Friedrich Hayek

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Friedrich August Von Hayek (1899-1992) was a Nobel Prize winning economist and one of the most prominent members of the Austrian School of Economics, a libertarian economic theory. Hayek emphasized our limited knowledge of the markets (and other subjects), and thus our need for the price mechanism to communicate essential information about supply and demand. His theories are that no centralized planner or government can manage the economy and that the free market is the most efficient known allocator of resources.

Although Hayek was a self-proclaimed agnostic—which helps explain why was allowed to win a Nobel Prize—analysis has shown that "his treatment of individual liberty was more consistent with a Judeo-Christian worldview than with that of his naturalist peers and postmodernist successors."[1]


Hayek was born in Vienna, which was then the capital of Austria-Hungary. As a teenager he studied biology, philosophy and ethics, before joining the Austrian Army aged 18 and becoming one of the pioneers of airborne artillery observation during World War 1. After the war he earned doctorates in law and political science. He moved to London in 1931 to be a professor at the London School of Economics. When Austria became part of Nazi Germany following the 1938 Anschluss Hayek refused to return there, and became a British subject.

Hayek was one of the most vocal and respected contemporary critics of the liberal and now widely discredited economist John Maynard Keynes.

Hayek has been compared to the philosopher David Hume with respect to his insistence that we should be "sensible of our ignorance."


Hayek (right) Solzhenitsyn (left) accepting Nobel Prizes in their respective fields, December 12, 1974.

Early work

Hayek's most influential work among economists are his 1935 academic papers "The Nature and History of the Problem" and "The Present State of the Debate," on the total inability of socialism to coordinate and allocate resources due to their lack of price signals, an effect that lead to the eventual collapse of the Soviet Union. Many of these ideas were developed in conjunction with his friend and mentor Ludwig von Mises.[2]

The Road to Serfdom

By far, Hayek's most famous book is The Road To Serfdom (1944). In it, he discusses the collapse of essential freedoms in the face of economic manipulation at the hands of well-meaning government actors. Written in Cambridge, UK from 1940 onwards, the book was intended mainly to warn a British audience of the dangers of socialism - a warning they sadly ignored by electing Labour's Clement Attlee to the premiership in the first post-war election in 1945 with, in time, catastrophic consequences for the British economy. The book faired much better in the US, becoming a runaway success after a condensed edition appeared in the Reader's Digest. John R. Searle chose Road to Serfdom as his book of the century, citing its very great influence on popular American post-war thought.

Other works

In addition to Hayek's well known book-sized publications, he received critical acclaim[3] for his 1945 essay titled The Use of Knowledge in Society, which is widely cited in the field of economics.

The Constitution of Liberty

In the 1950's and now domiciled in the United States, Hayek perceived the need for a more systematic popular treatment of the case for liberal democracy than the arguments he had advanced in Serfdom; the result was 1960's magisterial three-part The Constitution of Liberty. Although this new work, weighing-in at 350 pages plus extensive endnotes, could not hope to equal the success of his earlier book, nevertheless Hayek's Constitution had huge influence (especially in the UK, somewhat ironically) becoming, along with Popper's The Open Society and its Enemies, a founding text of Thatcherism. "This is what we believe," affirmed a stern-faced Margaret Thatcher at a 1975 opposition meeting, according to John Ranelagh - holding up her copy just long enough for the attendees to read the title before banging it down emphatically onto the table.

Criticism of Social Justice, Mill

Hayek was critical of John Stuart Mill for popularizing the term "social justice."[4]

Hayek wrote:

Yet Mill appears to have been wholly unaware of the circumstance that in this meaning it refers to situations entirely different from those to which the four other meanings apply, or that this conception of 'social justice' leads straight to full-fledged socialism.[5]


  • "Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom."
  • "'Emergencies' have always been the pretext on which the safeguards of individual liberty have been eroded."
  • "The more the state "plans" the more difficult planning becomes for the individual."
  • "Justice is an attribute of individual action. I can be just or unjust towards my fellow man. But the conception of a social justice, to expect from an impersonal process which nobody can control, to bring about a just result, is not only a meaningless conception, it's completely impossible. See everybody talks about social justice but if you press people to explain to you what they mean by social justice, nobody knows. I am telling you because I've been trying for the past 20 years, asking people, what really are your principles of social justice?"[6]


  • Birner, Hack, and Rudy van Zijp, eds., Hayek: Co-ordination and Evolution: His legacy in philosophy, politics, economics and the history of ideas (1994)
  • Brittan, Samuel "Hayek, Friedrich August (1899–1992)", Oxford Dictionary of National Biography, (2006) online
  • Caldwell, Bruce, 2005. Hayek's Challenge: An Intellectual Biography of F.A. Hayek.
  • Doherty, Brian. 2007. Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement
  • Ebenstein, Alan O., 2001. Friedrich Hayek: A Biography. excerpt and text search
  • Frowen, S. ed., (1997) Hayek: economist and social philosopher
  • Gamble, Andrew. (1996) The Iron Cage of Liberty, an analysis of Hayek's ideas
  • Gray, John, 1998. Hayek on Liberty.
  • 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.
  • Samuelson, Richard A. "Reaction to the Road to Serfdom." Modern Age 1999 41(4): 309-317. Fulltext online
  • 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

Primary sources

  • Hayek, Friedrich. Hayek on Hayek: an autobiographical dialogue, ed. S. Kresge and L. Wenar (1994)
  • Hayek, Friedrich. The collected works of F. A. Hayek, ed. W. W. Bartley and others (1988–)

See also


  2. Econ Talk, Russ Roberts and Bruce Caldwell 10 January, 2011
  3. Friedrich Hayek and the Price System
  4. (2014) Friedrich Hayek: A Biography. New York: Macmillan, 188. ISBN 978-0312233440. 
  5. (1978) Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice. Chicago: University of Chicago Press, 63–64. ISBN 978-0226320830. 
  6. Social Justice, a discussion on Firing Line with William F. Buckley

External links