Hayek, Friedrich August von
Friedrich August von Hayek 1899–-1992
Austrian philosopher, economist, and social scientist.
For forty years, Hayek was the leading intellectual defender of economic free markets. With his mentor, Ludwig von Mises, he was the most well-known exponent of the Austrian School of Economics, which emphasizes the inability of governments to predict the economic needs and wants of a society and the destructive nature of political attempts to manipulate the value of money. His most widely known work, The Road to Serfdom (1944), propelled him to international fame by arguing, just as the Second World War was ending, that Western democracies were in danger of following Germany down the road to tyranny by relying too much on government intervention in the economic sphere. Convinced that economic problems have their solution in a proper understanding of human nature, in mid-career Hayek moved beyond economics to the realm of philosophy. His later works emphasized the role families, private property, and habitual honesty played in developing a “spontaneous order” in free societies, producing prosperity and political freedom. Hayek's emphasis on the moral imperative and economic efficiency of liberty made him the philosophical father of modern libertarianism and placed him among a handful of twentieth-century thinkers most influential on free-market economic policies and conservative thought in general.
Hayek was born May 8, 1899, in Vienna, Austria, to a family of scientists and scholars. He earned two doctorates from the University of Vienna, studying under important figures within the Austrian School of Economics. After finishing his degrees Hayek went to work for leading Austrian economist Mises at an Austrian government office, then joined him in founding an institute to examine cycles of business activity. Hayek would refer to Mises as the greatest intellectual influence on his life and devote much of his efforts to building on Mises's critique of socialism. Hayek's early work on the causes of boom and bust in business cycles garnered him an invitation to become professor of Economic Science and Statistics at the London School of Economics. Here his criticism of government interference in the economy brought him into conflict with supporters of the powerful English proponent of economic planning, John Maynard Keynes. The dire economic consequences of the Great Depression discredited Hayek's theories in the eyes of the economic and political establishment. At the end of World War II, however, Hayek gained worldwide fame through publication of The Road to Serfdom. In this book Hayek argued that government planning, if not checked, would inevitably bring tyranny as political leaders demanded increasing discretion to deal with the inescapable failure of their plans and the equally inevitable resistance of individuals to state control over their lives. In 1950 Hayek became professor of Social and Moral Sciences at the University of Chicago. Here he turned increasingly to questions of methodology, arguing in numerous publications that methods of study developed in the natural sciences are inappropriate to the study of human nature and the social order. Here also he wrote his most systematic work of political thought, The Constitution of Liberty (1960), which established him as the leading intellectual proponent of the idea that human freedom is the highest moral and political good. In 1962 Hayek became professor of Economic Policy at the University of Frieburg. On his retirement in 1967 he became honorary professor at the University of Salzburg. The high point of Hayek's career came in 1974, when he was awarded the Nobel Prize for Economics. He shared the prize with socialist economist Gunnar Myrdal. Hayek died March 23, 1992.
Hayek's early work in economics focused on monetary theory and the trade cycle. He published several articles and a book in German before making his entrance onto the international stage. He accomplished this through a series of four lectures at the London School of Economics, published under the title Prices and Production (1931). In it, Hayek theorized that when a government artificially lowers interest rates in an attempt to increase investment, it produces an over-expansion of productive capacity, which is inevitably followed by a severe economic contraction. This book gained Hayek the enmity of the supporters of Keynes, who promoted monetary expansion as a means by which to end the Great Depression. Critical hostility and economic events meant that, during this era, Hayek's technical works in economics received scant attention. Ironically, it was Hayek's most polemical work, The Road to Serfdom, that gained him worldwide notoriety and a status as the leading theorist of free-market economics that lasts to this day. In 1948 Hayek published a collection of essays, under the title Individualism and Economic Order, elaborating on his view that socialist governments lack the ability to institute price levels that will produce the savings and investments needed to maintain economic growth. By this time Hayek was convinced that economists were bringing more harm than good to the public because they were using fundamentally flawed methods in their study of human interaction. His Counter-Revolution of Science (1952) is a collection of essays centered on the argument that the methods of the natural sciences are inappropriate to the study of human action because, unlike plants and inanimate objects, human beings exercise free will. The centrality of free will in Hayek's thought was clearly demonstrated in his most systematic work, The Constitution of Liberty. In this work Hayek sought to combine economic, political, and biological arguments to present a unified theory of human freedom. He argued that free societies spontaneously develop an economic and political order building on members' talents and the group's historical knowledge. Attempts to overturn or supercede the spontaneous order of these institutions would institute a regime of unlimited discretion and power. During the next thirty years Hayek produced a stream of books and articles elaborating his critique of centralized planning and the flawed social-science methods he believed were being used to support it. His final work, The Fatal Conceit (1991), was an appropriate summing up of his career, blaming oppression in the twentieth century largely on intellectuals' self-flattering view that they could use government to create a “just” society when justice is a meaningful concept only in judging individual, not group conduct.
