Friedrich Hayek

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We must make the building of a free society once more an intellectual adventure, a deed of courage.

Friedrich August von Hayek CH (8 May 1899 - 23 March 1992) was an Austrian, later British, economist and philosopher most famous for his defense of classical liberalism. In 1974, Hayek shared the Nobel Memorial Prize in Economic Sciences (with Gunnar Myrdal) for his "pioneering work in the theory of money and economic fluctuations and … penetrating analysis of the interdependence of economic, social and institutional phenomena". (Nobel Memorial Prize, 1974)

We shall not grow wiser before we learn that much that we have done was very foolish.

Quotes[edit]

1930s[edit]

  • While the more naive forms of inflationism are sufficiently discredited today not to do much harm in the near future, contemporary economic thought is so much permeated by an inflationism of a subtler kind that it is to be feared that for some time we shall still have to endure the consequences of a good deal of dangerous tampering with currency and credit.
    • Preface of the First Edition of Prices and Production (1931).
  • The attack on economics sprang rather from a dislike of the application of scientific methods to the investigation of social problems. The existence of a body of reasoning which prevented people from following their first impulsive reactions, and which compelled them to balance indirect effects, which could be seen only by exercising the intellect, against intense feeling caused by the direct observation of concrete suffering, then as now, occasioned intense resentment.
    • "The Trend of Economic Thinking", lecture delivered at LSE on March 1, 1933, published in Economica (May 1933).
  • I am certain that there are many who regard with impatience and distrust the whole tendency, which is inherent in all modern equilibrium analysis, to turn economics into a branch of pure logic, … are subject to no other test but internal consistency. But it seems that, if only this process is carried far enough, it carries its own remedy with it. In distilling from our reasoning about the facts of economic life those parts which are truly a priori, we not only isolate one element of our reasoning as a sort of Pure Logic of Choice in all its purity but we also isolate, and emphasize the importance of, another element which has been too much neglected. My criticism of the recent tendencies to make economic theory more and more formal is not that they have gone too far but that they have not yet been carried far enough to complete the isolation of this branch of logic and to restore to its rightful place the investigation of causal processes, using formal economic theory as a tool in the same way as mathematics.
    • "Economics and Knowledge" (1937).

1940s[edit]

There is all the difference in the world between treating people equally and attempting to make them equal.
  • Many of the greatest things man has achieved are not the result of consciously directed thought, and still less the product of a deliberately coordinated effort of many individuals, but of a process in which the individual plays a part which he can never fully understand.
    • Scientism and The Study of Society (1944), p. 67; later published in The Counter-revolution of Science.
  • 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.'
    • "Individualism: True and False" (1945); later published in Individualism and Economic Order (1948), p. 16.
  • We must face the fact that the preservation of individual freedom is incompatible with a full satisfaction of our views of distributive justice.
    • "Individualism: True and False" (1945); later published in Individualism and Economic Order (1948), p. 22.
  • The part of our social order which can or ought to be made a conscious product of human reason is only a small part of all the forces of society.
    • "Individualism: True and False" (1945).
  • It would clearly not be an improvement to build all houses exactly alike in order to create a perfect market for houses, and the same is true of most other fields where differences between the individual products prevent competition from ever being perfect.
    • "The Meaning of Competition" (1946), p. 99.
  • It will by the way be of interest to you that the main goal of my America trip was an attempt to arrange in Chicago a larger study about the question as to what changes are necessary in the “legal framework” in order to make the competitive economy effective. Unfortunately the man on whom my plans were mostly centered, Henry Simons, died suddenly and I do not know yet if the project can be continued despite that. The idea was a positive complement to my book.
    • Letter to Walter Eucken from November 3, 1946, in F. A. Hayek Archives, Box 18/Folder 40, Hoover Institution Archives, Stanford University.
  • 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.
    • "'Free' Enterprise and Competitive Order" (1947); later published in Individualism and Economic Order (1948), p. 113-114.
  • Socialism has never and nowhere been at first a working-class movement. It is by no means an obvious remedy for the obvious evil which the interests of that class will necessarily demand. It is a construction of theorists, deriving from certain tendencies of abstract thought with which for a long time only the intellectuals were familiar; and it required long efforts by the intellectuals before the working classes could be persuaded to adopt it as their program.

The Road to Serfdom (1944)[edit]

