F.A. Hayek would have celebrated his 118th birthday today. When he passed away in 1992, he left behind a prodigious body of work on several discrete issues.
Hayek was the 20th century’s most prominent developer of the Austrian business cycle theory. He extended Mises’s argument about the impossibility of economic calculation under socialism in his classic essay “The Use of Knowledge in Society” and in the papers that were collected into Individualism and Economic Order in 1948.
Hayek was the 20th century’s most prominent developer of the Austrian business cycle theory.”]
As a student, he developed the basis of a cognitive theory, which he revised and published in 1952 in The Sensory Order. He wrote extensively on the method of the social sciences in The Counter-Revolution of Science, also published in 1952 and one of his most important statements on the subject.
Throughout the 1950s and 1960s, he developed a body of social theory about knowledge and competition. These became The Constitution of Liberty (originally published in 1960) and Law, Legislation, and Liberty, released in three volumes during the 1970s. He was awarded the Nobel Prize, which he shared with Gunnar Myrdal, in 1974.
Each of these separate bodies of work would constitute a monumental achievement. Hayek did it all over the course of a single career that established him as one of the most important social thinkers of the 20th century. He was most famous, however, for his 1944 book The Road to Serfdom, a more popular treatment of many of the ideas expressed in Individualism and Economic Order that had a deep and profound effect on the English-speaking world.
Its theme — that statism, socialism, and the erosion of economic liberty meant the erosion of political and civil liberty — was a brilliant exposition of classical liberal ideas and a rank heresy to the established intellectual order. It is through The Road to Serfdom — which was condensed by Reader’s Digest and circulated (in its condensed form) by the Book of the Month Club — that Hayek likely had his biggest effect on public policy.
The Hayekian Tradition
There is a rich and vibrant body of scholarship in the Hayekian tradition — what Peter Boettke calls “mainline” (as opposed to “mainstream”) economics — a tradition that builds on the original insights of Adam Smith and Ludwig von Mises and that would later find application and expression in the work of Nobel laureates Milton Friedman, James Buchanan, Douglass North, Vernon Smith, and Elinor Ostrom. Hayek’s ideas are not the curios of intellectual history. They remain fresh and applicable to a wide array of settings where they are being used today by scholars in several disciplines.
There is a rich and vibrant body of scholarship in the Hayekian tradition.”]
Hayek (and Mises, and many others) was vindicated in a sense by the demise of communism in Eastern Europe and the Soviet Union. Still, his insights have not made full inroads into scholarship and public policy. Liberty and prosperity are hardly the natural outcome of political orders, and they are under constant threat from some who mean well and others who do not.
The world is certainly a better place, though, because F.A. Hayek explored and explained the institutional foundations of a free and prosperous society. For this we should be grateful.