Friedrich Hayek

"If any twentieth-century economist was a Renaissance man, it was Friedrich Hayek. He made fundamental contributions in political theory, psychology, and economics. In a field in which the relevance of ideas often is eclipsed by expansions on an initial theory, many of his contributions are so remarkable that people still read them more than fifty years after they were written. ... Hayek was the best-known advocate of what is now called Austrian economics."

"Hayek's life spanned the twentieth century, and he made his home in some of the great intellectual communities of the period. Born Friedrich August von Hayek in 1899 to a distinguished family of Viennese intellectuals, Hayek attended the University of Vienna, earning doctorates in 1921 and 1923. Hayek came to the University at age 19 just after World War I, when it was one of the three best places in the world to study economics (the others being Stockholm and Cambridge, England)."

"Hayek developed fundamental insights about what's needed for liberty to flourish. He showed that essentials of a free society, like language, markets and legal customs, arise spontaneously and aren't created by government. He identified fatal flaws of government-run economies. ... Born in Vienna, Hayek read Ludwig von Mises' book Socialism (1922) and became convinced that socialism could never fulfill its promises."

"F. A. Hayek, the 1974 Nobel Memorial Prize winner in Economic Sciences, was an economist and philosopher best known for his defense of classical liberalism and free-market capitalism against socialist and collectivist thought."

"Hayek was one of the most important free market economists of the 20th century. He was a member of the 'Austrian school of economics', taught at the London School of Economics, wrote extensively on banking and monetary theory, the socialist calculation debate, and the theory of spontaneous orders."

"The ideas of Austrian economist F.A. Hayek (1899-1992) had an enormous impact during the late 20th century. Among those who acknowledged his influence have been Nathaniel Branden, Winston Churchill, Ed Crane, Richard Epstein, Antony Fisher, Milton Friedman, F.A. Harper, Vaclav Havel, Henry Hazlitt, Israel Kirzner, Mario Vargas Llosa, Robert Nozick, P.J.O'Rourke, George Orwell, Karl Popper, Virginia Postrel, Leonard Read, Ronald Reagan, Julian Simon, Hernando de Soto, Thomas Sowell and Margaret Thatcher. The Adam Smith Institute named Hayek 'Man of the Century.' The Wall Street Journal included Hayek among the most influential economists of the millennium."

"Nobel laureates Hayek and Buchanan engage in a spirited discussion of von Hayek's controversial work, 'Constitution of Liberty.'"

"Nobel laureates Hayek and Buchanan continue their discussion of von Hayek's controversial work, 'Constitution of Liberty.'"

"Building on the work of that other great Austrian economist, Ludwig von Mises, and combining a respect for inherited wisdom with an understanding that freedom is fundamentally disruptive, Hayek showed that the uncoordinated actions of individuals generate wonders -- market prices, language, scientific progress -- that the deliberate designs of central planners never could."

"Another thing that helped form my policy orientation was when Hayek came to Chicago in 1950. He attracted quite a number of very able students, Sam Peltzman, Ron Hamowy, Ralph Raico, Shirley Letwin. There were quite a group of them. Hayek drew very high quality people. ... These were libertarians, all of them, though Hayek would not have labeled himself a libertarian. As you know, he always avoided the term conservative, too. He would call himself an Old Whig."

"He soon became embroiled in a heated debate with Keynes, in which Keynes argued for monetary and fiscal 'stimulus' to end the depression, instead of Hayek's free-market solution. ... At the same time, Hayek began amplifying Mises's criticisms of socialism, explaining that a developed system of division of labor is just too complex to be controlled and directed through any form of central planning. ... This argument culminated in Hayek's most influential book, The Road to Serfdom, published in 1944 ..."

"One of Hayek's most important and lasting contributions to human understanding has been his development of a theory of spontaneous order. Hayek argued (echoing the 18th-century Scottish moral philosopher Adam Ferguson) that much, if not most, of the social order is 'the result of human action, but not of human design.' ... Hayek also emphasized that a system of division of labor brings with it a division of knowledge."

"For example, Hayek, who absorbs from Menger an Austrian emphasis on process and spontaneous order, enunciated a profoundly dialectical critique of utopianism. ... Hayek railed against both collectivist and atomist viewpoints. For Hayek, since no human being can know everything there is to know about society, people cannot simply redesign it anew. Human beings are as much the creatures of their context as they are its creators. Hayek's rejection of utopianism is a repudiation of what he calls 'constructivist' rationalism. "

"Hayek was the 20th century's most prominent developer of the Austrian business cycle theory. ... As a student, he developed the basis of a cognitive theory, which he revised and published in 1952 in The Sensory Order. He wrote extensively on the method of the social sciences in The Counter-Revolution of Science, also published in 1952 and one of his most important statements on the subject. Throughout the 1950s and 1960s, he developed a body of social theory about knowledge and competition."