Conservatism, though a necessary element in any stable society, is not a social program; in its paternalistic, nationalistic and power adoring tendencies it is often closer to socialism than true liberalism…
Is there a greater tragedy imaginable than that, in our endeavour consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?
The conception that government should be guided by majority opinion makes sense only if that opinion is independent of government.
The power which a multiple millionaire, who may be my neighbour and perhaps my employer, has over me is very much less than that which the smallest functionaire possesses who wields the coercive power of the state, and on whose discretion it depends whether and how I am to be allowed to live or to work.
The need is for an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others.
We shall all be the gainers if we can create a world fit for small states to live in.
We are neither entitled to be unselfish at someone else's expense nor is there any merit in being unselfish if we have no choice.
  • Conservatism, though a necessary element in any stable society, is not a social program; in its paternalistic, nationalistic and power adoring tendencies it is often closer to socialism than true liberalism; and with its traditionalistic, anti-intellectual, and often mystical propensities it will never, except in short periods of disillusionment, appeal to the young and all those others who believe that some changes are desirable if this world is to become a better place.
    • p. xi.
  • Is there a greater tragedy imaginable than that, in our endeavour consciously to shape our future in accordance with high ideals, we should in fact unwittingly produce the very opposite of what we have been striving for?
  • That democratic socialism, the great utopia of the last few generations, is not only unachievable, but that to strive for it produces something so utterly different that few of those who wish it would be prepared to accept the consequences, many will not believe until the connection has been laid bare in all its aspects.
    • p. 23.
  • The effect of the people's agreeing that there must be central planning, without agreeing on the ends, will be rather as if a group of people were to commit themselves to take a journey together without agreeing where they want to go; with the result that they may all have to make a journey which most of them do not want at all.
    • p. 46.
  • Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends. And whoever has sole control of the means must also determine which ends are to be served, which values are to be rated higher and which lower, in short, what men should believe and strive for.
    • p. 68-69.
  • There is nothing in the basic principles of liberalism to make it a stationary creed; there are no hard-and-fast rules fixed once and for all. … Probably nothing has done so much harm to the liberal cause as the wooden insistence of some liberals on certain rules of thumb, above all the principle of laissez faire.
    • Reprinted in The Road to Serfdom: Text and Documents (University Chicago Press, 2007, ISBN 0-226-32055-3), p. 71.
  • The conception that government should be guided by majority opinion makes sense only if that opinion is independent of government. The ideal of democracy rests on the belief that the view which will direct government emerges from an independent and spontaneous process. It requires, therefore, the existence of a large sphere independent of majority control in which the opinions of the individuals are formed.
  • From the saintly and single-minded idealist to the fanatic is often but a step.
    • p. 99.
  • The power which a multiple millionaire, who may be my neighbour and perhaps my employer, has over me is very much less than that which the smallest functionaire possesses who wields the coercive power of the state, and on whose discretion it depends whether and how I am to be allowed to live or to work.
    • p. 104.
  • The first need is to free ourselves of that worst form of contemporary obscurantism which tries to persuade us that what we have done in the recent past was all either wise or unavoidable. We shall not grow wiser before we learn that much that we have done was very foolish.
    • p. 246.
  • Where the sole employer is the State, opposition means death by slow starvation.
    • Hayek quotes from Leon Trotsky, The Revolution Betrayed (1936).
  • To be controlled in our economic pursuits means to be always controlled unless we declare our specific purpose. Or, since when we declare our specific purpose we shall also have to get it approved, we should really controlled in everything.
    • Chapter 7. Economic Control and Totalitarianism.
  • There is, in a competitive society, nobody who can exercise even a fraction of the power which a socialist planning board would possess.
    • Chapter 10. Why The Worst Get On Top
  • In no other field has the world yet paid so dearly for the abandonment of nineteenth-century liberalism as in the field where the retreat began: in international relations. Yet only a small part of the lesson which experience ought to have taught us has been learned.
    Perhaps even more than elsewhere current notions of what is desirable and practicable are here still of a kind which may well produce the opposite of what they promise.
    • Chapter 15. The Prospects of International Order.
  • That there is little hope of international order or lasting peace so long as every country is free to employ whatever measures it thinks desirable in its own immediate interest, however damaging they may be to others, needs little emphasis now.
    • Chapter 15. The Prospects of International Order.
  • It is neither necessary nor desirable that national boundaries should mark sharp differences in standards of living, that membership of a national group should entitle to a share in a cake altogether different from that in which members of other groups share.
    • Chapter 15. The Prospects of International Order.
  • If the resources of different nations are treated as exclusive properties of these nations as wholes, if international economic relations, instead of being relations between individuals, become increasingly relations between whole nations organized as trading bodies, they inevitably become the source of friction and envy between whole nations.
    It is one of the most fatal illusions that, by substituting negotiations between states or organized groups for competition for markets or for raw materials, international friction would be reduced. This would merely put a contest of force in the place of what can only metaphorically be called the "struggle" of competition and would transfer to powerful and armed states, subject to no superior law, the rivalries which between individuals had to be decided without recourse to force.
    Economic transactions between national bodies who are at the same time the supreme judges of their own behavior, who bow to no superior law, and whose representatives cannot be bound by any considerations but the immediate interest of their respective nations, must end in clashes of power.
    • Chapter 15. The Prospects of International Order.
  • If we were to make no better use of victory than to countenance existing trends in this direction, only too visible before 1939, we might indeed find that we have defeated National Socialism merely to create a world of many national socialisms, differing in detail, but all equally totalitarian, nationalistic, and in recurrent conflict with each other.
    The Germans would appear as the disturbers of peace, as they already do to some people, merely because they were the first to take the path along which all the others were ultimately to follow.
    • Chapter 15. The Prospects of International Order.
  • The problems raised by a conscious direction of economic affairs on a national scale inevitably assume even greater dimensions when the same is attempted internationally. The conflict between planning and freedom cannot but become more serious as the similarity of standards and values among those submitted to a unitary plan diminishes.
    • Chapter 15. The Prospects of International Order.
  • Who imagines that there exist any common ideals of distributive justice such as will make the Norwegian fisherman consent to forego the prospect of economic improvement in order to help his Portuguese fellow, or the Dutch worker to pay more for his bicycle to help the Coventry mechanic, or the French peasant to pay more taxes to assist the industrialization of Italy? If most people are not willing to see the difficulty, this is mainly because, consciously or unconsciously, they assume that it will be they who will settle these questions for the others, and because they are convinced of their own capacity to do this justly and equitably.
    • Chapter 15. The Prospects of International Order.
  • To undertake the direction of the economic life of people with widely divergent ideals and values is to assume responsibilities which commit one to the use of force; it is to assume a position where the best intentions cannot prevent one from being forced to act in a way which to some of those affected must appear highly immoral. This is true even if we assume the dominant power to be as idealistic and unselfish as we can possibly conceive. But how small is the likelihood that it will be unselfish, and how great are the temptations!
    • Chapter 15. The Prospects of International Order.
  • What we need and can hope to achieve is not more power in the hands of irresponsible international economic authorities but, on the contrary, a superior political power which can hold the economic interests in check, and in the conflict between them can truly hold the scales, because it is itself not mixed up in the economic game. The need is for an international political authority which, without power to direct the different people what they must do, must be able to restrain them from action which will damage others. The powers which must devolve on an international authority are not the new powers assumed by the states in recent times but that minimum of powers without which it is impossible to preserve peaceful relationships, i.e., essentially the powers of the ultra-liberal "laissez faire" state.
    • Chapter 15. The Prospects of International Order.
  • It is no accident that on the whole there was more beauty and decency to be found in the life of the small peoples, and that among the large ones there was more happiness and content in proportion as they had avoided the deadly blight of centralization.
    Least of all shall we preserve democracy or foster its growth if all the power and most of the important decisions rest with an organization far too big for the common man to survey or comprehend.
    Nowhere has democracy ever worked well without a great measure of local self-government, providing a school of political training for the people at large as much as for their future leaders.
    • Chapter 15. The Prospects of International Order.
  • As is true with respect to other great evils, the measures by which war might be made altogether impossible for the future may well be worse than even war itself.
    If we can reduce the risk of friction likely to lead to war, this is probably all we can reasonably hope to achieve.
    • Chapter 15. The Prospects of International Order
  • The most effective way of making people accept the validity of the values they are to serve is to persuade them that they are really the same as those which they, or at least the best among them, have always held, but which were not properly understood or recognized before. The people are made to transfer their allegiance from the old gods to the new under the pretense that the new gods really are what their sound instinct had always told them but what before they had only dimly seen. And the most efficient technique to this end is to use the old words but change their meaning. Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as the complete perversion of language, the change of meaning of the words by which the ideals of the new regimes are expressed.… If one has not oneself experienced this process, it is difficult to appreciate the magnitude of this change of the meaning of words, the confusion it causes, and the barriers to any rational discussion which it creates. It has to be seen to be understood how, if one of two brothers embraces the new faith, after a short while he appears to speak a different language which makes any real communication between them impossible. And the confusion becomes worse because this change of meaning of words describing political ideals is not a single event but a continuous process, a technique employed consciously or unconsciously to direct the people. Gradually, as this process continues, the whole language becomes despoiled, and words become empty shells deprived of any definite meaning, as capable of denoting one thing as its opposite and used solely for the emotional associations which still adhere to them.
    • Chapter 11. The End of Truth
  • Even the striving for equality by means of a directed economy can result only in an officially enforced inequality — an authoritarian determination of the status of each individual in the new hierarchical order.
    • Chapter 11. The End of Truth
  • The more the state "plans" the more difficult planning becomes for the individual.
    • Chapter 6. Planning and the Rule of Law.
  • What our generation has forgotten is that the system of private property is the most important guarantee of freedom, not only for those who own property, but scarcely less for those who do not. It is only because the control of the means of production is divided among many people acting independently that nobody has complete power over us, that we as individuals can decide what to do with ourselves.
    • Chapter 7. Economic Control and Totalitarianism.
  • We shall never prevent the abuse of power if we are not prepared to limit power in a way which occasionally may prevent its use for desirable purposes.
    • Chapter 15. The Prospects of International Order.
  • We shall all be the gainers if we can create a world fit for small states to live in.
    • Chapter 15. The Prospects of International Order.
  • Only where we ourselves are responsible for our own interests and are free to sacrifice them has our decision moral value. We are neither entitled to be unselfish at someone else's expense nor is there any merit in being unselfish if we have no choice. The members of a society who in all respects are made to do the good thing have no title to praise.
    • Chapter 14. Material Conditions and Ideal Ends.
  • Though we neither can wish nor possess the power to go back to the reality of the nineteenth century, we have the opportunity to realize its ideals — and they were not mean. We have little right to feel in this respect superior to our grandfathers; and we should never forget that it is we, the twentieth century, and not they, who have made a mess of things. If they had not yet fully learned what was necessary to create the world they wanted, the experience we have since gained ought to have equipped us better for the task. If in the first attempt to create a world of free men we have failed, we must try again. The guiding principle that a policy of freedom for the individual is the only truly progressive policy remains as true today as it was in the nineteenth century.
    • Conclusion.

The Use of Knowledge in Society (1945)[edit]

First published in American Economic Review (September 1945) · Full text online
  • The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the circumstances of which we must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources — if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
    This character of the fundamental problem has, I am afraid, been rather obscured than illuminated by many of the recent refinements of economic theory, particularly by many of the uses made of mathematics.
    • I.
  • This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.
    • II.
  • In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.
    • VI

1950s[edit]

The Counter-Revolution of Science : Studies on the Abuse of Reason (1952)[edit]

