Blame Skidelsky For The Keynes "Central Plan" Fiasco

I have now had a chance to view the Econ Stories pieces done by John Papola with Lord Robert Skidelsky, including the one that supposedly provides the basis for the now-controversial Round Two of Keynes vs. Hayek, particularly the remark by "Hayek" accusing "Keynes" of having a "central plan." It is unclear what preceded the remarks by Skidelsky, but in the video showing him discussing the matter, with his comments interspersed with pieces from the Keynes vs Hayek video, there is no question that he asserts that Hayek was most motivated to criticize Keynes by his own fear of Soviet central planning (and his participation in the socialist planning controversy), even as he (Skidelsky) admits that Hayek never accused Keynes of being a central planner. Rather the issue was that he saw Keynes as a "thin wedge" for others who might be "let loose" to support such central planning: http://www.facebook.com/video/video.php?v=10150165612007003&=281384538984 .

What is really curious about this is that, as I commented before on an earlier thread on this, in his 2006 article, "Hayek vs Keynes: The Road to Reconciliation," which appeared in the Cambridge Companion to Hayek, 2006, Skidelsky never mentions this at all. He identifies Hayek as differing with Keynes on "where to draw the line" in government activities and also on his criticism of the "money motive." Skidelsky is clear that Hayek never thought Keynes supported central planning.

The discussion in the video is rather strange. Skidelsky is clear that Hayek never commented directly on Keynes's General Theory in print. He states that if Hayek did comment, particularly in bringing up this recently developed central planning critique, he did so "privately." In effect, he reconfirms that Hayek never made such an argument in print, although there is no question that Hayek was much involved with the socialist planning controversy beginning in the 1930s.

One item that Skidelsky seems to have missed is that during much of the 30s Hayek was working on his Pure Theory of Capital, published in the early 1940s, and reportedly viewed this as his fundamental critique of Keynes's ideas. The book did not get much attention, and it was after it was published that Hayek pretty much gave up arguing about Keynes's macroeconomics, although he would return to make comments about it later, more on grounds of its inflationary potential, again, not anything about some tendency to central planning.

Recently reported letters from the early 1930s by people on both sides of the debate also show no signs of any focus on central planning as an issue. The letter by four London economists, including Hayek, criticizing Keynesian views, focused on the role of hoarding, arguing for stimulating investment over consumption, criticizing public investment ("not a time for new municipal swimming baths"), and argued for a return to free trade from the trade war triggered by the Smoot-Hawley tariff. Not a word about central planning, even as a distant possible threat.

Bottom line here appears to have two points. One is that Papola and Roberts must be let off the hook on having put this claim by Hayek that Keynes supported a "central plan" into their video (and I apologize to them for blaming them). Of course, they did it, but it is also clear that Robert Skidelsky made such claims to them that supported what they did. What then is the final point of contention is when and where did Skidelsky come up with this view of what really bothered Hayek, given that he never said (or wrote) any such thing before, indeed appeared to specifically deny that Hayek made such an argument, and there remains no published evidence of Hayek ever making such a claim or argument about Keynes. So, let us blame Skidelsky for this fiasco of a misrepresentation of what Hayek thought about Keynes.