Lead: John Maynard Keynes and Friedrich August Hayek are often arrayed at either end of a vast intellectual divide, but in reality they had virtual agreement on a remarkable range of economic theories.

Intro.: A Moment in Time with Dan Roberts.

Content: Despite the near adoration with which Hayek is held in conservative and libertarian circles, he was no lover of laissez-faire economics or advocate of an indolent or passive state, an idea much associated with 19th century classical liberalism. Recognizing that modern economies and societies had irrevocably reached a mixed solution to the marketplace that required state participation and state/private collaboration, he once argued against the idea that the state should be inert. He said, “In no system that could be rationally defended would the state just do nothing.” In fact, he understood that the government would play a role in the economy by providing those services that the free market could not create by itself. Hayek allowed the government to regulate safe working conditions, prevent pollution and fraud, and create a safety net in which citizens receive minimal food, shelter, and clothing.


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