It is only insofar as some sort of order arises as a result of individual action but without being designed by any individual that a problem is raised which demands a theoretical explanation.
At first everyone will seek for himself what seems to him the best path. But the fact that such a path has been used once is likely to make it easier to traverse and therefore more likely to be used again; and thus gradually more and more clearly defined tracks arise and come to be used to the exclusion of other possible ways.
It may indeed prove to be far the most difficult and not the least important task for human reason rationally to comprehend its own limitations.
It is essential for the growth of reason that as individuals we should bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depend.
  • While the method of the natural sciences is … analytic, the method of the social sciences is better described as compositive or synthetic. It is the so-called wholes, the groups of elements which are structurally connected, which we learn to single out from the totality of observed phenomena … Insofar as we analyze individual thought in the social sciences the purpose is not to explain that thought, but merely to distinguish the possible types of elements with which we shall have to reckon in the construction of different patterns of social relationships. It is a mistake … to believe that their aim is to explain conscious action. … The problems which they try to answer arise only insofar as the conscious action of many men produce undesigned results … If social phenomena showed no order except insofar as they were consciously designed, there would indeed be no room for theoretical sciences of society and there would be, as is often argued, only problems of psychology. It is only insofar as some sort of order arises as a result of individual action but without being designed by any individual that a problem is raised which demands a theoretical explanation … people dominated by the scientistic prejudice are often inclined to deny the existence of any such order … it can be shown briefly and without any technical apparatus how the independent actions of individuals will produce an order which is no part of their intentions … The way in which footpaths are formed in a wild broken country is such an instance. At first everyone will seek for himself what seems to him the best path. But the fact that such a path has been used once is likely to make it easier to traverse and therefore more likely to be used again; and thus gradually more and more clearly defined tracks arise and come to be used to the exclusion of other possible ways. Human movements through the region come to conform to a definite pattern which, although the result of deliberate decision of many people, has yet not be consciously designed by anyone.
    • "The Individualist and Compositive Method".
  • Even more significant of the inherent weakness of the collectivist theories is the extraordinary paradox that from the assertion that society is in some sense more than merely the aggregate of all individuals their adherents regularly pass by a sort of intellectual somersault to the thesis that in order that the coherence of this larger entity be safeguarded it must be subjected to conscious control, that is, to the control of what in the last resort must be an individual mind. It thus comes about that in practice it is regularly the theoretical collectivist who extols individual reason and demands that all forces of society be made subject to the direction of a single mastermind, while it is the individualist who recognizes the limitations of the powers of individual reason and consequently advocates freedom as a means for the fullest development of the powers of the interindividual process.
    • "Purpositive" Social Formations.
  • It may indeed prove to be far the most difficult and not the least important task for human reason rationally to comprehend its own limitations. It is essential for the growth of reason that as individuals we should bow to forces and obey principles which we cannot hope fully to understand, yet on which the advance and even the preservation of civilization depend. Historically this has been achieved by the influence of the various religious creeds and by traditions and superstitions which made men submit to those forces by an appeal to his emotions rather than to his reason. The most dangerous stage in the growth of civilization may well be that in which man has come to regard all these beliefs as superstitions and refuses to accept or to submit to anything which he does not rationally understand. The rationalist whose reason is not sufficient to teach him those limitations of the powers of conscious reason, and who despises all the institutions and customs which have not been consciously designed, would thus become the destroyer of the civilization built upon them. This may well prove a hurdle which man will repeatedly reach, only to be thrown back into barbarism … Common acceptance of formal rules is indeed the only alternative to direction by a single will man has yet discovered.
    • "'Conscious Direction and the Growth of Reason".
  • The discussions of every age are filled with the issues on which its leading schools of thought differ. But the general intellectual atmosphere of the time is always determined by the views on which the opposing schools agree. They become the unspoken presuppositions of all thought, and common and unquestioningly accepted foundations on which all discussion proceeds.
    • About Comte and Hegel.

1960s[edit]

Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds, the prospects of freedom are indeed dark.
  • [Apartheid law in South Africa] appears to be a clear and even extreme instance of that discrimination between different individuals which seems to me to be incompatible with the reign of liberty. The essence of what I said [in The Constitution of Liberty] was really the fact that the laws under which government can use coercion are equal for all responsible adult members of that society. Any kind of discrimination — be it on grounds of religion, political opinion, race, or whatever it is — seems to be incompatible with the idea of freedom under the law. Experience has shown that separate never is equal and cannot be equal.
    • "Conversation with Systematic Liberalism," Forum (September 1961).
  • [The task of economic theory is] to explain how an overall order of economic activity was achieved which utilized a large amount of knowledge which was not concentrated in any one mind but existed only as the separate knowledge of different individuals. But it was still a long way from this to an adequate insight into the relations between the abstract rules which the individual follows in his actions and the abstract overall order which is [thereby] formed....It was only through a reexamination of the age-old concept of freedom under the law, the basic conception of traditional liberalism, and of the problems of the philosophy of the law which this raises, that I have reached a tolerably clear picture of the nature of the spontaneous order of which liberal economists have so long been talking.
    • "Kinds of Rationalism", A lecture delivered on April 27, 1964, at Rikkyo University, Tokyo, and published in The Economic Studies Quarterly, Tokyo, vol. 15, March 1965
  • We must make the building of a free society once more an intellectual adventure, a deed of courage. What we lack is a liberal Utopia, a programme which seems neither a mere defence of things as they are nor a diluted kind of socialism, but a truly liberal radicalism which does not spare the susceptibilities of the mighty (including the trade unions), which is not too severely practical and which does not confine itself to what appears today as politically possible…Those who have concerned themselves exclusively with what seemed practicable in the existing state of opinion have constantly found that even this has rapidly become politically impossible as the result of changes in a public opinion which they have done nothing to guide. Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds, the prospects of freedom are indeed dark. But if we can regain that belief in power of ideas which was the mark of liberalism at its best, the battle is not lost.
    • Studies in Philosophy, Politics and Economics (1967).
  • If the human intellect is allowed to impose a preconceived pattern on society, if our powers of reasoning are allowed to lay claim to a monopoly of creative effort… then we must not be surprised if society, as such, ceases to function as a creative force.
    • Studies in Philosophy, Politics and Economics (1967).

The Constitution of Liberty (1960)[edit]

