keynes’s “new” economics sought to turn the classical model upside down during economic downturns such as the Great Depression, in favour of consumption, deficit spending, easy money (paper money), protectionism and big government/welfare state. Both models have fought numerous wars since World War II, each winning battles —and both are in contention to fight for another day. After each crisis, Keynes makes a comeback. During times of prosperity, Hayek and Smith’s model recovers. Keynesians and policy officials could learn from Hayek: Inflation is a tiger by the tail, and creates dangerous imbalances and asset bubbles in the economy.
Known as the “maverick” of economics for his contrarian and optimistic views, his sometimes-outrageous statements and predictions, Mark Skousen is a college professor, prolific author and world-renowned speaker. He has made his unique sense of market and investment trends known and respected in the financial world. With a PhD in economics and a focus on the principles of free-market capitalism and “Austrian” economics, Mark Skousen has often gone contrary to the crowd in his investment choices and economic predictions — and has often been proved right.