Friedrich August von Hayek: “Keynesian Kaleidics”

Hayek’s published letter to the editor, originally appearing in the Times Literary Supplement on October 4, 1974, and republished in the supplied 2022 version, corrects a reviewer’s characterization of Austrian economics. Its subject is the review of G. L. S. Shackle’s Keynesian Kaleidics, rather than an assessment of Shackle’s book itself. Hayek opens with a sharply worded objection:

Sir,—One can hardly be more ignorant of the Austrian economists than must be your reviewer of G. L. S. Shackle’s Keynesian Kaleidics (September 20) when he represents them as thinking in terms of a timeless general equilibrium definable in mathematical concepts.

The dispute concerns both intellectual genealogy and method. According to Hayek, the reviewer attributes to the Austrian tradition a static, mathematically expressible conception of equilibrium that misidentifies its distinctive approach. Hayek counters with a categorical historical claim:

Of the post-classical schools of economic theory they were the only ones who eschewed such techniques and argued in terms of a process analysis.

“Process analysis” supplies the letter’s conceptual pivot: Austrian reasoning is distinguished from the timeless equilibrium framework attributed to it. Hayek then qualifies his defense by acknowledging that younger adherents, himself included, sometimes used the equilibrium concept. He attributes that usage to learning from Walras and Marshall, not from their Austrian teachers. The letter thus separates a tradition’s methodological inheritance from its later adherents’ borrowed tools. Its relevance lies in this precise correction; it asserts the distinction without developing a broader account of economic processes.