Our faith in freedom does not rest on the foreseeable results in particular circumstances, but on the belief that it will, on balance, release more forces for the good than for the bad.
All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well as the wisest.
It is indeed probable that more harm and misery have been caused by men determined to use coercion to stamp out a moral evil than by men intent on doing evil.
If we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.
A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom.
  • No human mind can comprehend all the knowledge which guides the actions of society.
    • p. 4.
  • What a free society offers to the individual is much more than what he would be able to do if only he were free.
    • p. 6.
  • The whole conception of man already endowed with a mind capable of conceiving civilization setting out to create it is fundamentally false. Man did not simply impose upon the world a pattern created by his mind. His mind is itself a system that constantly changes as a result of his endeavor to adapt himself to his surroundings. It would be an error to believe that, to achieve a higher civilization, we have merely to put into affect the ideas now guiding us. If we are to advance, we must leave room for a continuous revision of our present conceptions and ideals which will be necessitated by further experience. … The conception of man deliberately building his civilization stems from an erroneous intellectualism that regards human reason as something standing outside nature and possessed of knowledge and reasoning capacity independent of experience. But the growth of the human mind is part of the growth of civilization; it is the state of civilization at any given moment that determines the scope and possibilities of human ends and values. The mind can never foresee its own advance.
    • Part I : The Value of Freedom, Ch. 2 : The Creative Power of a Free Civilization
    • The last sentence has sometimes been paraphrased as: The mind cannot foresee its own advance.
  • Our faith in freedom does not rest on the foreseeable results in particular circumstances, but on the belief that it will, on balance, release more forces for the good than for the bad … Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.
  • Perhaps the fact that we have seen millions voting themselves into complete dependence on a tyrant has made our generation understand that to choose one's government is not necessarily to secure freedom.
  • The Socratic maxim that the recognition of our ignorance is the beginning of wisdom has profound significance for our understanding of society. Most of the advantages of social life, especially in the more advanced forms that we call 'civilization' rest on the fact that the individual benefits from more knowledge than he is aware of. It might be said that civilization begins when the individual in the pursuit of his ends can make use of more knowledge than he has himself acquired and when he can transcend the boundaries of his ignorance by profiting from knowledge he does not himself possess.
    • p. 22.
  • It is largely because civilization enables us constantly to profit from knowledge which we individually do not possess and because each individual's use of his particular knowledge may serve to assist others unknown to him in achieving their ends that men as members of civilized society can pursue their individual ends so much more successfully than they could alone.
  • If we are to understand how society works, we must attempt to define the general nature and range of our ignorance concerning it.
    • p. 23, Chapter 2.
  • Ever since the beginning of modern science, the best minds have recognized that "the range of acknowledged ignorance will grow with the advance of science." "In science the more we know, the more extensive the contact with nescience." Unfortunately, the popular effect of this scientific advance has been a belief, seemingly shared by many scientists, that the range of our ignorance is steadily diminishing and that we can therefore aim at more comprehensive and deliberate control of all human activities. It is for this reason that those intoxicated by the advance of knowledge so often become the enemies of freedom … The more men know, the smaller the share of all that knowledge becomes that any one mind can absorb. The more civilized we become, the more relatively ignorant must each individual be of the facts on which the working of his civilization depends.
    • p. 26.
  • The case for individual freedom rests chiefly on the recognition of the inevitable and universal ignorance of all of us concerning a great many of the factors on which the achievement of our ends and welfare depend. It is because every individual knows so little and, in particular, because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.
    Humiliating to human pride as it may be, we must recognize that the advance and even the preservation of civilization are dependent upon a maximum of opportunity for accidents to happen. These accidents occur in the combination of knowledge and attitudes, skills and habits, acquired by individual men and also when qualified men are confronted with the particular circumstances which they are equipped to deal with. Our necessary ignorance of so much means that we have to deal largely with probabilities and chances.
    Of course, it is true of social as of individual life that favorable accidents usually do not just happen. We must prepare for them.
    • p. 29.
  • All political theories assume, of course, that most individuals are very ignorant. Those who plead for liberty differ from the rest in that they include among the ignorant themselves as well as the wisest.
    • p. 30.
  • Liberty is an opportunity for doing good, but this is only so when it is also an opportunity for doing wrong.
    • p. 142
  • The argument for liberty is not an argument against organization, which is one of the most powerful tools human reason can employ, but an argument against all exclusive, privileged, monopolistic organization, against the use of coercion to prevent others from doing better.
    • p. 37.
  • Human reason can neither predict nor deliberately shape its own future. Its advances consist in finding out where it has been wrong.
    • p. 41.
  • Before we can try to remould society intelligently, we must understand its functioning; we must realise that, even when we believe that we understand it, we may be mistaken. What we must learn to understand is that human civilisation has a life of its own, that all our efforts to improve things must operate within a working whole which we cannot entirely control, and the operation of whose forces we can hope merely to facilitate and assist so far as we can understand them.
    • p. 69-70: Chapter 4.
  • A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom.
    • p. 79.
  • We certainly do not regard it as right that the citizens of a large country should dominate those of a small adjoining country merely because they are more numerous.
    • p. 92.
  • However human, envy is certainly not one of the sources of discontent that a free society can eliminate. It is probably one of the essential conditions for the preservation of such a society that we do not countenance envy, not sanction its demands by camouflaging it as social justice, but treat it, in the words of John Stuart Mill, as "the most anti-social and evil of all passions.
    • p. 93.
  • It is when it is contended that "in a democracy right is what the majority makes it to be" that democracy degenerates into demagoguery.
    • p. 94.
  • Justice, like liberty and coercion, is a concept which, for the sake of clarity, ought to be confined to the deliberate treatment of men by other men.
    • p. 99.
  • Liberalism is a doctrine about what the law ought to be, democracy a doctrine about the manner of determining the law. Liberalism regards it as desirable that only what the majority accepts should in fact be law, but it does not believe that this is therefore necessarily good law. Its aim, indeed, is to persuade the majority to observe certain principles. It accepts majority rule as a method of deciding, but not as an authority for what the decision ought to be. To the doctrinaire democrat the fact that the majority wants something is sufficient ground for regarding it as good; for him the will of the majority determines not only what is law but what is good law.
    • p. 103-104.
  • If democracy is a means rather than an end, its limits must be determined in the light of the purpose we want it to serve.
    • p. 107.
  • Whenever it is necessary that one of several conflicting opinions should prevail and when one would have to be made to prevail by force if need be, it is less wasteful to determine which has the stronger support by counting numbers than by fighting.
    • p. 107.
  • The successful politician owes his power to the fact that he moves within the accepted framework of thought, that he thinks and talks conventionally. It would be almost a contradiction in terms for a politician to be a leader in the field of ideas. His task in a democracy is to find out what the opinions held by the largest number are, not to give currency to new opinions which may become the majority view in some distant future.
    • p. 112.
  • Once wide coercive powers are given to governmental agencies for particular purposes, such powers cannot be effectively controlled by democratic assemblies.
    • p. 116.
  • It is indeed probable that more harm and misery have been caused by men determined to use coercion to stamp out a moral evil than by men intent on doing evil.
    • p. 146.
  • The day may not be far off when authority, by adding appropriate drugs to our water supply or by some other similar device, will be able to elate or depress, stimulate or paralyze, the minds of whole populations for its own purposes.
    • p. 216.
  • The chief evil is unlimited government, and nobody is qualified to wield unlimited power.
    • p. 225-226.
  • It would scarcely be an exaggeration to say that the greatest danger to liberty today comes from the men who are most needed and most powerful in modern government, namely, the efficient expert administrators exclusively concerned with what they regards as the public good.
    • p. 262.
  • If this is the degree of inflation planned for in advance, the real outcome is indeed likely to be such that most of those who will retire at the end of the century will be dependent on the charity of the younger generation. And ultimately not morals but the fact that the young supply the police and the army will decide the issue: concentration camps for the aged unable to maintain themselves are likely to be the fate of an old generation whose income is entirely dependent on coercing the young.
    • p. 297.
  • Inflation is probably the most important single factor in that vicious circle wherein one kind of government action makes more and more government control necessary. For this reason all those who wish to stop the drift toward increasing government control should concentrate their effort on monetary policy.
    • p. 338-339.
  • To rest the case for equal treatment of national or racial minorities on the assumption that they do not differ from other men is implicitly to admit that factual inequality would justify unequal treatment, and the proof that some differences do, in fact, exist would not be long in forthcoming. It is of the essence of the demand for equality before the law that people should be treated alike in spite of the fact that they are different.
  • The great aim of the struggle for liberty has been equality before the law.
  • Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions … Liberty and responsibility are inseparable.
  • If one objects to the use of coercion in order to bring about a more even or more just distribution, this does not mean that one does not regard these as desirable. But if we wish to preserve a free society, it is essential that we recognize that the desirability of a particular object is not sufficient justification for the use of coercion.
  • Compared with the totality of knowledge which is continually utilized in the evolution of a dynamic civilization, the difference between the knowledge that the wisest and that which the most ignorant individual can deliberately employ is comparatively insignificant.
    • Chapter 2. The Creative Powers of a Free Civilization.
  • Every change in conditions will make necessary some change in the use of resources, in the direction and kind of human activities, in habits and practices. And each change in the actions of those affected in the first instance will require further adjustments that will gradually extend through the whole of society. Every change thus in a sense creates a "problem" for society, even though no single individual perceives it as such; it is gradually "solved" by the establishment of a new overall adjustment.
    • Chapter 2. The Creative Powers of a Free Civilization.
  • All that we can know is that the ultimate decision about what is good or bad will be made not by individual human wisdom but by the decline of the groups that have adhered to the “wrong” beliefs.
    • Chapter 2. The Creative Powers of a Free Civilization.
  • Equality of the general rules of law and conduct, however, is the only kind of equality conducive to liberty and the only equality which we can secure without destroying liberty. Not only has liberty nothing to do with any other sort of equality, but it is even bound to produce inequality in many respects. This is the necessary result and part of the justification of individual liberty: If the result of individual liberty did not demonstrate that some manners of living are more successful than others, much of the case for it would vanish.
    • Chapter 6. Equality, Value, and Merit.
  • From the fact that people are very different it follows that, if we treat them equally, the result must be inequality in their actual position, and that the only way to place them in an equal position would be to treat them differently. Equality before the law and material equality are therefore not only different but are in conflict which each other; and we can achieve either one or the other, but not both at the same time.
    • Chapter 6. Equality, Value, and Merit.
  • Whenever it is necessary that one of several conflicting opinions should prevail and when one would have to be made to prevail by force if need be, it is less wasteful to determine which has the stronger support by counting numbers than by fighting. Democracy is the only method of peaceful change that man has yet been discovered.
    • Chapter 7. Majority Rule.
  • It is only because the majority opinion will always be opposed by some that our knowledge and understanding progress. In the process by which opinion is formed, it is very probable that, by the time any view becomes a majority view, it is no longer the best view: somebody will already have advanced beyond the point which the majority have reached. It is because we do not yet which of the many competing new opinions will prove itself the best that we wait until it has gained sufficient support.
    • Chapter 7. Majority Rule.
  • It is always from a minority acting in ways different from what the majority would prescribe that the majority in the end learns to do better.
    • Chapter 7. Majority Rule.
  • The conception of freedom under the law that is the chief concern of this book rests on the contention that when we obey laws, in the sense of general abstract rules laid down irrespective of their application to us, we are not subject to another man’s will and are therefore free. It is because the lawgiver does not know the particular cases to which his rules will apply, and it is because the judge who applies them has no choice in drawing the conclusions that follow from the existing body of rules and the particular facts of the case, that it can be said that laws and not men rule. Because the rule is laid down in ignorance of the particular case and no man’s will decides the coercion used to enforce it, the law is not arbitrary.
    • Chapter 10. Law, Commands, and Order.
  • It used to be the boast of free men that, so long as they kept within the bounds of the known law, there was no need to ask anybody's permission or to obey anybody's orders. It is doubtful whether any of us can make this claim today.
    • Chapter 14. The Safeguards of Individual Liberty.
  • The real reason why all the assurances that progression would remain moderate have proved false and why its development has gone far beyond the most pessimistic prognostications of its opponents is that all arguments in support of progression can be used to justify any degree of progression. Its advocates may realize that beyond a certain point the adverse effects on the efficiency of the economic system may become so serious as to make it inexpedient to push it any further. But the argument based on the presumed justice of progression provides no limitation, as has often been admitted by its supporters, before all incomes above a certain figure are confiscated, and those below left untaxed. Unlike proportionality, progression provides no principle which tells us what the relative burden of different persons ought to be.
    • Chapter 20. Taxation and Redistribution.