Critical reception of Hayek's work has varied greatly depending on the era and the political persuasion of the reviewer. His economic views, long disparaged on the political left, gained a rebirth with the rise of free-market governments in Britain and the United States during the 1970s and 1980s, and reached new heights with the collapse of the Soviet Union. Critics on the left continue to attack his work for its hostility toward the pursuit of social justice. Even on the political right Hayek's work spurs controversy because he rejected both centralized planning and the pull of tradition. He attached to his Constitution of Liberty an appendix explaining “Why I am not a Conservative,” that continues to garner criticism among defenders of tradition and praise among those committed to free markets and material progress as absolute goods. Critics of all political persuasions agree, however, that Hayek was a powerful system builder, dedicated to the idea that freedom is both the natural basis and the proper goal of human society.
Prices and Production (lectures) 1931
Profits, Interest and Investment (essays) 1939
The Pure Theory of Capital (nonfiction) 1941
The Road to Serfdom (philosophy) 1944
Individualism and Economic Order (essays) 1948
The Counter-Revolution of Science: Studies on the Abuse of Reason (essays) 1952
The Constitution of Liberty (philosophy) 1960
Studies in Philosophy, Politics and Economics (essays) 1967
Law, Legislation and Liberty, Vol. 1, Rules and Order (philosophy) 1973
Law, Legislation and Liberty, Vol. 2, The Mirage of Social Justice (philosophy) 1978
Law, Legislation and Liberty, Vol. 3, The Political Order of a Free People (philosophy) 1979
The Fatal Conceit: The Errors of Socialism [edited by W. W. Bartley] (philosophy) 1991
SOURCE: “Dr. Hayek on Money and Capital,” in The Economic Journal, Vol. 42, No. 1, March, 1932, pp. 42-53.
[In the following review of Hayek's Prices and Production, Sraffa criticizes Hayek for his assumption that money should not be used as a tool for increasing investment.]
To deal with the theory of money, from its doctrinal history down to the inevitable practical proposals, touching upon some of the most perplexing parts of the subject, and all this in four lectures, must have been a feat of endurance on the part of the audience as much as of the lecturer. For, however peculiar, and probably unprecedented, their conclusions may be, there is one respect...
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SOURCE: A review of The Road to Serfdom, in The Journal of Political Economy, Vol. 54, No. 3, June, 1946, pp. 269-70.
[In the following review of Hayek's Road to Serfdom, Schumpeter praises Hayek's sincerity but disagrees with his belief that people want and are capable of exercising individual freedom.]
[The Road to Serfdom] is a political book, so Hayek—setting an excellent example—frankly tells us in his Preface. It is, moreover, a courageous book: sincerity that scorns camouflage and never minces matters is its outstanding feature from beginning to end. Finally, it is also a polite book that hardly ever attributes to opponents anything...
(The entire section is 1451 words.)
SOURCE: A review of The Counter-Revolution of Science: Studies on the Abuse of Reason, in The Journal of Philosophy, Vol. XLIX, No. 17, August 14, 1952, pp. 560-65.
