Friedrich Hayek


Friedrich Hayek : biography

8 May 1899 – 23 March 1992

Hayek is widely recognized for having introduced the time dimension to the equilibrium construction and for his key role in helping inspire the fields of growth theory, information economics, and the theory of spontaneous order. The "informal" economics presented in Milton Friedman’s massively influential popular work Free to Choose (1980), is explicitly Hayekian in its account of the price system as a system for transmitting and coordinating knowledge. This can be explained by the fact that Friedman taught Hayek’s famous paper "The Use of Knowledge in Society" (1945) in his graduate seminars.

In 1944 he was elected as a Fellow of the British Academy,Fritz Machlup, Essays on Hayek, Routledge, 2003. p 14. after he was nominated for membership by Keynes.Sylvia Nasar, Grand Pursuit: The Story of Economic Genius, Simon and Schuster, 2011, p. 402

Harvard economist and former Harvard University President Lawrence Summers explains Hayek’s place in modern economics: "What’s the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That’s the consensus among economists. That’s the Hayek legacy."Lawrence Summers, quoted in The Commanding Heights: The Battle Between Government and the Marketplace that Is Remaking the Modern World, by Daniel Yergin and Joseph Stanislaw. New York: Simon & Schuster. 1998, pp. 150–151.

By 1947, Hayek was an organizer 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. He was in addition a member of the Philadelphia Society.

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 that "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, and for the mutual influence they had on each other’s ideas on evolution, Birner 2009

Hayek also played a central role in Milton Friedman’s intellectual development: "My interest in public policy and political philosophy was rather casual before I joined the faculty of the University of Chicago. Informal discussions with colleagues and friends stimulated a greater interest, which was reinforced by Friedrich Hayek’s powerful book The Road to Serfdom, by my attendance at the first meeting of the Mont Pelerin Society in 1947, and by discussions with Hayek after he joined the university faculty in 1950. In addition, Hayek attracted an exceptionally able group of students who were dedicated to a libertarian ideology. They started a student publication, The New Individualist Review, which was the outstanding libertarian journal of opinion for some years. I served as an adviser to the journal and published a number of articles in it…."Milton & Rose Friedman, Two Lucky People: Memoirs, (U. of Chicago Press), 1998. p. 333

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 in the Scottish Enlightenment. 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