Why I Am Not a Conservative (1960)[edit]

"Why I Am Not a Conservative" in The Constitution of Liberty (1960)
At a time when most movements that are thought to be progressive advocate further encroachments on individual liberty, those who cherish freedom are likely to expend their energies in opposition.
What the liberal must ask, first of all, is not how fast or how far we should move, but where we should move.
The main point about liberalism is that it wants to go elsewhere, not to stand still.
In general, it can probably be said that the conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes.
The liberal, of course, does not deny that there are some superior people — he is not an egalitarian — but he denies that anyone has authority to decide who these superior people are.
It is not who governs but what government is entitled to do that seems to me the essential problem.
  • At a time when most movements that are thought to be progressive advocate further encroachments on individual liberty, those who cherish freedom are likely to expend their energies in opposition. In this they find themselves much of the time on the same side as those who habitually resist change.
  • Conservatism proper is a legitimate, probably necessary, and certainly widespread attitude of opposition to drastic change. It has, since the French Revolution, for a century and a half played an important role in European politics. Until the rise of socialism its opposite was liberalism. There is nothing corresponding to this conflict in the history of the United States, because what in Europe was called "liberalism" was here the common tradition on which the American polity had been built: thus the defender of the American tradition was a liberal in the European sense. This already existing confusion was made worse by the recent attempt to transplant to America the European type of conservatism, which, being alien to the American tradition, has acquired a somewhat odd character. And some time before this, American radicals and socialists began calling themselves "liberals." I will nevertheless continue for the moment to describe as liberal the position which I hold and which I believe differs as much from true conservatism as from socialism.
  • Let me now state what seems to me the decisive objection to any conservatism which deserves to be called such. It is that by its very nature it cannot offer an alternative to the direction in which we are moving. It may succeed by its resistance to current tendencies in slowing down undesirable developments, but, since it does not indicate another direction, it cannot prevent their continuance. It has, for this reason, invariably been the fate of conservatism to be dragged along a path not of its own choosing. The tug of war between conservatives and progressives can only affect the speed, not the direction, of contemporary developments.
  • What the liberal must ask, first of all, is not how fast or how far we should move, but where we should move. In fact, he differs much more from the collectivist radical of today than does the conservative. While the last generally holds merely a mild and moderate version of the prejudices of his time, the liberal today must more positively oppose some of the basic conceptions which most conservatives share with the socialists.
  • The picture generally given of the relative position of the three parties does more to obscure than to elucidate their true relations. They are usually represented as different positions on a line, with the socialists on the left, the conservatives on the right, and the liberals somewhere in the middle. Nothing could be more misleading. If we want a diagram, it would be more appropriate to arrange them in a triangle with the conservatives occupying one corner, with the socialists pulling toward the second and the liberals toward the third.
  • The main point about liberalism is that it wants to go elsewhere, not to stand still. Though today the contrary impression may sometimes be caused by the fact that there was a time when liberalism was more widely accepted and some of its objectives closer to being achieved, it has never been a backward-looking doctrine. There has never been a time when liberal ideals were fully realized and when liberalism did not look forward to further improvement of institutions. Liberalism is not averse to evolution and change; and where spontaneous change has been smothered by government control, it wants a great deal of change of policy.
  • As has often been acknowledged by conservative writers, one of the fundamental traits of the conservative attitude is a fear of change, a timid distrust of the new as such, while the liberal position is based on courage and confidence, on a preparedness to let change run its course even if we cannot predict where it will lead. There would not be much to object to if the conservatives merely disliked too rapid change in institutions and public policy; here the case for caution and slow process is indeed strong. But the conservatives are inclined to use the powers of government to prevent change or to limit its rate to whatever appeals to the more timid mind. In looking forward, they lack the faith in the spontaneous forces of adjustment which makes the liberal accept changes without apprehension, even though he does not know how the necessary adaptations will be brought about.
  • The conservative feels safe and content only if he is assured that some higher wisdom watches and supervises change, only if he knows that some authority is charged with keeping the change "orderly.".
  • Order appears to the conservative as the result of the continuous attention of authority, which, for this purpose, must be allowed to do what is required by the particular circumstances and not be tied to rigid rule. A commitment to principles presupposes an understanding of the general forces by which the efforts of society are co-ordinated, but it is such a theory of society and especially of the economic mechanism that conservatism conspicuously lacks. So unproductive has conservatism been in producing a general conception of how a social order is maintained that its modern votaries, in trying to construct a theoretical foundation, invariably find themselves appealing almost exclusively to authors who regarded themselves as liberal.
  • In general, it can probably be said that the conservative does not object to coercion or arbitrary power so long as it is used for what he regards as the right purposes. He believes that if government is in the hands of decent men, it ought not to be too much restricted by rigid rules. Since he is essentially opportunist and lacks principles, his main hope must be that the wise and the good will rule — not merely by example, as we all must wish, but by authority given to them and enforced by them. Like the socialist, he is less concerned with the problem of how the powers of government should be limited than with that of who wields them; and, like the socialist, he regards himself as entitled to force the value he holds on other people.
  • When I say that the conservative lacks principles, I do not mean to suggest that he lacks moral conviction. The typical conservative is indeed usually a man of very strong moral convictions. What I mean is that he has no political principles which enable him to work with people whose moral values differ from his own for a political order in which both can obey their convictions. It is the recognition of such principles that permits the coexistence of different sets of values that makes it possible to build a peaceful society with a minimum of force. The acceptance of such principles means that we agree to tolerate much that we dislike. There are many values of the conservative which appeal to me more than those of the socialists; yet for a liberal the importance he personally attaches to specific goals is no sufficient justification for forcing others to serve them.
  • To live and work successfully with others requires more than faithfulness to one's concrete aims. It requires an intellectual commitment to a type of order in which, even on issues which to one are fundamental, others are allowed to pursue different ends.
    It is for this reason that to the liberal neither moral nor religious ideals are proper objects of coercion, while both conservatives and socialists recognize no such limits.
  • In the last resort, the conservative position rests on the belief that in any society there are recognizably superior persons whose inherited standards and values and position ought to be protected and who should have a greater influence on public affairs than others. The liberal, of course, does not deny that there are some superior people — he is not an egalitarian — but he denies that anyone has authority to decide who these superior people are. While the conservative inclines to defend a particular established hierarchy and wishes authority to protect the status of those whom he values, the liberal feels that no respect for established values can justify the resort to privilege or monopoly or any other coercive power of the state in order to shelter such people against the forces of economic change. Though he is fully aware of the important role that cultural and intellectual elites have played in the evolution of civilization, he also believes that these elites have to prove themselves by their capacity to maintain their position under the same rules that apply to all others.