"The award to him of the Nobel Prize in Economic Science, in 1974, was thus a fitting tribute to Hayek's accomplishments and a welcome sign of the esteem in which he came to be held by knowledgeable people throughout the scholarly world. But to an unusual degree for a thinker of such eminence, Hayek exerted a direct influence on the larger educated public as well."

"In 1944 he dedicated The Road to Serfdom to 'The Socialists of All Parties,' generously presuming that 'they would recoil if they became convinced that the realization of their program would mean the destruction of freedom.' Their schemes, he argued in this sober warning, had already led to tyranny in Germany and Russia, and good intentions would not save them."

"Though his 1974 Nobel Prize was in Economic Science, his scholarly endeavors extended well beyond economics. He published 130 articles and 25 books on topics ranging from technical economics to theoretical psychology, from political philosophy to legal anthropology, and from the philosophy of science to the history of ideas. Hayek was no mere dabbler; he was an accomplished scholar in each of these fields of inquiry."

"His 1944 bestseller The Road to Serfdom helped catalyze the free-market political movement in the United States and continues to sell thousands of copies a year. ... Citing the 'proof of time,' Encyclopedia Britannica recently commissioned Caldwell to replace its formulaic 250-word Hayek profile with a nuanced discussion more than 10 times as long. Harvard has added him to the syllabus of Social Studies 10, its rigorous introductory social theory course."

"Again and again, Spencer emphasized how extraordinary human progress develops naturally when people are free. Consider this passage from Principles of Sociology:

... Knowledge developing into science ... now guides productive activities at large, has resulted from the workings of individuals prompted not by the ruling agency but by their own inclinations. ...

Spencer anticipated the work of Nobel Laureate F.A. Hayek who reminded the world why spontaneous market action, not central planning, is responsible for humanity's most stunning achievements."

"When Hayek won the Nobel Prize in 1974, my professors were flabbergasted, and bewildered by my very public excitement. Some had never heard of him; others only knew him as the author of The Road to Serfdom and they asked what that had to do with 'real economics'? ... the especial highlight of these two summers was that for both of them Friedrich A. Hayek ... was present as a senior research fellow. ... Hayek was the epitome of the old world Viennese gentleman, generous with his time, patient with questions many of which he must have heard a hundred times over his long career, and often amusingly self-deprecating ..."

"As F.A. Hayek explained in The Road to Serfdom, such an impulse toward dictatorship among those 'impatient with the impotence of democracy,' as he put it, occurs frequently. He argued that it is a function of citizens giving their republics too expansive a mandate for addressing the ills of society through central planning. ... For example, Hayek argued that Weimar Germany’s embrace of planning paved the way for the rise of Adolph Hitler ..."

"Hayek was an economist by training who wrote against the backdrop of the failed experiment of European socialism. He championed the decentralized systems of decision-making and rebelled against the planned economy that rested on dubious social calculations. ... He believed that markets worked well because prices allowed people to signal to each other as to the value they attached to certain resources, without having to give lengthy explanations as to the uses to which those resources were put."

"... Friedrich Hayek launched the first major challenge to the prevailing thinking behind the welfare state and socialism with his 1944 book "The Road to Serfdom" ..."

"As F. A. Hayek later noted, 'When Socialism first appeared in 1922, its impact was profound. It gradually but fundamentally altered the outlook of many of the young idealists returning to their university studies after World War I. I know, for I was one of them. ...' ... Hayek devoted great attention to understanding the proper role of law in guaranteeing rights and became convinced that law itself was a discovery process, analogous to the market process. Just as market institutions evolve, so the legal order is the result of an evolutionary process. The market is a spontaneous order that cannot be planned in advance. "

"Another 15 years later, however, Hayek's views on money and monetary policy radically changed. About a year after being awarded the Nobel Prize in economics in 1974, he delivered a lecture on 'International Money' in September 1975 at a conference in Switzerland. In early 1976, it was published in London as a monograph under the title Choice in Currency: A Way to Stop Inflation."

"In the 20th century, F. A. Hayek reintroduced the idea of the 'denationalization of money' in the context of fiat (unbacked) monetary standards. Hayek argued that competition among private producers of fiat money would keep its purchasing power more stable. Other libertarian monetary economists endorse Hayek's call for an end to legal restrictions against private money, but they question his predictions that dozens of distinct monetary units would circulate in parallel in the same economy or that the public would prefer unbacked private money to the more traditional sort of commodity-backed private money."

