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Friedrich A. von Hayek

The Austrian-born British free market economist and social philosopher, Nobel Laureate Friedrich Auguste von Hayek (1899-1992) was one of the most distinguished social thinkers of the 20th century.

Friedrich A. von Hayek was born on May 8, 1899, in Vienna into a modest family that could lay claim to a great academic tradition. He left school to enlist in World War I in March 1917. Shortly after returning from the Italian front in November 1918 he began to study law at the University of Vienna. Hayek obtained his Juris Doctor degree only three years later, but continued to study political science, receiving his second doctorate from the same university in 1923.

Hayek in 1921 helped found the "Geistkreis, " a small circle of young social scientists in Vienna. More than half of its participants later became world-famous. In 1923 Hayek visited New York and worked part-time as a research assistant at New York University. Greatly stimulated by the newly developed advanced techniques for analyzing time series and forecasting industrial fluctuations, he returned to Vienna in 1924 and published several articles in this field and in monetary theory that paved the way for his later work. Together with his teacher Ludwig von Mises (1881-1973), the eminent scholar of Liberalism, he founded the Austrian Institute for Business Cycle Research in 1927 and directed it until 1931. In 1929 he became a lecturer at Vienna University. That same year his first book on Geldtheorie und Konjunkturtheorie (1929) appeared and set a standard in modern business cycle theory.

Becoming an International Scholar

Hayek's series of guest lectures at the London School of Economics in 1931, published as his important Prices and Production (1931), led to his appointment as Tooke Professor of Economic Science that same year. There, Hayek immediately became the only intellectual opponent of the new theories of under-consumption and under-investment of Lord John Maynard Keynes. All eminent economists of the time were involved in this major intellectual controversy.

To the big debate (which continues to this day) over the impossibility of socialist calculation and 'market socialism' in the 1930s, with Mises and Hayek on one side and Lange and H. D. Dickinson on the other, Hayek contributed a number of essays which refuted the socialist approach to economic planning. They are collected in his Individualism and Economic Order (1948). His seminal essay on "Economics and Knowledge" (1937), in which he first formulated the 'division of knowledge' in society, led him increasingly to socio-philosophical problems, although his interest in technical economics culminated in his The Pure Theory of Capital (1942). He was elected Fellow of the British Academy in 1944.

Hayek's The Road to Serfdom (1944) made him world-famous overnight and aroused heated discussions. In this best-seller of the immediate post-war years, since translated into sixteen languages, he showed that socialism carries with it no adequate provision for the preservation of freedom and that the convergence of economic systems is rooted in an economic error.

Hayek's important contributions to the methodological problems of the social sciences and scientism were later collected in his The Counter-Revolution of Science (1952). In his crucial essay on "The Use of Knowledge in Society" (1945), Hayek refined his idea of the price system as a mechanism for communicating information.

In 1947 Hayek founded the exclusive Mont Pelerin Society, an international association of like-minded scholars. By the end of 1949 he left London and accepted a professorship at the University of Chicago. The Sensory Order (1952), a discourse in pure psychology containing some of his most original and important ideas, was published in 1952, though the preliminary thoughts dated back to the early 1920s when he had been uncertain whether to become a psychologist or an economist. Hayek's socio-philosophic approach, however, led to his The Constitution of Liberty (1960), regarded as one of the great books of the mid-20th century. Here he further developed his idea of spontaneous order and laid down the ethical, legal, and economic principles of freedom.

Hayek's next move, in 1962, was to the University of Freiburg (Germany). Among many pathbreaking works, he published there his famous Studies in Philosophy, Politics, and Economics (1967). After becoming professor emeritus at Freiburg in 1968, he returned to his native Austria and joined the University of Salzburg. In this period, besides some important essays, the first and second volumes of his fundamental trilogy Law, Legislation, and Liberty (1973-1976) were published.

In 1974 he was awarded the Nobel Prize in Economics. Hayek's courageous Nobel Prize lecture on "The Pretence of Knowledge" (1974) to some extent again initiated the intellectual revival of liberalism. After Hayek's return to Freiburg in 1977 he published his widely discussed Denationalization of Money (1978), his New Studies in Philosophy, Politics, Economics and the History of Ideas (1978), and the third volume of his trilogy.

When not lecturing throughout the world, Hayek devoted himself entirely to the completion of his next work, significantly entitled The Fatal Conceit. This book presents a most important fundamental critique of rationalism, socialism, and constructivism. Hayek's career as scholar and teacher was international, and he held honorary degrees from universities all over the world. Among his honors, awards, and orders, he received the Order Pour le Merite from Germany and in 1984 the Companion of Honour from Britain.

