Friedrich Hayek: life, ideas and books

Life

Friedrich Hayek was born in Vienna in 1899 and earned doctorates in law and political science at the University of Vienna. He directed the Austrian Institute for Business Cycle Research in the late 1920s, then joined the London School of Economics in 1931, where he taught until 1950, and became a British citizen in 1938.

He held professorships at the University of Chicago from 1950 to 1962, at Freiburg from 1962 to 1968 and at Salzburg from 1969 to 1977. In 1974 he shared the Nobel Memorial Prize in Economic Sciences with Gunnar Myrdal. He helped found the Mont Pelerin Society and received the Presidential Medal of Freedom in 1991. He died in Freiburg in 1992. He did not like to be called a conservative and preferred the label classical liberal.

Ideas

In "The Use of Knowledge in Society" (1945) Hayek argued that the knowledge needed to run an economy is scattered among millions of people, and that prices carry that information far better than any central planner could collect it. This is the heart of the case against socialism's economic calculation. In The Road to Serfdom (1944) he warned that extensive economic planning tends to concentrate power and to endanger political and personal freedom.

He also developed a theory of the business cycle in which credit expansion and artificially low interest rates misdirect capital, and he defended law that is general and impersonal against discretionary rule. He wrote about spontaneous order, the idea that many institutions grow from human action without being designed.

Major works

• Prices and Production (1931).
• The Road to Serfdom (1944).
• "The Use of Knowledge in Society" (1945).
• The Constitution of Liberty (1960).
• Law, Legislation and Liberty (1973-79).
• The Fatal Conceit (1988).

Why conservatives read him

The Road to Serfdom is a foundational text for the movement that opposed central planning, and its influence reached Margaret Thatcher, Ronald Reagan and Barry Goldwater. Conservatives draw on his argument that markets, law and tradition convey knowledge no authority can replace, and on his warning about concentrated state power. Some also note that his insistence on being called a liberal reflects disagreements within the wider movement.