Friedrich A. von Hayek

Prof. Dr. H. c. mult. Friedrich August von Hayek (1899-1992)

The HIBS carries Hayek’s name because it is committed to the work of the social philosopher and economist. The dissemination of his most important thoughts is of particular concern to us.

Friedrich A. von Hayek was born in Vienna on 8 May 1899. His father was a doctor as well as a professor of botany. As a doctor, he rose to the presidency of the Society of German Doctors in Vienna. As a botany professor he wrote recognised standard works on the plant geography of Austria. Outstanding scientists, such as the Nobel Prize winner Konrad Lorenz, socialised with the Hayek family.

After the First World War, Friedrich A. von Hayek studied law and political science in his home town. He spent a year studying in the USA, then earned his doctorate in law in Vienna, followed by a doctorate in politics, before habilitating in 1921.

In 1932 Hayek became Professor of Political Economy and Statistics at the London School of Economics (LSE). He moved to London and became a British citizen. After 20 years, starting in 1950, he spent twelve years as a professor of Moral and Social Sciences at the University of Chicago. This is where the epoch-making work “The Constitution of Liberty” (1960) about the foundations of liberal social orders was written.

In 1962 he accepted Walter Eucken’s chair at the University of Freiburg i. Br. In 1968 he took on a professorship at the University of Salzburg before returning to Freiburg in 1977. After his retirement, he completed the trilogy “Law, Legislation and Liberty” (1973, 1976, 1979), which is considered as his most important work.

Even during the war, in 1944, Hayek had taken the initiative to found a “liberal international” – a society in which liberal historians, social scientists and economists would come together to engage in joint action. This is how the legendary and famous “Mont Pèlerin Society” came into being, named after the place above Lake Geneva. Among the first participants were Ludwig von Mises, Walter Eucken, Milton Friedman, Karl E. Popper and Wilhelm Röpke. Later, Ludwig Erhard was included.

Hayek is considered the last polymath of the 20th century and the most important philosopher and economist of freedom. For more than six decades he led the “Austrian School of National Economics”. He was an uncompromising advocate of a classical-liberal economic and social order and wrote almost 50 books, nearly 30 brochures and around 270 scientific papers during his lifetime. His works have been translated into 20 languages. The immense range of his works encompassed economics, biology, sociology, Psychology, Law, History, Political Science, Social Philosophy and Methodology. Hayek’s academic achievements range from his research on capital and business cycle theory, where he was considered a great opponent of Keynes, to the theory of socialism and competitive capitalism, to central questions of legal and political philosophy and the history of ideas.

 

In 1974 he received the Nobel Prize in Economics.

Hayek saw himself committed to the tradition of the Anglo-Saxon philosophy of the Enlightenment (Adam Smith, David Hume); no other thinker has contributed more to the systematic development of classical liberalism (“Grammar of Freedom”).

In his world-renowned book, The Road to Serfdom, he demonstrated to collectivists in all parties that all varieties of collectivism ultimately lead inevitably to the loss of civil rights, individual freedom and prosperity. He was therefore a staunch critic of the excessive, debt-induced welfare state and the state’s abuse of unfunded money creation for the purpose of debt-financing social welfare (electoral gifts).

The impulses of his work still have political and economic consequences worldwide today. Hayek considered state economic stimulus programmes all the more counterproductive because he saw them as the origin of the crisis. He fundamentally rejected thinking in terms of macroeconomic aggregates because this blurs the processes within the statistically bundled variables. Due to the current debt and financial crisis, more and more economists are once again looking to Hayek for guidance.

Summing up his scientific achievements, Hayek said of himself that he had made one discovery and two inventions in his life:

By the so-called inventions that were never implemented at the political level, he meant his model of a bicameral parliamentary system and monetary competition. Of fundamental theoretical importance is Hayek’s discovery of the utilisation of dispersed knowledge and the thereby decisive importance of the price mechanism, which, via the signalling effect of relative prices, is capable of coordinating otherwise unrelated individual decisions and plans and, in the process, of bringing together and utilising only decentrally existing knowledge and of allowing new knowledge (innovations) to emerge again and again.

 

Ludwig Erhard addressed Hayek at the celebration of his 80th birthday, shortly before his death, saying that he had virtually devoured his books; he had set a monument to freedom. Vaclav Klaus, the former prime minister and president of the Czech Republic, describes Hayek as his great role model.