Hayek's Leading Ideas

Hayek represented the subjective approach of the free-market oriented Austrian School of Economics, distinguished by its methodological individualism. His economic analysis, therefore, rested upon the insight that every individual chooses and acts in pursuit of his purposes and in accordance with his perception of his options for achieving them. His early writings, as shown above, were in pure economic theory.

Hayek's trade cycle theory explained that overinvestment leads to scarcity of capital compelling a cutback in investment and even the abandonment of a part of the real capital produced because of the excessive investment rate.

His most important discovery was the "division of knowledge" and the spontaneous order. The spontaneous interaction of millions of individuals, each possessing unique information of which beneficial use might be made, created circumstances that cannot be conveyed to any central authority. A system of signals - the price system - was therefore the only mechanism that communicates information and enables people to adapt to circumstances of which they know nothing. The whole modern order and well-being rested on the possibility of adapting to processes that were unknown. It was not scientific knowledge which matters, but the unorganized particular knowledge of time and place.

While for most social philosophers the chief aim of politics consisted in setting up an ideal social order through utopian reforms, Hayek's main task was the finding of rules that enable men with different values and convictions to live together. These rules were established so as to permit each individual to fulfill his aims and to limit government action.

In his "Denationalization of Money" (1976) he convincingly argued that inflation could be avoided only if the monopolistic power of issuing money was taken away from government and state authorities and the task given to private industry to promote competition in currencies.

According to Hayek, cultural evolution was not a result of human reason consciously building institutions, but a process in which culture and reason developed concurrently. The spontaneous social order generated by individuals interacting according to these general rules was distinguished from the constructivist approach exemplified by socialist ideas, which interpreted all order as the product of conscious design.

Hayek's seminal work arose and developed from a comprehensive approach to various intellectual disciplines that condition and influence one another. Although there were only a few direct disciples in academia, Hayek's influence on pure economics, public policy, and social, political, and legal philosophy were tremendous.

Classical Liberalism

During the 1980s, Hayek's interdisciplinary theories gained wider dissemination, especially his opposition to the concept that publc institutions could be designed to meet human requirements and intentions. He preferred an almost laissez-faire approach in which public order evolved from specific ideas and actions. Thus, he was opposed to the highly-centralized economics of the various forms of socialism, which denied the economics of the marketplace.

British Prime Minister Margaret Thatcher, was greatly influenced by Hayek's ideas of personal liberty and market economics and based many of her government's conservative policies upon her interpretation of his concepts.

In 1991, Hayek published his final volume, Economic Freedom, in which he argued that political/economic coercion is the greatest threat to individual freedom and best achieved through the natural evolution of market forces.

Since Hayek's death in March 1992, there has been continuing debate concerning his interdisciplinary system. It was thought that he diminished the role of reason, and failed to reconcile the value of such liberal institutions as have evolved with their role as preservers and nurturers of reason and freedom.

Further Reading

Probably the best collection of Hayek's most important and influential essays and chapters available is Kurt R. Leube and Chiaki Nishiyama, The Essence of Hayek (1984), which includes a biography and an introduction. A good popular presentation of Hayek's ideas can be found in Eamonn Butler, Hayek: His Contribution to the Political and Economic Thought of Our Time (1983). His political philosophy is penetratingly treated in John N. Gray, Hayek on Liberty (1984), which includes a comprehensive bibliography compiled by John Cody. Two Festschrifts are dedicated to Hayek: Erich Streissler et al. (editors), Roads to Freedom: Essays in Honour of Friedrich A. von Hayek (1969), and Kurt R. Leube and Albert H. Zlabinger (editors), The Political Economy of Freedom: Essays in Honor of F. A. Hayek (1985). Hayek's publication list covered 19 books and some 240 essays and articles.

There were several in-depth studies of Hayek's interdisciplinary theories which seek to make his concepts accessible to the uninformed but interested reader. Margaret Thatcher's The Path to Power (1995) acknowledged her debt to Hayek's The Road to Serfdom for his insights into the economic and social slavery of the authoritarian forms of socialism which were coming into vogue in the late thirties and early forties. Keith Graham in The London Times obituary of Hayek (March, 1992) presented a concise but lucid analysis of his major concepts, and contained an extensive bibliography of Hayek's main publications and secondary reading.

