The Austrians III: Two Routes to Serfdom

We have so far dealt with the Austrian challenge to Keynes in terms of economic theory as represented in the Hayekian theory of the trade cycle. We have concluded that this challenge cannot be shown to have succeeded. But, as noted earlier, the peculiar strength of Austrian economics, which exempts it from the tensions inherent in monetarism, lies in its successful integration of technical monetary theory into a general philosophy of society in which money is regarded as a social institution. There is, accordingly, a further challenge to Keynes based upon the broader social and political consequences of the Keynesian Revolution. It is to a consideration of these consequences that we now turn.