  • Closely connected with this is the usual attitude of the conservative to democracy. I have made it clear earlier that I do not regard majority rule as an end but merely as a means, or perhaps even as the least evil of those forms of government from which we have to choose. But I believe that the conservatives deceive themselves when they blame the evils of our time on democracy. The chief evil is unlimited government, and nobody is qualified to wield unlimited power. The powers which modern democracy possesses would be even more intolerable in the hands of some small elite.
  • It is not democracy but unlimited government that is objectionable, and I do not see why the people should not learn to limit the scope of majority rule as well as that of any other form of government. At any rate, the advantages of democracy as a method of peaceful change and of political education seem to be so great compared with those of any other system that I can have no sympathy with the antidemocratic strain of conservatism. It is not who governs but what government is entitled to do that seems to me the essential problem.
  • That the conservative opposition to too much government control is not a matter of principle but is concerned with the particular aims of government is clearly shown in the economic sphere. Conservatives usually oppose collectivist and directivist measures in the industrial field, and here the liberals will often find allies in them. But at the same time conservatives are usually protectionists and have frequently supported socialist measures in agriculture. Indeed, though the restrictions which exist today in industry and commerce are mainly the result of socialist views, the equally important restrictions in agriculture were usually introduced by conservatives at an even earlier date.
  • Conservatives feel instinctively that it is new ideas more than anything else that cause change. But, from its point of view rightly, conservatism fears new ideas because it has no distinctive principles of its own to oppose them; and, by its distrust of theory and its lack of imagination concerning anything except that which experience has already proved, it deprives itself of the weapons needed in the struggle of ideas. Unlike liberalism, with its fundamental belief in the long-range power of ideas, conservatism is bound by the stock of ideas inherited at a given time. And since it does not really believe in the power of argument, its last resort is generally a claim to superior wisdom, based on some self-arrogated superior quality.
  • Without preferring the new merely because it is new, the liberal is aware that it is of the essence of human achievement that it produces something new; and he is prepared to come to terms with new knowledge, whether he likes its immediate effects or not.
  • Personally, I find that the most objectionable feature of the conservative attitude is its propensity to reject well-substantiated new knowledge because it dislikes some of the consequences which seem to follow from it — or, to put it bluntly, its obscurantism. I will not deny that scientists as much as others are given to fads and fashions and that we have much reason to be cautious in accepting the conclusions that they draw from their latest theories. But the reasons for our reluctance must themselves be rational and must be kept separate from our regret that the new theories upset our cherished beliefs. I can have little patience with those who oppose, for instance, the theory of evolution or what are called "mechanistic" explanations of the phenomena of life because of certain moral consequences which at first seem to follow from these theories, and still less with those who regard it as irrelevant or impious to ask certain questions at all. By refusing to face the facts, the conservative only weakens his own position. Frequently the conclusions which rationalist presumption draws from new scientific insights do not at all follow from them. But only by actively taking part in the elaboration of the consequences of new discoveries do we learn whether or not they fit into our world picture and, if so, how. Should our moral beliefs really prove to be dependent on factual assumptions shown to be incorrect, it would be hardly moral to defend them by refusing to acknowledge facts.
  • Connected with the conservative distrust of the new and the strange is its hostility to internationalism and its proneness to a strident nationalism. Here is another source of its weakness in the struggle of ideas. It cannot alter the fact that the ideas which are changing our civilization respect no boundaries. But refusal to acquaint one's self with new ideas merely deprives one of the power of effectively countering them when necessary. The growth of ideas is an international process, and only those who fully take part in the discussion will be able to exercise a significant influence. It is no real argument to say that an idea is un-American, or un-German, nor is a mistaken or vicious ideal better for having been conceived by one of our compatriots.
  • An aversion to nationalism is fully compatible with a deep attachment to national traditions. But the fact that I prefer and feel reverence for some of the traditions of my society need not be the cause of hostility to what is strange and different.
  • Only at first does it seem paradoxical that the anti-internationalism of conservatism is so frequently associated with imperialism. But the more a person dislikes the strange and thinks his own ways superior, the more he tends to regard it as his mission to "civilize" other — not by the voluntary and unhampered intercourse which the liberal favors, but by bringing them the blessings of efficient government. It is significant that here again we frequently find the conservatives joining hands with the socialists against the liberals …
  • What I have described as the liberal position shares with conservatism a distrust of reason to the extent that the liberal is very much aware that we do not know all the answers and that he is not sure that the answers he has are certainly the rights ones or even that we can find all the answers. He also does not disdain to seek assistance from whatever non-rational institutions or habits have proved their worth. The liberal differs from the conservative in his willingness to face this ignorance and to admit how little we know, without claiming the authority of supernatural forces of knowledge where his reason fails him. It has to be admitted that in some respects the liberal is fundamentally a skeptic — but it seems to require a certain degree of diffidence to let others seek their happiness in their own fashion and to adhere consistently to that tolerance which is an essential characteristic of liberalism.
  • What distinguishes the liberal from the conservative here is that, however profound his own spiritual beliefs, he will never regard himself as entitled to impose them on others and that for him the spiritual and the temporal are different sphere which ought not to be confused.
  • In the United States, where it has become almost impossible to use "liberal" in the sense in which I have used it, the term "libertarian" has been used instead. It may be the answer; but for my part I find it singularly unattractive. For my taste it carries too much the flavor of a manufactured term and of a substitute. What I should want is a word which describes the party of life, the party that favors free growth and spontaneous evolution. But I have racked my brain unsuccessfully to find a descriptive term which commends itself.
  • The more I learn about the evolution of ideas, the more I have become aware that I am simply an unrepentant Old Whig — with the stress on the "old."
  • Even when men approve of the same arrangements, it must be asked whether they approve of them because they exist or because they are desirable in themselves. The common resistance to the collectivist tide should not be allowed to obscure the fact that the belief in integral freedom is based on an essentially forward-looking attitude and not on any nostalgic longing for the past or a romantic admiration for what has been.
  • The conservatives have already accepted a large part of the collectivist creed — a creed that has governed policy for so long that many of its institutions have come to be accepted as a matter of course and have become a source of pride to "conservative" parties who created them. Here the believer in freedom cannot but conflict with the conservative and take an essentially radical position, directed against popular prejudices, entrenched positions, and firmly established privileges. Follies and abuses are no better for having long been established principles of folly.
  • Though quieta non movere may at times be a wise maxim for the statesman it cannot satisfy the political philosopher. He may wish policy to proceed gingerly and not before public opinion is prepared to support it, but he cannot accept arrangements merely because current opinion sanctions them. In a world where the chief need is once more, as it was at the beginning of the nineteenth century, to free the process of spontaneous growth from the obstacles and encumbrances that human folly has erected, his hopes must rest on persuading and gaining the support of those who by disposition are "progressives," those who, though they may now be seeking change in the wrong direction, are at least willing to examine critically the existing and to change it wherever necessary.
  • The task of the political philosopher can only be to influence public opinion, not to organize people for action. He will do so effectively only if he is not concerned with what is now politically possible but consistently defends the "general principles which are always the same." In this sense I doubt whether there can be such a thing as a conservative political philosophy. Conservatism may often be a useful practical maxim, but it does not give us any guiding principles which can influence long-range developments.