 
 
Political Dictionary: F. A. von Hayek

(1899-1992) Austrian political economist who spent much of his life in Britain. In The Road to Serfdom (1944) he portrayed state intervention and collectivism, even in their moderate forms, as inevitably leading to an erosion of liberty. In both Britain and the United States, the book became a text for supporters of laissez-faire and opponents of Keynesian economics and the welfare state for more than three decades in which their views were largely unrepresented in government. Hayek was far from a simplistic supporter of laissez-faire and in The Constitution of Liberty (1961) he was concerned to explore the necessary framework of government and the rule of law in which freedom and commerce could prosper.

— Lincoln Allison

 
Britannica Concise Encyclopedia: Friedrich August von Hayek

(born May 8, 1899, Vienna, Austria — died March 23, 1992, Freiburg, Ger.) Austrian-born British economist. He moved to London in 1931 and held positions at the University of London and the London School of Economics, becoming a British citizen in 1938. Later posts included a professorship at the University of Chicago (1950 – 62). Throughout his life Hayek criticized socialism, often contrasting it with a system of free markets. In his works he opposed the theories of John Maynard Keynes and argued that government intervention in the free market is destructive of individual values and could not prevent such economic ailments as inflation, unemployment, and recession. His books include The Road to Serfdom (1944), The Constitution of Liberty (1960), and The Political Order of a Free People (1979). His views have been highly influential among conservatives, including Margaret Thatcher. In 1974 he shared the Nobel Prize with Gunnar Myrdal.

For more information on Friedrich August von Hayek, visit Britannica.com.

 
Philosophy Dictionary: Friedrich Hayek

Hayek, Friedrich (1899-1992) Austrian economist and philosopher. Born and educated in Vienna, Hayek taught at London and Chicago before returning to his native country in 1962. In a succession of economic analyses, and in more popular works (such as The Road to Serfdom, 1944), he propounded an extreme laissez-faire economic individualism, allied with the political belief that anything in the nature of state action or collective action (such as that of trade unions) undermines liberty and paves the way to totalitarianism. Similar analyses were applied to the history of positivism since Comte, in The Counter-Revolution of Science: Studies in the Abuse of Reason (1952). He was a notable influence on the economic and political right wing in Britain and the USA, especially after his views were revivified by the award of the Nobel prize in 1974.

 

(1899 - 1992), leading proponent of markets as an evolutionary solution to complex social coordination problems.

One of the leaders of the Austrian school of economics in the twentieth century, Friedrich Hayek received the Nobel Memorial Prize in Economic Science in 1974. Born to a distinguished family of Viennese intellectuals, he attended the University of Vienna, earning doctorates in law and economics in 1921 and 1923. He became a participant in Ludwig von Mises's private economics seminar and was greatly influenced by von Mises's treatise on socialism and his argument about the impossibility of economic rationality under socialism due to the absence of private property and markets in the means of production. Hayek developed a theory of credit-driven business cycles, discussed in his books Prices and Production (1931) and Monetary Theory and the Trade Cycle (1933). As a result he was offered a lectureship, and then the Tooke Chair in Economics and Statistics at the London School of Economics and Politics (LSE) in 1931. There he worked on developing an alternative analysis to the nascent Keynesian economic system, which he published in The Pure Theory of Capital in 1941, by which point the Keynesian macro model had already become the accepted and dominant paradigm of economic analysis.

In the 1930s and 1940s, Hayek made his major contribution to the analysis of economic systems, pointing out the role of markets and the price system in distilling, aggregating, and disseminating usable specific knowledge among participants in the economy. The role of markets as an efficient discovery procedure, generating a spontaneous order in the flux of changing and unknowable specific circumstances and preferences, was emphasized in his "Economics and Knowledge" (1937), "The Use of Knowledge in Society" (1945), and Individualism and Economic Order (1948). These arguments provided a fundamental critique of the possibility of efficient economic planning and an efficient socialist system, refining and redirecting the earlier Austrian critique of von Mises. They have also provided the basis for a substantial theoretical literature on the role of prices as a conveyor of information, and for the revival of non-socialist economic thought in the final days of the Soviet Union.

Hayek worked at LSE until 1950 when he moved to Chicago, joining the Committee of Social Thought at the University of Chicago. There Hayek moved beyond economic to largely social and philosophic-historical analysis. His major works in these areas include his most famous defense of private property and decentralized markets, The Road to Serfdom (1944), New Studies in Philosophy, Politics and Economics (1978), and the compilation The Fatal Conceit: The Errors of Socialism (1988). These works, more than his economic studies, provided much of the intellectual inspiration and substance behind the anti-Communist and economic liberal movements in eastern Europe and the Soviet Union in the 1980s and 1990s. In 1962 Hayek left Chicago for the University of Freiburg in Germany, and subsequently for Salzburg, where he spent the rest of his life. The Nobel Prize in 1974 significantly raised interest in his work and in Austrian economics.