[In the following review of Hayek's Counter-Revolution of Science, Nagel disagrees with Hayek's contention that the importation of the methods of natural science into the study of human interaction is wrong-headed and doomed to produce unworkable political programs.]
In this interesting book—its contents first appeared as separate articles, chiefly in Economica—Professor Hayek constructs a methodological underpinning for the critique of current social theory and economic policy he...
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SOURCE: “Hayek on Liberty,” in Economica, Vol. 28, No. 109, February, 1961, pp. 66-81.
[In the following review of Hayek's Constitution of Liberty, Robbins praises Hayek's commitment to individual freedom but criticizes his refusal to include English nineteenth-century Utilitarians such as Jeremy Bentham among its defenders.]
[The Constitution of Liberty]1 is a very ambitious book. “It has been a long time,” says the author, “since that ideal of freedom which inspired modern Western civilization and whose partial realization made possible the achievements of that civilization was effectively restated”2: it is such a...
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SOURCE: “Hayek on Liberty,” in Philosophy, Vol. XXXVIII, No. 145, October, 1963, pp. 346-60.
[In the following review of Hayek's Constitution of Liberty, Rees favorably examines Hayek's distinction between fact-based, empirical liberalism and liberalism that is overly abstract and hence based on a false view of human nature.]
Professor Hayek's book [Constitution of Liberty]1 is a massive contribution to the persistent question of the limits of state action. It runs counter to prevailing notions about the role of government in economic and social matters to such an extent that a common reaction to its publication has been to simply shrug it...
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SOURCE: “Hayek's Contribution to Economics,” in Essays on Hayek, New York University Press, 1976, pp. 13-59.
[In the following essay, Machlup provides an extensive review of Hayek's contributions to economic theory and the defense of free markets.]
This review of the scholarly publications of Friedrich A. von Hayek is arranged under the following headings: Biographical Sketch; Bibliographical Overview; Money, Credit, Capital, and Cycles; Socialism, Planning, and Competitive Capitalism; Legal and Political Philosophy; History of Ideas; An Essay in Psychology; Philosophy of Science; and Final Assessment.
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SOURCE: “The New Thought of F. A. Hayek: His Political and Legal Theory,” in Modern Age, Vol. 20, No. 1, Winter, 1976, pp. 54-61.
[In the following essay, Shenfield reviews the connections between Hayek's legal and political thought, emphasizing his commitment to the rule of law as the primary defense of human liberty against political encroachments.]
After Professor Hayek had published his Constitution of Liberty, he could perhaps have sat back to enjoy the fame and ease that what appeared to be the culminating work of a great career of scholarship had made his due. However, that was not in the character of the man. His mind has never ceased to probe the...
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SOURCE: “Understanding How Society Works,” in Hayek, His Contribution to the Political and Economic Thought of Our Time, Universe Books, 1985, pp. 15-40.
[In the following excerpt, Butler provides an overview of Hayek's theories regarding the ways by which human beings come to form societies.]
If we are to understand how society works, we must attempt to define the general nature and range of our ignorance concerning it.1
Throughout his writings, Hayek points to a very common but mistaken belief about the way in which social institutions work. Put simply, this is the belief that since man has himself...
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SOURCE: “The Austrian Connection: Hayek's Liberalism and the Thought of Carl Menger1,” in Austrian Economics, edited by Wolfgang Grassl and Barry Smith, New York University Press, 1986, pp. 210-24.
[In the following essay, Shearmur traces the roots of Hayek's political and economic views in the thought of Austrian social theorist Carl Menger.]
Despite his Austrian origins, Hayek is often regarded as the latter-day spokesman of a largely British liberal tradition. This tradition—ranging through Mandeville, Hume, the Scottish Enlightenment, Burke and bits of J. S. Mill—is, however, in some ways Hayek's own...
(The entire section is 5883 words.)
SOURCE: “A Road to Hell Paved With Good Intentions,” in Forbes, Vol. 153, No. 2, January 17, 1994, pp. 60-4.
