Keynes vs. Hayek: You ever heard of these people?

Their theories about economics, based on the experiences of the 1920s and the 1930s dominate most of today's mainstream ideas about how to deal with our current economic mess. If you get the chance look at the UTube Rap
"Fear the Boom and Bust": A Hayek vs. Keynes Rap Anthem (www.youtube.com).
It says it all - and it's funny.

My problem is with left approaches to this argument.

Hayek says interfering with the market is a mistake - and when governments spend money to get out of slumps rather than letting some of big capital crash, it will lead to longer term grief than would otherwise occur. Later, he said governments might/should/could intervene to curtail booms (which inevitably lead to slumps.)

Keynes says when private money dries up then governments should spend - and thereby get the people to spend - which will re-start growth.

Hayek supporters say - look at Japan and now the West. Government spending sprees have just made things worse. Now they even threaten government's credibility. The collapse should have been allowed and would have otherwise been short, sharp and cured the system.

Keynes's supporters say - if the banks had been allowed to fail then the resulting depression would have been very deep creating huge scale human misery and prolonging the agony.

Many in the trade unions in Britain, backed by major international economic thinkers, fly the Keynsian flag. Leading Labour politicians support cuts - just not the nasty ones or silly ones of the sort that the Coalition has picked! No wonder they come across as not knowing where they stand in any fundamental sense.

But people are not stupid. They may never have heard of Keynes or Hayek. But they know that something is wrong with both approaches. So in polls people say that they do not like what the Coalition are doing AND that they have little time for Labour's policy. When the full blown Keynesian message does get heard, it does not sound right either.

Why this hesitation? My guess as to why both policies, of cuts, or of spend, sound wrong is that millions of people do not think that the problem we face is solely one of economics. When you live a life in our society, it is lived through experience and experience is telling millions, even here in the West, that there is something wrong with our economics - for sure - but that problem is ineluctably linked to the view that there is also something wrong with our politics; with our society; with our way of doing things.

Who is right?

It is at least tempting to say that the time for Messrs Keynes and Hayek's argument maybe over. Maybe we need a new argument about the sort of society we want, about how economics - and politics - can best serve the people.