1970s[edit]

  • The picture of man as a being who, thanks to his reason, can rise above the values of his civilization, in order to judge it from the outside or from a higher point of view, is an illusion. It simply must be understood that reason itself is part of civilization. … Sudden complete reconstruction of the whole is not possible at any stage of the process, because we must always use the material that is available, and which itself is the integrated product of a process of evolution.
    • “The Errors of Constructivism” (1970), reprinted in New Studies in Philosophy, Politics, Economics and the History of Ideas (1978).
  • Since the value of freedom rests on the opportunities it provides for unforeseen and unpredictable actions, we will rarely know what we lose through a particular restriction of freedom.
    • “Principles or Expediency?” Toward Liberty: Essays in Honor of Ludwig von Mises on the Occasion of his 90th Birthday (29 September 1971).
  • 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.
    • Economic Freedom and Representative Government (1973).
  • I do not think it is an exaggeration to say that history is largely a history of inflation, usually inflations engineered by governments for the gain of governments.
    • Denationalisation of Money: The Argument Refined (1976).
  • I fear that since ‘Keynesian’ propaganda has filtered through to the masses, has made inflation respectable and provided agitators with arguments which the professional politicians are unable to refute, the only way to avoid being driven by continuing inflation into a controlled and directed economy, and therefore ultimately in order to save civilisation, will be to deprive governments of their power over the supply of money.
    • Denationalisation of Money: The Argument Refined (1976).
  • I've always doubted that the socialists had a leg to stand on intellectually. They have improved their argument somehow, but once you begin to understand that prices are an instrument of communication and guidance which embody more information than we directly have, the whole idea that you can bring about the same order based on the division of labor by simple direction falls to the ground. Similarly, the idea [that] you can arrange for distributions of incomes which correspond to some conception of merit or need. If you need prices, including the prices of labor, to direct people to go where they are needed, you cannot have another distribution except the one from the market principle. I think that intellectually there is just nothing left of socialism.
  • The misconception that costs determined prices prevented economists for a long time from recognizing that it was prices which operated as the indispensable signals telling producers what costs it was worth expending on the production of the various commodities and services, and not the other way around. It was the costs which they had expended which determined the prices of things produced.
    It was this crucial insight which finally broke through and established itself about a hundred years ago through the so-called marginal revolution in economics.
    The chief insight gained by modern economists is that the market is essentially an ordering mechanism, growing up without anybody wholly understanding it, that enables us to utilize widely dispersed information about the significance of circumstances of which we are mostly ignorant. However, the various planners (and not only the planners in the socialist camp) and dirigists have still not yet grasped this.
    • “Coping with Ignorance,” Imprimis 7 (1978).
  • The belief derived from physics that measurement is an essential foundation of all sciences is very old. There was more than 300 years ago a German philosopher named Erhard Weigel who strove to construct a universal science which he proposed to call Pantometria, based as the name says on measuring everything. Much of economics, and if I may add in parenthesis much of contemporary psychology, has indeed become Pantometria in a sense in the principle that if you don't know what measurements mean, measure anyhow because that is what science does. The social sciences building at the University of Chicago indeed still bears since it was built 40 years ago on its outside an inscription taken from the famous physicist Lord Kelvin: "When you cannot measure, your knowledge is meager and unsatisfactory." I will admit that that may be true, but it is certainly not scientific to insist on measurement where you don't know what your measurements mean. There are cases where measurements are not relevant. What has done much damage to microeconomics is striving for a pseudo-exactness by imitating methods of the physical sciences which have to deal with what are fundamentally much more simple phenomena. And the assumption that it is possible to ascertain all the relevant particular facts still completely dominates the alternative methods of dealing with our constitutional ignorance, which economists have tried to overcome. This of course, is what has come to be called macroeconomics as distinct from microeconomics.
    • “Coping with Ignorance,” Imprimis 7 (1978).
  • It seems to me more and more that the immense efforts which during the great popularity of macroeconomics over the last thirty or forty years have been devoted to it, were largely misspent, and that if we want to be useful in the future we shall have to be content to improve and spread the admittedly limited insights which microeconomics conveys.
    I believe it is only microeconomics which enables us to understand the crucial functions of the market process: that it enables us to make effective use of information about thousands of facts of which nobody can have full knowledge.
    • “Coping with Ignorance,” Imprimis 7 (1978).
  • I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions. This is a belief deliberately maintained by the other side because if they admitted that the issue is not a scientific question, they would have to admit that their science is antiquated and that, in academic circles, it occupies the position of astrology and not one that has any justification for serious consideration in scientific discussion. It seems to me that socialists today can preserve their position in academic economics merely by the pretense that the differences are entirely moral questions about which science cannot decide.
    • Conversation at the American Enterprise Institute for Public Policy Research, Washington, D.C. (9 February 1978); published in A Conversation with Friedrich A. Von Hayek: Science and Socialism (1979).
  • Nobody who has lived through the rise of the violent anti-Semitism which led to Hitler can refuse Mrs. Thatcher admiration for her courageous and outspoken warning. When I grew up in Vienna the established Jewish families were a generally respected group and all decent people would frown upon the occasional anti-Jewish outbursts of a few popular politicians. It was the sudden influx of large numbers of Galician and Polish Jews [during World War I] … which in a short period changed the attitude. They were too visibly different to be readily absorbed.
    • Letter to The Times after Thatcher claimed that British people were afraid of being "swamped" by people of a different culture. (11 February 1978).
  • I have certainly never contended that generally authoritarian governments are more likely to secure individual liberty than democratic ones, but rather the contrary. This does not mean, however, that in some historical circumstances personal liberty may not have been better protected under an authoritarian than democratic government. (...) More recently I have not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende. Nor have I heard any sensible person claim that in the principalities of Monaco or Lichtenstein, which I am told are not precisely democratic, personal liberty is smaller than anywhere else!
    • Letter to Times of London (1978).
  • To discover the meaning of what is called "social justice" has been one of my chief preoccupations for more than 10 years. I have failed in this endeavour — or rather, have reached the conclusion that, with reference to society of free men, the phrase has no meaning whatever.
    • New Studies in Philosophy Politics, Economics and the History of Ideas (1978).
  • Is it really likely that a National Planning Officer would have a better judgement of 'the number of cars, the number of generators, and the quantities of frozen foods we are likely to require in, say, five years,' than Ford or General Motors etc., and, even more important, would it even be desirable that various companies in an industry all act on the same guess?
    • New Studies in Philosophy Politics, Economics and the History of Ideas (1978).
  • A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise. If Mrs. Thatcher said that free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom, while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot.

Nobel Banquet Speech (1974)[edit]

Speech at the Nobel Banquet (10 December 1974) Full text online
  • I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it.
  • I feared that such a prize, as I believe is true of the activities of some of the great scientific foundations, would tend to accentuate the swings of scientific fashion. This apprehension the selection committee has brilliantly refuted by awarding the prize to one whose views are as unfashionable as mine are.
  • The Nobel Prize confers on an individual an authority which in economics no man ought to possess.
    This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence.
    But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally.
    There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society — as the press tends to treat him till in the end he may himself be persuaded to believe.

The Pretence of Knowledge (1974)[edit]

I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false.
To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.
Cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants …
Nobel Prize lecture (11 December 1974)
  • On the other hand, the economists are at this moment called upon to say how to extricate the free world from the serious threat of accelerating inflation which, it must be admitted, has been brought about by policies which the majority of economists recommended and even urged governments to pursue. We have indeed at the moment little cause for pride: as a profession we have made a mess of things.
  • It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences — an attempt which in our field may lead to outright error. It is an approach which has come to be described as the "scientistic" attitude — an attitude which, as I defined it some thirty years ago, "is decidedly unscientific in the true sense of the word, since it involves a mechanical and uncritical application of habits of thought to fields different from those in which they have been formed."
  • Unlike the position that exists in the physical sciences, in economics and other disciplines that deal with essentially complex phenomena, the aspects of the events to be accounted for about which we can get quantitative data are necessarily limited and may not include the important ones. While in the physical sciences it is generally assumed, probably with good reason, that any important factor which determines the observed events will itself be directly observable and measurable, in the study of such complex phenomena as the market, which depend on the actions of many individuals, all the circumstances which will determine the outcome of a process, for reasons which I shall explain later, will hardly ever be fully known or measurable.
  • While in the physical sciences the investigator will be able to measure what, on the basis of a prima facie theory, he thinks important, in the social sciences often that is treated as important which happens to be accessible to measurement. This is sometimes carried to the point where it is demanded that our theories must be formulated in such terms that they refer only to measurable magnitudes.
  • There may thus well exist better "scientific" evidence for a false theory, which will be accepted because it is more "scientific", than for a valid explanation, which is rejected because there is no sufficient quantitative evidence for it.
  • The social sciences, like much of biology but unlike most fields of the physical sciences, have to deal with structures of essential complexity, i.e. with structures whose characteristic properties can be exhibited only by models made up of relatively large numbers of variables. Competition, for instance, is a process which will produce certain results only if it proceeds among a fairly large number of acting persons.
  • There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one.
  • I confess that I prefer true but imperfect knowledge, even if it leaves much indetermined and unpredictable, to a pretence of exact knowledge that is likely to be false. The credit which the apparent conformity with recognized scientific standards can gain for seemingly simple but false theories may, as the present instance shows, have grave consequences.
  • To entrust to science — or to deliberate control according to scientific principles — more than scientific method can achieve may have deplorable effects. The progress of the natural sciences in modern times has of course so much exceeded all expectations that any suggestion that there may be some limits to it is bound to arouse suspicion. Especially all those will resist such an insight who have hoped that our increasing power of prediction and control, generally regarded as the characteristic result of scientific advance, applied to the processes of society, would soon enable us to mould society entirely to our liking.
  • Allow me to define more specifically the inherent limitations of our numerical knowledge which are so often overlooked. I want to do this to avoid giving the impression that I generally reject the mathematical method in economics. I regard it in fact as the great advantage of the mathematical technique that it allows us to describe, by means of algebraic equations, the general character of a pattern even where we are ignorant of the numerical values which will determine its particular manifestation. We could scarcely have achieved that comprehensive picture of the mutual interdependencies of the different events in a market without this algebraic technique. It has led to the illusion, however, that we can use this technique for the determination and prediction of the numerical values of those magnitudes; and this has led to a vain search for quantitative or numerical constants.
  • The confidence in the unlimited power of science is only too often based on a false belief that the scientific method consists in the application of a ready-made technique, or in imitating the form rather than the substance of scientific procedure, as if one needed only to follow some cooking recipes to solve all social problems. It sometimes almost seems as if the techniques of science were more easily learnt than the thinking that shows us what the problems are and how to approach them.
  • The conflict between what in its present mood the public expects science to achieve in satisfaction of popular hopes and what is really in its power is a serious matter because, even if the true scientists should all recognize the limitations of what they can do in the field of human affairs, so long as the public expects more there will always be some who will pretend, and perhaps honestly believe, that they can do more to meet popular demands than is really in their power. It is often difficult enough for the expert, and certainly in many instances impossible for the layman, to distinguish between legitimate and illegitimate claims advanced in the name of science.
  • If I am not mistaken, psychology, psychiatry and some branches of sociology, not to speak about the so-called philosophy of history, are even more affected by what I have called the scientistic prejudice, and by specious claims of what science can achieve.
  • The chief point we must remember is that the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables — either particular facts or relative frequencies of events.
  • As we advance we find more and more frequently that we can in fact ascertain only some but not all the particular circumstances which determine the outcome of a given process; and in consequence we are able to predict only some but not all the properties of the result we have to expect. Often all that we shall be able to predict will be some abstract characteristic of the pattern that will appear — relations between kinds of elements about which individually we know very little. Yet, as I am anxious to repeat, we will still achieve predictions which can be falsified and which therefore are of empirical significance.
    Of course, compared with the precise predictions we have learnt to expect in the physical sciences, this sort of mere pattern predictions is a second best with which one does not like to have to be content. Yet the danger of which I want to warn is precisely the belief that in order to have a claim to be accepted as scientific it is necessary to achieve more. This way lies charlatanism and worse. To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to make us do much harm.
  • In the physical sciences there may be little objection to trying to do the impossible; one might even feel that one ought not to discourage the over-confident because their experiments may after all produce some new insights. But in the social field the erroneous belief that the exercise of some power would have beneficial consequences is likely to lead to a new power to coerce other men being conferred on some authority. Even if such power is not in itself bad, its exercise is likely to impede the functioning of those spontaneous ordering forces by which, without understanding them, man is in fact so largely assisted in the pursuit of his aims.
  • We are only beginning to understand on how subtle a communication system the functioning of an advanced industrial society is based — a communications system which we call the market and which turns out to be a more efficient mechanism for digesting dispersed information than any that man has deliberately designed.
  • If man is not to do more harm than good in his efforts to improve the social order, he will have to learn that in this, as in all other fields where essential complexity of an organized kind prevails, he cannot acquire the full knowledge which would make mastery of the events possible. He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants.
  • The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society — a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals.