[In the following essay, Sowell discusses the role played by Hayek and his Road to Serfdom in gaining support for free markets in the aftermath of World War II and the ensuing Cold War.]
The 20th century looked for many decades as if it were going to be the century of collectivism, and for a while totalitarianism seemed like “the wave of the future,” as it was called back in the 1930s. Fascism in Italy, communism in the Soviet Union, and Nazism in Germany looked like only the beginning, momentous as those beginnings were. Fascist and semi-fascist...
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SOURCE: “Hayek and the Left,” in Political Quarterly, Vol. 67, No. 1, January-March, 1996, pp. 46-53.
[In the following essay, Gamble discusses the reception of Hayek's writings among critics on the political left.]
Hayek is one of the most important thinkers of the twentieth century, but there has always been a tendency for intellectuals on the left to neglect or belittle his achievement. He has been frequently dismissed as a right-wing ideologue, whose energies were spent in a crusade against socialism and an attempt to revive an obsolete creed, economic liberalism. His arguments have often been regarded as exaggerated and polemical.
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SOURCE: “The Twentieth Century: The Limits of Liberal Political Philosophy,” in An Uncertain Legacy: Essays on the Pursuit of Liberty, edited by Edward B. McLean, The Intercollegiate Studies Institute, 1997, pp. 193-224.
[In the following essay, Gray criticizes Hayek for constructing a philosophical system that is too dependent on the logic of economic exchange in explaining all kinds of human interaction.]
In Friederich August von Hayek's work we find one of the most ambitious attempts we possess thus far to develop a comprehensive liberal political philosophy. Unlike the fashionable liberalisms which take their cues from Rawls, Hayek's is noteworthy in making...
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SOURCE: “Social Justice: The Hayekian Challenge,” in Critical Review, Vol. 11, No. 1, Winter, 1997, pp. 65-80.
[In the following essay, Lukes examines Hayek's challenge to the idea that societies can and should be reshaped and made more just.]
Over two decades ago Friedrich Hayek declared himself convinced that “social justice” is a mirage: an illusory goal whose pursuit, moreover, can only lead to disaster. The expression, he thought, described “the aspirations which were at the heart of socialism”; indeed, “the prevailing belief in ‘social justice’ is at present probably the gravest threat to most other values of a free civilization” (Hayek 1976,...
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SOURCE: “The Liberalism/Conservatism of Edmund Burke and F. A. Hayek: A Critical Comparison,” in Humanitas, Vol. X, No. 1, 1997, pp. 70-88.
[In the following essay, Raeder compares Hayek's thought with that of Edmund Burke to argue that both share a commitment to a conservative, moderate liberalism.]
Edmund Burke, the passionate defender of the “ancient principles”1 of his forebears, might be surprised to discover that he originated a new school of political thought. By all accounts, however, he is the “modern founder of political conservatism,”2 and generations of ‘conservative’ thinkers have found his life and work a rich source...
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SOURCE: “The Road Not Taken: Hayek's Slippery Slope to Serfdom,” in The National Interest, No. 51, Spring, 1998, pp. 56-66.
[In the following essay, McInnes argues that Hayek's Road to Serfdom had less impact on political thought and practice than his supporters have claimed.]
This is another story about a book, a curious book that went from bestseller to oblivion and back several times over. The millions of copies it sold in a score of languages “completely discredited” its author, exactly as he foresaw it would. Although he was regarded as one of the leading theoretical economists of the century, the economists of the University of Chicago (whose...
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Leube, Kurt R. and Albert A. Zlabinger eds. Political Economy of Freedom: Essays in Honor of Friedrich A. Von Hayek, pp. 253-319. Munich: Philosophia Verlag, 1985.
Comprehensive bibliography of Hayek's books, essays, pamphlets and other writings.
Butler, Eamonn. Hayek: His Contribution to the Political and Economic Thought of Our Time, pp. 1-14. New York: Universe Books, 1985.
Sketches Hayek's life and career highlights.
Buckley, William F. Jr. “The Road to Serfdom: The Intellectuals and Socialism.” In...
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