"In addition to presenting material to appear in the third volume of Law, Legislation and Liberty, F.A. Hayek presented a postscript on 'The Three Sources of Human Values.' He examined the errors of sociobiology, the evolution of self-maintaining complex structures, rules of conduct, the discipline of freedom, and the reemergence of suppressed primordial instincts; and criticized both Marx and Freud. ... Hayek set the atmosphere for the rest of the meeting by his optimistic attitude toward the change in the intellectual climate. The intellectual world, he said, is witnessing a reversal of the dominance of collectivist ideas."

"No event precisely marks the rebirth of modern libertarianism—remnants of the classical view endured, to be sure ... But a useful marker is of course the 1944 publication of F.A. Hayek's The Road to Serfdom, a withering critique of central planning. An Austrian economist but in truth a polymath, Hayek would go on to publish broadly philosophical works — The Constitution of Liberty in 1960 and the three-volume Law, Legislation, and Liberty in the 1970s, among much else ..."

"Another Nobel Laureate, Friedrich Hayek (who was born two years after Frank Engle), now seems ahead of his time for his prescient recognition of the dangers of encroaching government regulation and control. He advocated a climate of freedom for the cultivation of human dignity, prosperity, and economic security. ... Hayek was a leader of the Austrian school of economics, which affirmed the philosophical and qualitative nature of economic thought, not just mathematical modeling and statistical analysis."

"In like fashion, Hayek's insistence on the rule of law has implications that Szasz finds congenial. The rule of law, as Hayek conceives it, requires that legislation group people in objective categories. Absent this, they stand vulnerable to the arbitrary acts of government agents. If one accepts Szasz's view that there are no objective criteria of mental illness, it at once follows that the law can take no account of it. Hayek declined to draw this conclusion, and Szasz has no patience with his acceptance of the 'doctrinal claim' that those diagnosed as mentally ill bear no responsibility for their actions ..."

"It is astonishing how soon Leonard's action began to produce important results. Friedrich Hayek, in London, impressed by Read's initiative, raised the money the next year, 1947, to call a conference at Vevey, Switzerland, of 43 libertarian writers, mainly economists, from half a dozen nations."

"Hayek was an extraordinarily learned man. His knowledge and insights spanned not only economics, for which he was awarded the Nobel Prize in 1974, but also philosophy, history and even psychology. ... Hayek transcended nationality like few others in the 20th century. Stephen Kresge, Editor of The Collected Works of F.A. Hayek, which the University of Chicago Press is publishing in 22 volumes, likens Hayek's global reputation to that of the physicists Niels Bohr and Albert Einstein."

"In 1944, Hayek wrote a seminal book, The Road to Serfdom, which argued that government central planning inevitably led to the rise of the totalitarian socialist state. Marxists maintained that fascism was a form of decaying capitalism, but Hayek’s book also included a trenchant critique of Nazism as a form of socialism. After writing The Road to Serfdom, Hayek toured the United States. The trip contributed to his decision to issue a call to free-market advocates to meet at Mont Pelerin."

"Hayek's particular and profound contribution to the debate over the feasibility of socialism was the following argument: that the more complex a society, the more difficult it becomes for a central planner to possess the required knowledge to co-ordinate all the economic activity of that society. In a system of division of labour, human knowledge is also divided. Each member of society possesses a small fraction of all the world's knowledge."

"Last week's episode is only the latest reminder of the tendency of socialism to lead to dictatorship, as identified by the Nobel Prize-winning economist Friedrich Hayek in The Road to Serfdom. In 1944, when he wrote his book, Hayek noted that the crimes of the German National Socialists and Soviet Communists were, in great part, the result of growing state control over the economy. ... Hayek was fortunate enough to live to see the defeat of both the Nazi and Soviet totalitarian regimes. Unfortunately, there are still places where Hayek's most dire warnings remain relevant. Nicolas Maduro's Venezuela is one such place."

"The term is now used with a variety of meanings which have little in common beyond describing an openness to new ideas, including some which are directly opposed to those which are originally designated by it ... This movement derives, however, from two distinct sources, and the two traditions to which they gave rise, though generally mixed to various degrees, coexisted only in an uneasy partnership and must be clearly distinguished if the development of the liberal movement is to be understood."

"Fundamentally, in a system in which the knowledge of the relevant facts is dispersed among many people, prices can act to coördinate the separate actions of different people in the same way as subjective values help the individual to coördinate the parts of his plan. ... The mere fact that there is one price for any commodity ... brings about the solution which (it is just conceptually possible) might have been arrived at by one single mind possessing all the information which is in fact dispersed among all the people involved in the process."