2009-09-11 FNF PAK - Liberal Thinkers 01 - Hayek

Friedrich A. von Hayek
Liberal Thinkers 01
Olaf Kellerhoff
Resident Representative Pakistan

Olaf Kellerhoff Friedrich A. von Hayek 10.09.2009

Overview
1. Life
lifelong liberal and anti-socialist

2. Work
up to highest commitment
– winner of Nobel prize

3. Impact
influenced economic thinking
and liberal ideas


1. Life


Early Life
Born in multi-ethnic
Austro-Hungarian Empire
Son of a doctor
Noble family
Wide network of
academics, philosophers
World War I
at Italian front The decisive influence was really World War I. It's
bound to draw your attention to the problems of
political organization. F.A. Hayek

1. Life 2. Work 3. Impact


His studies
1918–21 studies in law
1921 Political Economics
Contacts to 2nd generation of
Austrian School
Employee of the Austrian Office for
Accounting of War Reparations
(Director: Ludwig von Mises)
1923–24 Rockefeller scholarship in
New York



Call for London
Founding together with von Mises the Austrian Institute
for Business Cycle Research -1931 Director
Teaching In LSE
1926 married Berta
Fritsch, 2 children
1929 Habilitation in
Political Economy:
private lecturer in
Vienna
1931 London School
of Economics (LSE)



Mont Pelerin Society
1938 Conference in Paris:
Concept of Neoliberalism
1947 Mont Pelerin Society (MPS)
Ludwig von Mises
Karl Popper
Milton Friedman
Frank Knight
Hayek – first president of MPS (left)
Current President Deepak Lal George Stigler called once MPS also
“The Friends of F.A. Hayek”
immense influence on politics



Chicago Years
Left London for Arkansas 1949 due to
mobbing and divorce
1950 Chicago Economic Department
Frank Knight
Milton Friedman
Georg Stigler
Productive years:
The Constitution of Liberty:
We can either have a free Parliament or a free people. Personal freedom requires that all
authority is restrained by long-run principles which the opinion of the people approves.



Freiburg (Germany)
1962 followed a call from Freiburg
University
Member of board of trustees
Walter-Eucken-Institut
1967 retired – continued teaching
1968 visiting professor in Salzburg
(Austria) I am certain that nothing has done
so much to destroy the juridical
1977 return to Freiburg safeguards of individual freedom
as the striving after this mirage of
social justice. F.A. Hayek



Retirement?
Kept on writing
Stronger direct involvement
in politics
Died in the circle of his
family 23rd of March 1992

Hayek (right) with Arthur Seldon
and Lord Ralph Harris in London, 1984



2. Work


Prices and Production, 1931
University lectures collected in a book
extending Ludwig von Mises business
cycle theory
changed in 1936 when John Maynard
Keynes published:
The General Theory of Employment, Interest
and Money
never refuted
left up to Milton Friedman to do



The pure Theory of Capital, 1941
Different concept
from Keynes
But too late: Keynes
already established

The late Hayek
having the bull named Inflation by the balls.


The Road to Serfdom, 1944
objection to government intervention
paving the way for totalitarian
regimes
Warning for post-war: do not
endanger the freedom you’re fighting
for now
made him famous inspiring politicians
and thinkers around the world
We shall all be the gainers if we can
create a world fit for small states to live in.


Individualism and Economic Order, 1952
There is all the difference in the world between treating people
equally and attempting to make them equal. While the first is the
condition of a free society, the second means as De Tocqueville
describes it, 'a new form of servitude.'
Hayek in:

Collection of essays from 1930s and 40s
From moral philosophy to methodology
of sciences and economic theory and
even politics like: Economic Conditions of
Interstate Federalism



The Constitution of Liberty, 1960

Against any attempt to
construct a society
All participants in markets will
always be more knowledgeable
then any steering committee
Arguments in details Adam
Smith’s invisible hand

The great aim of the struggle for liberty
has been equality before the law.


Denationalisation of Money, 1976
Government monopoly of money
must be abolished
To stop recurring bouts of
inflation and deflation
World Economic Crisis 1929 was
not lack of demand (as Keynes
stated) – but due to a wrong
policy of finance and economy



Law Legislation and Liberty, 1973/76/78
We must shed the illusion that we can
deliberately 'create the future of
mankind'…This is the final conclusion of
the forty years which I have now devoted
to the study of these problems…
Hayek in this book:

Perhaps not most famous, but one
of the most important work
Concept of competition as
method of discovery



The Fatal Conceit, 1988
examination and critique of the central
issues of socialism
Birth of civilization due to private property
Modern societies evolved and were not
planned as socialism attempts

