Keynes beat Hayek; will Haddad have to beat Tebet?

Although the economic debate has become more pluralistic, its essence remains the same as that which fueled the intellectual contention between John Maynard Keynes and Friedrich von Hayek in the first half of the 20th century, regardless of whether the contenders are labeled liberals and developmentalists, orthodox and heterodox, or by other labels. On one side, those who want to see the State removed from the economy; on the other, those who desire it as an inducer of it.

Hayek definitively lost the debate in 2008, when the application of many of his principles created the environment that generated the mega-financial crisis. Hayekian laboratories had been spreading throughout recent history, the closest example being in Pinochet's Chile, at the hands of Milton Friedman and with the praise of Paulo Guedes. The book "The Shock Doctrine," by the excellent journalist Naomi Klein, details the adventures of the neoliberal group around the world.

The Keynesian experience accounted for the highest level of well-being ever recorded, especially in the post-war United States, until the rise of Ronald Reagan in 1981. The decrease in inequality, the real increase in wages, and things of that nature caused discomfort. A kind of "revolt" of the ectoplasm dubbed "the market" occurred. The prosperity stemming from Hayekian economics in the Reagan era – with Margaret Thatcher as its British counterpart – always meant exclusive prosperity, the accumulation of unproductive money. Nothing to do with socioeconomic development. So much so that today it is conceptually defeated throughout the world, except in the bewildered minds of someone like Paulo Guedes.

It is hoped that an untimely round of conflict along the lines of Keynes versus Hayek will not occur between the future Ministers of Finance and Planning, especially since the former has returned to power and the latter is in a deep academic slumber. Fernando Haddad demonstrates a clear understanding of the need for the economy to be guided, above all, towards the pursuit of equality, development, incentives for production, and full employment. On the other hand, despite being labeled a liberal, Simone Tebet has signaled more social concern than that irritating fixation with fiscal austerity – good signs. The hope is that the PMDB member will not adopt a stance a priori in favor of the “market,” except when the interests of this phantom coincide with those of the country as a whole, if that is even possible. 

Economics is a human science. By all indications, Hayek will continue to slumber at the Chicago School, while Keynes's radiography of the world remains more alive than ever, as evidenced by the following excerpt from his magnum opus, *The General Theory of Employment, Interest and Money*: “What we wish to remember is that human decisions involving the future, whether personal, political or economic, cannot depend on strict mathematical expectation, since the basis for carrying out such calculations does not exist and it is our innate impulse for activity that makes the gears turn, our intelligence doing its best to choose the best that can exist among the various alternatives, calculating whenever possible, but often retreating in the face of whim, feeling or bad luck.”