The Great Pretenders
It is 50 years ago Wednesday that economist Friedrich Hayek accepts his Nobel Prize with a warning about economists.
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It will be 50 years on Wednesday since economist Friedrich Hayekâs Nobel Prize lecture, âThe Pretense of Knowledge,â our Alex Pollock reminds us. That was the speech in which Hayek decried the âaccelerating inflationâ of the day â and the bitter irony that it had âbeen brought about by policies which the majority of economists recommended and even urged governments to pursue.â He concluded: âAs a profession we have made a mess of things.â
It was of a piece with Hayekâs role as a contrarian in the economics profession that his âbrilliant presentation,â Mr. Pollock notes, âexplained the inherent limits of economics and the inevitable failure of trying to make it a predictive mathematical science.â Fifty years on, Hayekâs warning âapplies particularly to central banks and their yearning to be economic philosopher-kings,â Mr. Pollock adds. Is this anniversary being marked by the pretenders at the Fed?
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