Bibliography

Bergson, Abram. (1948). "Socialist Economics." In A Survey of Contemporary Economics, ed. H. S. Ellis. Home-wood, IL: Irwin.

Blaug, Mark. (1993). "Hayek Revisited." Critical Review 7(1):51 - 60.

Caldwell, Bruce. (1997). "Hayek and Socialism." Journal of Economic Literature, 35(4):1856 - 1890.

Foss, Nicolai J. (1994). The Austrian School and Modern Economics: A Reassessment. Copenhagen, Denmark: Handelshojskolens Forlag.

Lavoie, Don. (1985). Rivalry and Central Planning: The Socialist Calculation Debate Reconsidered. Cambridge, UK: Cambridge University Press.

Machlup, Fritz. (1976). "Hayek's Contributions to Economics." In Buckley, William F., et al., Essays on Hayek, ed. Fritz Machlup. Hillsdale, MI: Hillsdale College Press.

O'Driscoll, Gerald P. (1977). Economics as a Coordination Problem: The Contribution of Friedrich A. Hayek. Kansas City: Sheed, Andrews and McMeel.

—RICHARD E. ERICSON

 
Columbia Encyclopedia: Hayek, Friedrich August von
(frē'drĭkh ougʊst' fôn hī'ək) , 1899–1992, British economist, b. Vienna. He was raised and educated in Austria and taught at the London School of Economics in the 1930s, where he gained attention for his criticism of Keynes. He expressed his commitment to free markets and his aversion to government intervention in The Road to Serfdom (1944). The economic policies of former British Prime Minister Margaret Thatcher were significantly influenced by his ideas. Hayek branched out into the fields of philosophy, psychology, and epistemology. He was awarded the Nobel Memorial Prize in Economic Sciences in 1974.
 
Quotes By: Friedrich August Von Hayek

Quotes:

"There are no better terms available to describe [The] difference between the approach of the natural and the social sciences than to call the former objective and the latter subjective. ... While for the natural scientist the contrast between objective facts and subjective opinions is a simple one, the distinction cannot as readily be applied to the object of the social sciences. The reason for this is that the object, the facts of the social sciences are also opinions -- not opinions of the student of the social phenomena, of course, but opinions of those whose actions produce the object of the social scientist."

 
Wikipedia: Friedrich Hayek
Western Philosophy
20th-century philosophy
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Friedrich Hayek

Name

Friedrich August von Hayek

Birth

1899 May 8 (Vienna, Austria-Hungary)

Death

1992 March 23 (Freiburg, Germany)

School/tradition

Old Whig, Classical liberalism and Austrian economics

Main interests

Economics, social and political philosophy, philosophy of mind

Notable ideas

Economic calculation problem, Catallaxy, Extended order, Dispersed knowledge, Spontaneous order

Influences

Bernard Mandeville, Adam Smith, David Hume, Adam Ferguson, John Locke, Edmund Burke, Alexis de Tocqueville, Lord Acton, Carl Menger, Eugen von Bohm-Bawerk, Friedrich Wieser, Ludwig von Mises, Max Weber, Karl Popper

Influenced

Karl Popper, Konrad Lorenz, Robert Nozick, Israel Kirzner, Murray Rothbard, John Hicks, George Stigler, Ben Reid, Milton Friedman, Michael Novak, Barry Goldwater, Ronald Reagan, Thomas Sowell, Margaret Thatcher, Václav Klaus, Bruno Leoni, Giovanni Sartori, Dario Antiseri, Bruce Caldwell, John Gray, Jimmy Wales, Ludwig Erhard

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Friedrich August von Hayek, CH (May 8, 1899 in ViennaMarch 23, 1992 in Freiburg) was an Austrian-British economist and political philosopher known for his defence of classical liberalism and free-market capitalism against socialist and collectivist thought in the mid-20th century. He is considered to be one of the most important economists and political philosophers of the twentieth century.[1] One of the most influential members of the Austrian School of economics, he also made significant contributions in the fields of jurisprudence and cognitive science. He shared the 1974 Nobel Prize in Economics with ideological rival Gunnar Myrdal "for their pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena."[2] He also received the U.S. Presidential Medal of Freedom in 1991.[3]

