Economics as Ideology: Keynes, Laski, Hayek, and the Creation of Contemporary Politics, by Kenneth R. Hoover. Lanham, Md.: Rowan and Littlefield Publishers, Inc. 2003.Trade paper, ISBN 0742531139, $27.95. 352 pages.
Economics as Ideology, although centered on the life and works of the three prominent figures named in the subtitle, actually could just as well have been labeled the "rise and fall of instrumental (or operational) economics" in the recently dearly departed twentieth century. Over a large part of that century, one of depression, world war, and alleged cold war, a running battle was taking place within the ranks of the social science, and especially economics, fraternity. And throughout that intellectual conflict, the three "heavies" in this volume were prominent figures.
The book is divided in its recounting of these intellectual events into the pre-depression era, the depression era, the World War II and post-World War II era, and the seeming victory of right wing economics near and at the end of the "cold war." Of the three, Harold Laski was not an economist, but it is largely with the economic commitments of Laski that the author chose to deal. The polar positions in the conventional spectrum thinking are those of Laski and Friedrich Hayek, the former on the left, upholding government, and the latter on the right, upholding the virtues of the uninhibited free market. But as the book demonstrates, although perhaps unintentionally, John Maynard Keynes was not in a middle position, half left, half right, but in a largely nonideological position.
Much psychologizing occupies the author, himself a political scientist, as to the psychic origins of the positions of the three contestants. But it is clear that their ideas did not come from deeper yearnings in the human psyche; they were themselves a part of the social milieu within which the three were participants. The social and economic problems with which they chose to deal were real, not imagined, ones.
Hayek's economic ideas were well formulated before he arrived at the London School of Economics and certainly long before he arrived, courtesy of the right-wing Volker Foundation, which paid his full salary, at the University of Chicago. He was a product of the Viennese school, the school that initially introduced utility theory in place of the labor theory of value in the mainstream of economics. Although this transposition is often ascribed to the intellectual superiority of...