They are getting together again. This weekend in Toronto, Canada, President Obama and German Chancellor Merkel reconvene at the G-20 Summit to figure out how to move the global economy forward. The two leaders are indeed extraordinary and remarkable in many ways. President Obama is the first African American President while Chancellor Merkel is the first female Chancellor of Germany. Oh, by the way, they are both for “change,” too.
What appears even more extraordinary are their strikingly different choices of economics playbook for “change.” President Obama has chosen the book of English-speaking John Maynard Keynes and stuck to it. In fact, President Obama once noted in a quite assertive tone, “only government can provide the short-term boost necessary to lift us from a recession this deep and severe.” By contrast, Chancellor Merkel seems to have adopted the book of German-speaking Friedrich von Hayek. Chancellor Merkel, who has fended off calls from the Obama Administration to spend more money to deal with the current crisis, defended her austerity plan by saying, “We, the Europeans and the Germans in particular, think that reducing the deficits is indispensable for achieving sustainable growth.” She also noted that there are differences “about the philosophy, the approach of how to overcome the financial crisis.”
Friedrich Hayek once observed, “To be controlled in our economic pursuits means to be controlled in everything.” The American public does increasingly understand the importance of economic freedom. It is quite encouraging that Hayek’s classic The Road to Serfdom has been in the top 100 on Amazon’s bestseller list this month, even hitting the top spot and generating a mini “Hayek boom.” It is time to send some copies to 1600 Pennsylvania Ave.