Life

Hayek was born in Vienna into an aristocratic family of prominent intellectuals working in the fields of statics and biology. His father published a major botanical treatise while working as a doctor in the government's social welfare system. On his mother's side, he was second cousin to the philosopher Ludwig Wittgenstein. When the Great War began in 1914, Hayek lied about his age and joined the Austro-Hungarian army. He survived the war without serious injury and was decorated for bravery. After being discharged he decided to pursue an academic career. At the University of Vienna, he earned doctorates in law and political science in 1921 and 1923 respectively, and he also studied psychology and economics with keen interest. Initially sympathetic to socialism, Hayek's economic thinking was transformed during his student years in Vienna through attending Ludwig von Mises' private seminars along with Fritz Machlup and other young students. He was a student of Friedrich von Wieser.

Hayek worked as a research assistant to Prof. Jeremiah Jenks of New York University from 1923 to 1924. He then worked for the Austrian government helping to work out the legal and economic details of the international treaty ending World War I. Hayek then set up and became director of the Austrian Institute for Business Cycle Research before joining the faculty of the London School of Economics at the behest of Lionel Robbins in 1931. In the 1930s Hayek enjoyed a considerable reputation as a leading economic theorist, but his models were not received well by the followers of John Maynard Keynes and debate between the two schools of thought continues to this day. Unwilling to return to Austria after its annexation to Nazi Germany, Hayek became a British citizen in 1938, a status he held for the remainder of his life.

It was during this time that The Road to Serfdom originated. Hayek was concerned about the general view in Britain that National-Socialism was a capitalist reaction against socialism, and the book was to be the popular edition of the second volume of a treatise entitled "The Abuse and Decline of Reason".[4] It was written between 1940-1943 and the title came from the French liberal thinker Alexis de Tocqueville's writings on the "road to servitude".[5] It was first published in Britain by Routledge in March 1944 and was quite popular, leading Hayek to call it "that unobtainable book," also due in part to wartime paper rationing.[6] The book was favorably reviewed by George Orwell among others. When it was published in the United States by the University of Chicago in September of that year, it was far more popular than it had been in Britain, though it was not better received by critics. The American magazine Reader's Digest also published an abridged version in April 1945, enabling The Road to Serfdom to reach a far wider audience than academics.

In 1950, Hayek left the London School of Economics for the University of Chicago, becoming a professor in the Committee on Social Thought. (Hayek's position was unpaid and he was barred from entering the Economics department because of his Austrian economic views by one member whom he would not name and many speculate was Frank Knight. For his livelihood he depended on donations from private philanthropists.) At Chicago, he found himself among other prominent economists, such as Milton Friedman, but, by this time, Hayek had turned his interests towards political philosophy and psychology — although he continued to work on economic issues, and most of his economic notes from this period have yet to be published.

In the aftermath of editing a book on John Stuart Mill's letters and a series of lectures he gave in Cairo in 1955, he intended to write two books on the liberal order, the first volume of this was to be The Constitution of Liberty.[7] He worked on The Constitution of Liberty for the next four years, completing it in May 1959, with it being published in February 1960. Among others, Hayek sent copies of this work to former U.S. President Herbert Hoover and the then Vice President, Richard Nixon, who sympathised with the book's basic arguments.[8] However Hayek was disappointed by the book's general reception, it not being as popular as The Road to Serfdom had been fifteen years before.

From 1962, until his retirement in 1968, he was a professor at the University of Freiburg. It was here that Law, Legislation and Liberty was mostly written. This was not intended for a general audience, and it was published in three volumes in 1973, 1976 and 1979.

In 1974, he shared the Nobel Memorial Prize in Economics, causing a revival of interest in the Austrian school of economics. In 1984, he was appointed as a member of the Order of the Companions of Honour by Queen Elizabeth II of the United Kingdom on the advice of British Prime Minister Margaret Thatcher for his "services to the study of economics." Later, he was a visiting professor at the University of Salzburg. In 1991 George H. W. Bush awarded Hayek with the Presidential Medal of Freedom, one of the two highest civilian awards in the United States, for a "lifetime of looking beyond the horizon". Hayek died in 1992 in Freiburg, Germany.

Work

The economic calculation problem

Hayek was one of the leading academic critics of collectivism in the 20th century. Hayek believed that all forms of collectivism (even those theoretically based on voluntary cooperation) could only be maintained by a central authority of some kind. In his popular book, The Road to Serfdom (1944) and in subsequent works, Hayek claimed that socialism required central economic planning and that such planning in turn had a risk of leading towards totalitarianism, because the central authority would have to be endowed with powers that would impact social life as well, and because the scope of knowledge required for central planning is inherently decentralized.

