Friedrich August von Hayek

All about          F.A. von Hayek

"All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well [...]."

Friedrich August von Hayek was born on May 8, 1899 in Vienna, Austria, to a family with remarkable academic tradition - one of his cousins being famous philosopher Ludwig Wittgenstein. After doing military service in Italy during World War I, he attended the University of Vienna as a law student and earned his doctor's degree in 1921. However, his interest soon shifted toward economics and politics. In 1923 he obtained his second degree in political science as a student of Friedrich von Weiser, an outstanding Austrian economist in the tradition of Carl Menger.

Having finished his studies in Vienna, Hayek was offered to work as an assistant at New York University. After a year he returned to Austria. Being concerned about prevailing poverty in Vienna between the two world wars, Hayek started out as a socialist, influenced by the ideas of the Fabian Society, a group of intellectuals founded 1884 in London.

However, reading Ludwig von Mises on the impossibility of economic calculation in Socialism opened his eyes. Impressed by Mises's extraordinary intellect and his consistent critique of central planning, Hayek began attending the famous "Privatseminar", a get-together of the most important economists and philosophers of the time held by Mises in Vienna.

With the help of Mises, Hayek founded the Austrian Institute for Trade Cycle Research in 1927, a pioneering economic research institute that is still operating today (under a different name).

Having been promoted to a professor, he lectured in Vienna, Copenhagen, and Cambridge throughout the early thirties. At the London School of Economics, he was offered the Tooke Professorship of Economic Science. This is where he met John Maynard Keynes, who became one of his main professional adversaries, although being a good friend. Keynes published his General Theory in 1936, which set the stage for heavy state interventionism, later referred to as Keynesianism. Hayek, who thought that the state did more harm than good when interfering with the market, became intellectually isolated. At the same time the Nazis took over Austria and put an end to a rich intellectual tradition, such as the Austrian School of Economics or the Viennese Circle. In 1938 Hayek had become British citizen. He helped his friend, the famous Austrian philosopher of the Viennese Circle, Karl R. Popper, to establish himself at the London School of Economics as well.

It was only in 1944 when Hayek regained public attention through his most famous book The Road to Serfdom. Addressed to socialist intellectuals - "the socialists in all parties" as Hayek wrote - it showed that political and economic freedom have to go together. Hayek gave an almost prophetic account of how central planning necessarily destroys political freedom - it was maybe the crucial book that prevented Western Europe from imitating Soviet socialism.

To gather the dispersed and isolated liberals in an age of warfare and suppression of liberty throughout the world, Hayek founded the Mont Pèlerin Society. On the April 1, 1947, thirty-six outstanding liberal intellectuals, like Karl Popper, Ludwig von Mises, Milton Friedman and Frank Knight, met for the first time at Mont Pèlerin right above the Geneva Lake in Switzerland.

In the late 1940s Hayek moved to the United States. He joined the Committee on Social Thought to teach in Social and Moral Sciences at the University of Chicago, where he worked with Milton Friedman and George Stigler. In 1960 Hayek published his most important book - The Constitution of Liberty - a thorough work on liberalism based on the philosophy of law. Then Hayek returned to Europe and taught throughout the 1960s economics at the University of Fribourg. After having become emeritus in 1969, he finally came back to Austria to lecture at the University of Salzburg.

In 1974 Hayek was awarded the Nobel Prize in economics together with Gunnar Myrdal (a socialist who had shown the negative effect minimum wage laws had on black people in the US though). The Nobel Prize was a late recognition for Hayek's path breaking contributions to economics, as in his famous essay of 1945 The Use of Knowledge in Society. Hayek explained economic processes as cognitive problems. After Adam Smith's concept of a division of labour, Hayek in a way described a "division of knowledge" in an advanced society. His approach to social developments as expressions of "spontaneous order" makes Hayek a pioneer of the theory of "self organization".

During the 1970s and 1980s Hayek wrote many important books, such as Law, Legislation, and Liberty and The Fatal Conceit. Throughout his life he remained an ardent defender of liberty. His most important contributions to liberalism are his philosophical, legal and historical analyses on the rule of law, and his writings refuting constructivism, exaggerated rationalism, and socialism. Hayek always refrained from party politics, but longed for a really liberal party in the tradition of the British Whigs (the historical opposition to the Tories), as he put it, a "party of life", a "party that favors free growth and spontaneous evolution".

On March 23, 1992, Hayek died in Fribourg, Germany. He is buried in Vienna. Without doubt, Hayek is one of the most important exponents of Austrian school of economics, and among the leading economists of the twentieth century. By the end of his life, Hayek was vindicated to such an extent that some even refer to that century as the "Hayek century".