Full bibliography

This contribution aims at exploring what is today the new "normal" in economic policy, namely, austerity. It must be read as a homage to Karl Polanyi, the first who understood the tragedy, and to Kari Polanyi-Levitt, who expanded on her father's thought. Austerity has nothing to do with old anticyclical or stabilizing policies. It is a permanent regime devoid of any sound foundations. It is a pure quasi-religious policy that is self-reinforcing. The author emphasizes the fundamental conflict between its promoter, Friedrich Hayek, and its adversary, John Maynard Keynes, and points to the sole towering intellectual, Karl Polanyi, who understood that their conflict embodied two radically different visions of the world. Polanyi discovered that the core of the conflict was the merciless fight between the supreme rule of God-given market laws, the Hayekian order, and democracy enshrined in a peaceful society that is oriented toward the future. The Hayekian order abolishes the modern democratic state, sacrifices the future, and extols poverty for the sake of order. Polanyi was the first to have discovered the true message of Keynes, who had destroyed the logical foundations of Hayek's philosophy and economics. In conclusion, the author strives to explain why, early in the twenty-first century, the Hayekian legacy is the true road to serfdom because it ignores Polanyi and encourages belief in market laws. Early American "Keynesians," who knew nothing about Hayek, transformed Keynes into a new Léon Walras. These early Keynesians were doomed from the start and vanished when they endorsed the Philips curve as expressing the absolute truth.