Building on the earlier work of Mises and others, Hayek also argued that, in centrally-planned economies, an individual or a select group of individuals must determine the distribution of resources, but that these planners will never have enough information to carry out this allocation reliably. The efficient exchange and use of resources, Hayek claimed, can be maintained only through the price mechanism in free markets (see economic calculation problem). In The Use of Knowledge in Society (1945), Hayek argued that the price mechanism serves to share and synchronise local and personal knowledge, allowing society's members to achieve diverse, complicated ends through a principle of spontaneous self-organization. He coined the term catallaxy to describe a "self-organizing system of voluntary co-operation."

In Hayek's view, the central role of the state should be to maintain the rule of law, with as little arbitrary intervention as possible.

Spontaneous order

Hayek viewed the free price system, not as a conscious invention (that which is intentionally designed by man), but as spontaneous order, or what is referred to as "that which is the result of human action but not of human design". Thus, Hayek put the price mechanism on the same level as, for example, language. Such thinking led him to speculate on how the human brain could accommodate this evolved behaviour. In The Sensory Order (1952), he proposed, independently of Donald Hebb, the connectionist hypothesis that forms the basis of the technology of neural networks and of much of modern neurophysiology.

Hayek attributed the birth of civilisation to private property in his book The Fatal Conceit (1988). According to him, price signals are the only possible way to let each economic decision maker communicate tacit knowledge or dispersed knowledge to each other, in order to solve the economic calculation problem.

The business cycle

Capital, money, and the business cycle are prominent topics in Hayek's early contributions to economics. Mises had earlier explained monetary and banking theory in his Theory of Money and Credit (1912), applying the marginal utility principle to the value of money and then proposing a new theory of industrial fluctuations based on the concepts of the British Currency School and the ideas of the Swedish economist Knut Wicksell. Hayek used this body of work as a starting point for his own interpretation of the business cycle, which defended what later become known as the "Austrian Theory of the Business Cycle". In his Prices and Production (1931) and The Pure Theory of Capital (1941), he explained the origin of the business cycle in terms of central bank credit expansion and its transmission over time in terms of capital misallocation caused by artificially low interest rates.

The "Austrian business cycle theory" has been criticised by advocates of rational expectations and other components of neoclassical economics, who point to the neutrality of money and to the real business cycle theory as providing a sounder understanding of the phenomenon. Hayek, in his 1939 book Profits, Interest and Investment, distanced himself from a position held by other theorists of the Austrian School, such as Mises and later Rothbard, in beginning to shun the wholly monetary theory of the business cycle in favour of a more eccentric understanding based more on profits than on interest rates. Hayek explicitly notes that most of the more accurate explanations of the business cycle place more emphasis on real instead of nominal variables. He also notes that this more eccentric explanation model of the business cycle which he proposes cannot be wholly reconciled with any specific "Austrian" theory.

Social and political philosophy

In the latter half of his career Hayek made a number of contributions to social and political philosophy, which he based on his views on the limits of human knowledge[9], and the idea of spontaneous order in social institutions. He argues in favour of a society organised around a market order, in which the apparatus of state is employed almost, though not entirely, exclusively to enforce the legal order (comprised of abstract rules, and not particular commands) necessary for a market of free individuals to function. These ideas were informed by a moral philosophy derived from epistemological concerns regarding the inherent limits of human knowledge.

In his philosophy of science, which has much in common with that of his good friend Karl Popper, Hayek was highly critical of what he termed scientism: a false understanding of the methods of science that has been mistakenly forced upon the social sciences, but that is contrary to the practices of genuine science. Usually scientism involves combining the philosophers' ancient demand for demonstrative justification with the associationists' false view that all scientific explanations are simple two-variable linear relationships. Hayek points out that much of science involves the explanation of complex multi-variable and non-linear phenomena, and that the social science of economics and undesigned order compares favorably with such complex sciences as Darwinian biology. These ideas were developed in The Counter-Revolution of Science: Studies in the Abuse of Reason, 1952 and in some of Hayek's later essays in the philosophy of science such as "Degrees of Explanation" and "The Theory of Complex Phenomena".

In The Sensory Order: An Inquiry into the Foundations of Theoretical Psychology (1952), Hayek independently developed a "Hebbian learning" model of learning and memory — an idea which he first conceived in 1920, prior to his study of economics. Hayek's expansion of the "Hebbian synapse" construction into a global brain theory has received continued attention among the best minds in neuroscience, cognitive science, computer science, behavioural science, and evolutionary psychology.

