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

Friedrich A. von HayekLiberal Thinkers 01

Olaf KellerhoffResident Representative Pakistan

Friedrich A. von Hayek 10.09.2009Olaf Kellerhoff

Overview

1. Lifelifelong liberal and anti-socialist

2. Workup to highest commitment – winner of Nobel prize

3. Impactinfluenced economic thinking and liberal ideas

Friedrich A. von Hayek


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.

1. Life 2. Work 3. Impact

F.A. Hayek


His studies1918–21 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

1926 married Berta Fritsch, 2 children

1929 Habilitation in Political Economy: private lecturer in Vienna1931 London School of Economics (LSE)

Teaching In LSE



Mont Pelerin Society1938 Conference in Paris: Concept of Neoliberalism

1947 Mont Pelerin Society (MPS)Ludwig von MisesKarl PopperMilton FriedmanFrank Knight

Current President Deepak Lal

immense influence on politics

Hayek – first president of MPS (left)George Stigler called once MPS also “The Friends of F.A. Hayek”



Chicago YearsLeft London for Arkansas 1949 due to mobbing and divorce

1950 Chicago Economic DepartmentFrank KnightMilton FriedmanGeorg 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)

1977 return to Freiburg


I am certain that nothing has done so much to destroy the juridical 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 Seldonand Lord Ralph Harris in London, 1984



2. Work


Prices and Production, 1931University 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 refutedleft 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

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

There is all the difference in the world between treating peopleequally 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:



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, 1976Government 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

Perhaps not most famous, but one of the most important work

Concept of competition as method of discovery


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:


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 ArticlesThe Use of Knowledge in Society, 1945article against planned pricing and planned economy

The Sensory Order, 1952psychological Essay on John Stuart Mill and Harriet Taylor

Why I am not conservativeEssay disparaging conservatism for its inability to adapt to changing realities

The Pretence of Knowledge, 1974Lecture 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

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 neverwrote to his own regret.

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


Nobel Laureate1974 Nobel Prize together with Gunnar Myrdal:

for their pioneering work in the theory of money and economic fluctuations


With King Adolf

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

Interactions with philosophers like Karl Popper

history of ideas

Contribution to neurobiology

Changed the path of economics

Karl Popper and Friedrich von Hayek


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

strong direct influenceby his booksby direct consulting

but also many adversaries

Together with Ronald Ragan and Dr. Ed Feulner in the White House


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 upoutstanding 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/3234his biography

http://www.iea.org.uk/files/upld-publication43pdf?.pdfRoad to Serfdom in Reader’s Digest format

http://revver.com/video/10904/hayeks-the-road-to-serfdom-in-five-minuteshis book into a little sketch film

http://mises.org/articles.aspx?AuthorId=126his papers



Linkswww.hayek.deFriedrich A. von Hayek Gesellschaft

www.hayek-stiftung.deFriedrich A. von Hayek Stiftung

www.hayek-institut.atFriedrich A. von Hayek Institute

http://hayekcenter.orgAmerican Blog on Hayek

http://mises.orgLudwig von Mises Institute

www.freiheit.orgLiberal Institute of FNF


Friedrich Hayek, who died on March 23, 1992 at age 92, was arguably the greatest social scientist of the twentieth century. By the time of his death, his fundamental way of thought had supplanted the system of John Maynard Keynes --his chief intellectual rival of the century -- in the battle since the 1930s for the minds of economists and the policies of governments.

Julian Simon


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

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