1 October 2012 Last updated at 01:35 ET

Article written by Stephanie Flanders Economics editor

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Mervyn King's economic inspirations

 

Mervyn King speaks to the BBC's economics editor Stephanie Flanders about the great thinkers of economics

Sir Mervyn King was an economics professor at the London School of Economics before joining the Bank of England in 1991, and becoming its governor in 2003.

He studied at John Maynard Keynes' old college in Cambridge in the 1960s at a time when Keynesian economics was in the ascendant, but about to come under attack from monetarist economists such as Milton Friedman.

To my knowledge, Sir Mervyn has given just three extended television interviews since becoming governor. Only one of these - last month, for Channel 4 - was broadcast live.

I sat down with him for this interview in late February 2012 for the BBC 2 series, Masters of Money - a documentary series about the lives and economic thinking of Keynes, Friedrich Hayek and Karl Marx which I have written about before. The last episode, on Marx, is broadcast on 1 October.

In this interview the governor of the Bank of England comments on each man's contribution to economic history, and the relevance of their ideas to recent events.

Sir Mervyn says that the last few years have given him a deeper understanding of some of Keynes' writing about the 1930s.

Before the financial crisis of 2008, Sir Mervyn says, he had struggled to comprehend how policymakers had allowed the economic disasters of the interwar years to take place. Now he understands all too well.

He credits Hayek with having given economists a valuable warning against hubris. We can't predict the future, he says. And we probably can't prevent more crises from happening. But we can try to make the system better at coping with them.