Hayek and conservatism

Hayek attracted new attention in the 1980s and 1990s with the rise of conservative governments in the United States and the United Kingdom. Margaret Thatcher, the Conservative British prime minister from 1979 to 1990, was an outspoken devotée of Hayek's writings. Shortly after Thatcher became Leader of the party, she “reached into her briefcase and took out a book. It was Friedrich von Hayek's The Constitution of Liberty. Interrupting [the speaker], she held the book up for all of us to see. ‘This’, she said sternly, ‘is what we believe’, and banged Hayek down on the table.”[10] After winning the 1979 election, Thatcher appointed Keith Joseph, the director of the Hayekian Centre for Policy Studies, as her secretary of state for industry in an effort to redirect parliament’s economic strategies. Likewise, some of Ronald Reagan’s economic advisers were friends of Hayek.[11].

Hayek wrote an essay entitled Why I Am Not a Conservative[12], (included as an appendix to The Constitution of Liberty) in which he disparaged conservatism for its inability to adapt to changing human realities or to offer a positive political program. His criticism was aimed primarily at European-style conservatism, which has often opposed capitalism as a threat to social stability and traditional values. Hayek identified himself as a classical liberal, but noted that in the United States it had become almost impossible to use "liberal" in its original definition. In the U.S., Hayek is often described as a “libertarian”, but his preference was for “Old Whig” (a phrase borrowed from Edmund Burke). In his later life he said: "I am becoming a Burkean Whig".[13]

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By 1947, Hayek was an organiser of the Mont Pelerin Society, a group of classical liberals who sought to oppose what they saw as "socialism" in various areas. He was also instrumental in the founding of the Institute of Economic Affairs, the free-market think tank that inspired Thatcherism. In his speech at the 1974 Nobel Prize banquet, Hayek, whose work emphasised the fallibility of individual knowledge about economic and social arrangements, expressed his misgivings about promoting the perception of economics as a strict science on par with physics, chemistry, or medicine (the academic disciplines recognised by the original Nobel Prizes).

While there is some dispute as to the matter of influence, Hayek had a long standing and close friendship with philosopher of science Karl Popper, also from Vienna. In a letter to Hayek in 1944, Popper stated, "I think I have learnt more from you than from any other living thinker, except perhaps Alfred Tarski." (See Hacohen, 2000). Popper dedicated his Conjectures and Refutations to Hayek. For his part, Hayek dedicated a collection of papers, Studies in Philosophy, Politics, and Economics, to Popper, and in 1982 said, "...ever since his Logik der Forschung first came out in 1934, I have been a complete adherent to his general theory of methodology." (See Weimer and Palermo, 1982). Popper also participated in the inaugural meeting of the Mont Pelerin Society. Their friendship and mutual admiration, however, do not change the fact that there are important differences between their ideas (See Birner, 2001).

Having heavily influenced Margaret Thatcher's economic approach, and some of Ronald Reagan's economic advisors, in the 1990s Hayek became one of the most-respected economists in Eastern Europe.

Hayek's greatest intellectual debt was to Carl Menger, who pioneered an approach to social explanation similar to that developed in Britain by Bernard Mandeville and the Scottish moral philosophers. He had a wide-reaching influence on contemporary economics, politics, philosophy, sociology, psychology and anthropology. For example, Hayek's discussion in The Road to Serfdom (1944) about truth, falsehood and the use of language influenced some later opponents of postmodernism (e.g., Wolin 2004).

Even after his death, Hayek's intellectual presence was noticeable, especially in the universities where he had taught: the London School of Economics, the University of Chicago, and the University of Freiburg. A number of tributes resulted, many posthumous. A student-run group at the LSE Hayek Society, was established in his honour. At Oxford University, there is also a Hayek Society. The Cato Institute named its lower level auditorium after Hayek, who had been a Distinguished Senior Fellow at Cato during his later years. Also, the auditorium of the school of economics in Universidad Francisco Marroquín in Guatemala is named after him.

Hayek was cited many times in the recent BBC TV series The Trap.