[Hayek's The Fatal Conceit] fully supports the recent
characterization of Hayek by the Economist that he is
our time's preeminent social philosopher.
Peter Drucker



Famous Papers and Articles
The Use of Knowledge in Society, 1945
article against planned pricing and planned economy
The Sensory Order, 1952
psychological Essay on John Stuart Mill and Harriet
Taylor
Why I am not conservative
Essay disparaging conservatism for its inability to
adapt to changing realities
The Pretence of Knowledge, 1974
Lecture to the memory of Alfred Nobel accusing
“social engineers” who want to plan a society of
pretence of knowledge



Hayek on Hayek, 1994
Autobiography of an extraordinary
intellectual
From private life up to interpretations
of his work by others

I had a period of twenty years in which I bitterly regretted
having once mentioned to my wife after Keynes's death
that now Keynes was dead, I was probably the best-known
economist living. But ten days later it was probably no
longer true. At that very moment, Keynes became the
great figure, and I was gradually forgotten as an
economist. Hayek on Hayek



Main standpoints
Free Market
Competition
Liberal Democracy
Progress of Society
Hayek's work composes a system of ideas, fully as
ambitious as the systems of Mill and Marx, but far
less vulnerable to criticism than theirs because it is
grounded on a philosophically defensible view of
the scope and limits of human reason.
John Gray



3. Impact


Hayek and Keynes
Because Keynes believed that he was fundamentally still a
classical English liberal and wasn't quite aware of how far he
had moved away from it. His basic ideas were still those of
individual freedom. He did not think systematically enough to
see the conflicts.
Hayek about Keynes

Hayek argued: Keynes positions too volatile
(after Hayek critiqued Keynes Treatise on Money
(1930) Keynes replied that this did no longer reflect
his thinking)
Hayek did not dare to confront him directly
due to Keynes rhetorical skills The book Hayek never
wrote to his own regret.



Nobel Laureate
With King Adolf 1974 Nobel Prize together
with Gunnar Myrdal:
for their pioneering work in the
theory of money and economic
fluctuations

But the influence of the economist that
mainly matters is an influence over laymen:
politicians, journalists, civil servants and the
public generally.
Hayek in the Nobel laureate speech



Philosophy & Sciences
Karl Popper and Friedrich von Hayek
Interactions with philosophers
like Karl Popper
history of ideas
Contribution to neurobiology
Changed the path of
economics

I think that I have learned more from you than from any other living thinker,
except perhaps Alfred Tarski .. but not even excepting Russell.
Popper in a letter to Hayek, 1944


Consultant of Stakeholders
Together with Ronald Ragan and Dr. strong direct influence
Ed Feulner in the White House
by his books
by direct consulting
but also many adversaries

The most powerful critique of socialist planning
and the socialist state which I read at this time
[the late 1940's], and to which I have returned
so often since [is] F. A. Hayek's The Road to
Serfdom.
Margaret Thatcher



Summing up
outstanding polymath
pure liberal, Anti-Socialist,
and Anti-Protectionist
was compared: Hayek for
20th century like Adam
Smith for the 18th
one of the greatest
thinkers of the 20th cent.
His first book for sell: 8,500 $
www.baumanrarebooks.com


Reading
The Road to Serfdom,
1944
The Constitution of Liberty,
1960
Law, Legislation, and Liberty,
1978
The Fatal Conceit,
1988 Hayek, in my view, is the leading
economic thinker of the 20th century.
Vernon Smith



Further E-Reading
http://mises.org/about/3234
his biography
http://www.iea.org.uk/files/upld
-publication43pdf?.pdf
Road to Serfdom in Reader’s Digest format
http://revver.com/video/10904/
hayeks-the-road-to-serfdom-
in-five-minutes
his book into a little sketch film
http://mises.org/articles.aspx?A
uthorId=126
his papers


Links
www.hayek.de
Gesellschaft
www.hayek-stiftung.de
Friedrich A. von Hayek Stiftung
Friedrich Hayek, who died on March 23, www.hayek-institut.at
1992 at age 92, was arguably the greatest social Friedrich A. von Hayek Institute
scientist of the twentieth century. By the time of http://hayekcenter.org
his death, his fundamental way of thought had American Blog on Hayek
supplanted the system of John Maynard Keynes --
his chief intellectual rival of the century -- in the http://mises.org
Ludwig von Mises Institute
battle since the 1930s for the minds of economists
and the policies of governments. www.freiheit.org
Julian Simon Liberal Institute of FNF



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2009-09-11 FNF PAK - Liberal Thinkers 01 - Hayek

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2009-09-11 FNF PAK - Liberal Thinkers 01 - Hayek