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Tuesday, May 05, 2009

Happy 110th birthday Friedrich Hayek


UPDATE: Steve Horwitz has corrected folks that Hayek's birthday is, in fact, on the 8th of May, not on the 5th. I blame my trust in Ilya Somin. We'll celebrate Hayek's birthday twice this week!

Today marks the 110th birthday of Friedrich A. Hayek, libertarian, Nobel-prize winning economist.

The Volokh conspiracy has a short birthday post up by Ilya Somin. He's focusing on two articles by Hayek that, in his mind, are continuing to be relevant today. The first is "The Use of Knowledge in Society". The second is Hayek's explanation for why he does not consider himself a conservative.

CafeHayek is a bit slow to wish their namesake a happy birthday today, but Russel Roberts does have a wonderful post up that helps explain one of Hayek's key insights:

Civic order in the classical liberal vision is a bottom up emergent order that takes advantage of knowledge that the top down engineering approach misses. This is true in pecuniary activity such as buying and selling but it's also true in non-pecuniary activity--who I want to associate with religiously or in my hobbies or how much time I have for my children or my parents. Freedom doesn't just mean the right to be selfish. It's the right to associate with whom I choose. The classical liberal prescription for the good life isn't about making as much money as possible. It's about the freedom to choose. It's about voluntary rather than coercive solutions, decentralized rather than centralized solutions, bottom-up emergent solutions that are the result of many actions and actors rather than top-down solutions by experts.

In 1974, Hayek received the Nobel Prize in Economics, the first free market economist to receive it. Shortly thereafter in 1975, he met Margaret Thatcher thanks to the Institute of Economic Affairs. After meeting Hayek, Thatcher became a fan. Here's my favourite Thatcher anecdote, as explained by Wikipedia:

During Thatcher's only visit to the Conservative Research Department in the summer of 1975, a speaker had prepared a paper on why the "middle way" was the pragmatic path the Conservative Party should take, avoiding the extremes of left and right. Before he had finished, Thatcher "reached into her briefcase and took out a book. It was Friedrich von Hayek's The Constitution of Liberty. Interrupting our pragmatist, she held the book up for all of us to see. ‘This’, she said sternly, ‘is what we believe’, and banged Hayek down on the table".

Can you picture Brian Mulroney, George W. Bush, or Stephen Harper doing the same? No? Me neither...

Hayek is perhaps best known for his book The Road to Serfdom -- a cautionary tale about how slowly, step-by-step, we move from a free country all the way to socialism, a kind of serfdom. Each step along the way seems reasonable, and who could denounce sensible compromise? For example, if banks are failing, we need to nationalize them! If auto manufacturers are not making money, and are threatening to go bankrupt, why, we'll need to bail them out! All perfectly reasonable, sensible, and ultimately destructive, steps on that road to serfdom paved with good intentions and "temporary" solutions.

Hayek is probably my favourite "economist." I put "economist" in scare quotes for one simple reason -- in my mind, Hayek was first and foremost a philosopher, not an economist. His economic insights are the result of his comprehensive familiarity with the philosophy of science, political philosophy, and philosophy of law (Hayek completed two doctorates, one in law the other in political science. He never received a doctorate in economics). But receiving a Nobel Prize in economics sort of has a way of making everyone think that that's what you are. Still, he's a philosopher in my mind, and it is a great shame that philosophy departments do not spend as much time as they should on Hayek's explicit philosophy of mind, epistemological works, and his political philosophy.

While celebrating Hayek's birthday, why not help boost sales of his books. Glenn Reynolds is picking up on the fact that Obama's presidency is creating a surge in Amazon sales for people like Ayn Rand and Friedrich Hayek. Let's help out a bit, shall we?:

Posted by P.M. Jaworski on May 5, 2009 in Libertarianism | Permalink


"Hayek is probably my favourite 'economist.' I put "economist" in scare quotes for one simple reason -- in my mind, Hayek was first and foremost a philosopher, not an economist."

That can be said about the Austrian School in general.

Great post, Peter.

Posted by: Matthew Johnston | 2009-05-05 12:22:42 PM

It is a good post Peter. In my university days I was taught that economics is a branch of moral philosophy. That being the case I see no contradiction. Adam Smith was a professor of moral philosophy. We can narrow the field but it is still subsumed.

Posted by: DML | 2009-05-06 10:07:46 PM

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