Selected bibliography

See also: List of books by Friedrich Hayek

1) Rules and Order, 1973
2) The Mirage of Social Justice, 1976
3) The Political Order of a Free People, 1979
  • The Fatal Conceit: The Errors of Socialism, 1989. (The content of the book was heavily influenced by William Warren Bartley.[14])

Notes

  1. ^ Edward Feser (edt), The Cambridge Companion to Hayek, Cambridge University Press (2007), ISBN 0521849772, p.13
  2. ^ Bank of Sweden (1974). The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 1974.
  3. ^ George H. W. Bush (1991-11-18). Remarks on Presenting the Presidential Medal of Freedom Awards.
  4. ^ Alan Ebenstein, Friedrich Hayek. A Biography (New York: Palgrave, 2001), p. 107.
  5. ^ Ibid., p. 116.
  6. ^ Ibid., p. 128.
  7. ^ Ibid., p. 195.
  8. ^ Ibid., p. 203.
  9. ^ The Use of Knowledge in Society
  10. ^ John Ranelagh, Thatcher's People: An Insider's Account of the Politics, the Power, and the Personalities (HarperCollins, 1991), p. ix.
  11. ^ Muller, Jerry Z. The Mind and the Market. Anchor Books, New York. 2003.
  12. ^ Why I Am Not a Conservative
  13. ^ E. H. H. Green, Ideologies of Conservatism. Conservative Political Ideas in the Twentieth Century (Oxford: Oxford University Press, 2004), p. 259.
  14. ^ http://libertyunbound.com/archive/2005_03/ebenstein-deceit.html

Bibliography

  • Birner, Jack, 2001, "The mind-body problem and social evolution," CEEL Working Paper 1-02.
  • Birner, Hack, and Rudy van Zijp, eds., Hayek: Co-ordination and Evolution: His legacy in philosophy, politics, economics and the history of ideas (1994)
  • Caldwell, Bruce, 2005. Hayek's Challenge: An Intellectual Biography of F.A. Hayek.
  • Cohen, Avi J. "The Hayek/Knight Capital Controversy: the Irrelevance of Roundaboutness, or Purging Processes in Time?" History of Political Economy 2003 35(3): 469-490. Issn: 0018-2702 Fulltext: online in Project Muse, Swetswise and Ebsco
  • Brian Doherty. 2007. Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement
  • Ebenstein, Alan O., 2001. Friedrich Hayek: A Biography.
  • Gray, John, 1998. Hayek on Liberty.
  • Hacohen, Malachi, 2000. Karl Popper: The Formative Years, 1902 – 1945.
  • Horwitz, Steven. "Friedrich Hayek, Austrian Economist." Journal of the History of Economic Thought 2005 27(1): 71-85. Issn: 1042-7716 Fulltext: in Swetswise, Ingenta and Ebsco
  • Kasper, Sherryl, 2002, The Revival of Laissez-Faire in American Macroeconomic Theory: A Case Study of Its Pioneers. Chpt. 4.
  • Kley, Roland, 1994. Hayek's Social and Political Thought. Oxford Univ. Press.
  • Muller, Jerry Z., 2002. The Mind and the Market: Capitalism in Western Thought. Anchor Books.
  • Rosenof, Theodore, 1974, "Freedom, Planning, and Totalitarianism: The Reception of F. A. Hayek's Road to Serfdom," Canadian Review of American Studies.
  • Samuelson, Richard A. "Reaction to the Road to Serfdom." Modern Age 1999 41(4): 309-317. Issn: 0026-7457 Fulltext: in Ebsco
  • Shearmur; Jeremy, 1996. Hayek and after: Hayekian Liberalism as a Research Programme. Routledge.
  • Touchie, John, 2005. Hayek and Human Rights: Foundations for a Minimalist Approach to Law. Edward Elgar.
  • Vernon, Richard. "The 'Great Society' and the 'Open Society': Liberalism in Hayek and Popper." Canadian Journal of Political Science 1976 9(2): 261-276. Issn: 0008-4239 Fulltext: in Jstor
  • Weimer, W., and Palermo, D., eds., 1982. Cognition and the Symbolic Processes. Lawrence Erlbaum Associates. Contains Hayek's essay, "The Sensory Order after 25 Years" with "Discussion."
  • Wolin, R. 2004. The Seduction of Unreason: The Intellectual Romance with Fascism from Nietzsche to Postmodernism. Princeton University Press, Princeton.

See also

External links

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Persondata
NAME Hayek, Friedrich August von
ALTERNATIVE NAMES
SHORT DESCRIPTION Austrian, later British, economist and political philosopher; Nobel Memorial Prize winner; professor; Austrian school member; supported free markets and liberal democracy; anti-Marxist
DATE OF BIRTH May 8 1899(1899--)
PLACE OF BIRTH Vienna, Austria-Hungary (now Austria)
DATE OF DEATH March 23 1992
PLACE OF DEATH Freiburg, Baden-Württemberg, Germany