Forget Keynes vs efficient market hypothesis- Remember F A Hayek

Writes economist Meghnad Desai the article is thundering like a true liberal, wait, this gun shoot is too on T. C. A who has written a few pieces in the Business Line on economics subjects saying in the last 25-30 years nothing has advanced in the subject of economics. But Mr Desai argues “Markets in this way of thinking are not allocation systems, but signalling mechanisms where profit opportunities are and where accumulation would be fruitful. Marx, Wicksell, Schumpeter and Hayek all theorised capitalism as a system in which cycles are endemic . For Marx a crisis is not a disease, but the way capitalism cures its own problems. Wicksell also theorised about cumulative dynamics of booms and slumps. Schumpeter is of course famous for his idea of creative destruction and Hayek was at the forefront of analysis of capitalism in the years before Keynes wrote his General Theory.”

And more convincingly, perhaps in my view he says that “Capitalism mind you, not some bloodless notion of markets. It is the dynamics of profit-seeking innovators and entrepreneurs who scour the world for new niches and gaps in the demand structure and supply opportunities. This is how globalisation has transformed the world in the last 25 years. ”