Timeline
- 1899
- Born in Vienna.
- 1914
- Joined the Austro-Hungarian army in World War I.
- 1921
- Received doctorate in Law from the University of Vienna.
- 1923
- Received doctorate in Political Science from the University of Vienna.
- 1923
- Appointed as research assistant at New York University.
- 1931
- Appointed to the faculty of the London School of Economics.
- 1938
- Emigrated to the United Kingdom to avoid the Nazi control of Austria.
- 1944
- Publication of The Road to Serfdom.
- 1950
- Appointed Professor at the University of Chicago.
- 1960
- Publication of The Constitution of Liberty.
- 1962
- Appointed Professor at the University of Frieburg.
- 1974
- Received the Nobel Memorial Prize in Economics, shared with Gunnar Myrdal.
- 1984
- Appointed a Member of the Order of the Companions of Honour in the UK.
- 1988
- Publication of The Fatal Conceit.
- 1991
- Receives the US Presidential Medal of Freedom.
- 1992
- Died in Freiburg, Germany.
Life and Career
Friedrich Hayek was an influential Austrian economist, and political philosopher, known for his defense of classical liberalism and free-market capitalism in the mid-20th century. After being decorated for bravery in World War I, and aiding the Austrian government at the Treaty of Versailles, he founded and served as director of the Austrian Institute for Business Cycle Research, before joining the faculty of the London School of Economics. In 1947, he was an organizer of the Mont Pelerin Society, a group of classical liberals who opposed socialism in various areas. Hayek received the Nobel Prize, along with Gunnar Myrdal, for his work on the theory of money and economic fluctuations, and the interdependence of economic, social, and institutional phenomena. Hayek was a prolific researcher and writer over nearly seven decades, and was seen as a central figure in the move from interventionism and Keynesian policies towards classical liberalism. He was also instrumental in the founding of the Institute of Economic Affairs, the free-market think-tank that inspired Reaganomics and Thatcherism.
Key Thinking
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Hayek propounded free-market economics, and applied his thinking to issues of political organization, the impact of capital, and the business cycle.
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He opposed government intervention in the marketplace, and was a fierce critic of Keynesian welfare economics.
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His writings also strongly criticized collectivism, as being dependent on a central authority; he argued that the central role of the state should be to maintain the rule of law, and avoid arbitrary intervention as much as possible.
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In The Road to Serfdom, his classic work on liberalism, political philosophy, cultural history, and economics, he warned against the dangers of state control, and collectivist principles that can lead to tyranny.
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Using the Soviet Union and Nazi Germany as examples, he explained that in a centrally planned economy, the distribution of resources would always devolve onto a small group, which would not be able to process the necessary information to distribute the resources effectively.
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In Prices and Production and The Pure Theory of Capital, he explained the origin of the business cycle in terms of central bank credit expansion, and its transmission over time.
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Prices and Production introduced the concept of Hayekian triangles, to depict the relationship between the value of capital goods and their place in the temporal sequence of production.
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In The Pure Theory of Capital, he described how the economy’s structure of production depends on the characteristics of capital goods.
In Perspective
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One of the foremost members of the Austrian school of economics, he advocated individualism, and economic theories based on the basic principles of human action.
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His research on social and political philosophy was based on an understanding of the limits of human knowledge and the concept of spontaneous order in social institutions–arguing in favor of organizing society around a market order, where the state is focused on enforcing a free market based around the individual.
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His early works on industrial fluctuations, and prices as signals, were influential, as were his contributions to jurisprudence and cognitive science.
Quotation
“A claim for equality of material position can be met only by a government with totalitarian powers.”
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