Law, Legislation and Liberty. Vol. 1 : Rules and Order (1973)[edit]

  • There are two ways of looking at the pattern of human activities which lead to very different conclusions concerning both its explanation and the possibilities of deliberately altering it. Of these one is based on conceptions which are demonstrably false, yet are so pleasing to human vanity that they have gained great influence and are constantly employed even by people who know that they rest on a fiction, but believe that fiction to be innocuous. The other, although few people will question its basic contentions if they are stated abstractly, leads in some respects to conclusions so unwelcome that few are willing to follow through to the end.
    The first gives us a sense of unlimited power to realize our wishes, while the second leads to the insight that there are limitations to what we can deliberately bring about, and to the recognition that some of our present hopes are delusions. Yet the effect of allowing ourselves to be deluded by the first view has always been that man has actually limited the scope of what he can achieve. For it has always been the recognition of the limits of the possible which has enabled man to make full use of his powers.
    • Ch 1 "Reason and Evolution" First lines.

Law, Legislation and Liberty. Vol. 2 : The Mirage of Social Justice (1976)[edit]

  • When we ask what ought to be the relative remunerations of a nurse or a butcher, or a coal miner and a judge at a high court, of the deep sea diver of the cleaner of sewers, of the organiser of a new industry and a jockey, of the inspector of taxes and the inventor of a life-saving drug, of the jet-pilot or the professor of mathematics, the appeal to 'social justice' does not give us the slightest help in deciding…
    • Ch. 9 : Social’ or Distributive Justice, p. 77-78.
  • A claim for equality of material position can be met only by a government with totalitarian powers.
    • Ch. 9 : Social’ or Distributive Justice.
  • In the Small group the individual can know the effects of his actions on his several fellows, and the rules may effectively forbid him to harm them in any manner and even require him to assist them in specific ways. In the Great Society many of the effects of a person's actions on various fellows must be unknown to him. It can, therefore, not be the specific effects in the particular case, but only rules which define kinds of actions prohibited or required, which must serve as guides to the individual.
    • Ch. 9 : Social’ or Distributive Justice, p. 90.
  • I have come to feel strongly that the greatest service I can still render to my fellow men would be that I could make the speakers and writers among them thoroughly ashamed ever again to employ the term 'social justice'.
    • Ch. 9 : Social’ or Distributive Justice, p. 97.
  • The manufacturer does not produce shoes because he knows that Jones needs them. He produces because he knows that dozens of traders will buy certain numbers at various prices because they (or rather the retailer they serve) know that thousands of Joneses, whom the manufacturer does not know, want to buy them.
    • Ch. 10 : The Market Order or Catallaxy, p. 115-116.
  • Socialism is simply a re-assertion of that tribal ethics whose gradual weakening had made an approach to the Great Society possible.
    • Ch. 11 : The Discipline of Abstract Rules and the Emotions of the Tribal Society, p. 133-134.

Law, Legislation and Liberty. Vol. 3 : The Political Order of a Free People (1979)[edit]

  • "Emergencies" have always been the pretext on which the safeguards of individual liberty have been eroded.
    • Ch. 17 : A Model Constitution.
  • Once politics become a tug-of-war for shares in the income pie, decent government is impossible.
    • Ch. 18 : The Containment of Power and the Dethronement of Politics.
  • 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…
    • Ch. 18 : The Containment of Power and the Dethronement of Politics.
  • There exists no third principle for the organisation of the economics process which can be rationally chosen to achieve any desirable ends, in addition to either a functioning market in which nobody can conclusively determine how well-off particular groups or individuals will be, or a central direction where a group organised for power determines it.
    • Ch. 18 : The Containment of Power and the Dethronement of Politics
  • Nobody with open eyes can any longer doubt that the danger to personal freedom comes chiefly from the left.
    • Ch. 18 : The Containment of Power and the Dethronement of Politics', Section : "Limited and Unlimited Power"

1980s[edit]

It is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally I prefer a liberal dictator to democratic government lacking liberalism.
  • There is no salvation for Britain unless the special privileges granted to the trade unions in 1906 are revoked. the average level of real wages of British workers would undoubtedly be higher, and their chances of finding employment better, if the wages of different occupations were again determined by the market and all limitations on the work an individual is allowed to do were removed.
    • "Trade Unions — The Biggest Obstacle", Economic Affairs (October 1980).
  • I did say in print, in February, 1929 that there was no hope for economic recovery in Europe before American interest rates came down. That wouldn’t be until the American boom collapsed — which was likely to happen within the next few months.And this did, in fact, happen in October 1929.
    What made me expect this, of course, was one of my main theoretical beliefs — that an inflationary boom cannot be maintained indefinitely. I was sure that a very unstable situation was created by the artificial prolongation of the boom in 1927, when the Federal Reserve tried to stave off a collapse by credit expansion.
    • Interview in Silver & Gold Report, Vol. V, No. 20, (Late October 1980).
  • I don’t believe we’re in for a crash now. It's much more likely that government will just conceal the continuation of inflation by price controls. But if anything is worse than an open inflation, it’s a repressed inflation. What you’re likely to get is not a violent deflation but increasing stagnation of productivity.
    • Interview in Silver & Gold Report, Vol. V, No. 20, (Late October 1980).
  • If the world as a whole returned to the gold standard there would be such fluctuations in the value of gold that it would very soon prove impractical.
    • Interview in Silver & Gold Report, Vol. V, No. 20, (Late October 1980).
  • If a big country like the United States did return to the gold standard, it would start a great deflation.
    • Interview in Silver & Gold Report, Vol. V, No. 20, (Late October 1980).
  • Well, I would say that, as long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally I prefer a liberal dictator to democratic government lacking liberalism. My personal impression — and this is valid for South America — is that in Chile, for example, we will witness a transition from a dictatorial government to a liberal government. And during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement.
    • Interview in El Mercurio (1981).
  • There is endless repetition of the claim that Professor Oskar Lange in 1936 refuted the contention advanced in 1921 by Ludwig von Mises that ‘economic calculation is impossible in a socialist society’. The claim rests wholly on theoretical argument by Oskar Lange in little more than two pages, ...
    • "Two Pages of Fiction", Economic Affairs (1982).
  • A reconsideration of the discussion in which I took an active part more than 40 years ago has left me with a rather depressing view of the somewhat shameful state of what has become an established part of economic science, the subject of ‘economic systems’. It appears to me that in this subject political attractiveness has been preserved by the flimsiest of arguments. The kindest thing one can say is that some well-meaning people have allowed themselves to be deceived by the vague and thoughtless language commonly used by specialists in the theory of these issues.
    • "Two Pages of Fiction", Economic Affairs (1982).
  • I don't know what monetarism is. If monetarism just means a good old-fashioned quantity theory, of course it has not failed. If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve — ascertain — a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible. In fact, just about 40 years ago in the opening sentences of my book, Prices and Production, I wrote that it would be a great misfortune if people ever cease to believe in the quantity theory of money. It would be even worse ever to believe it literally. And that's exactly what Milton Friedman does.
    • "Interview with F. A. Hayek", in Cato Policy Report (February 1983).
  • I don't like criticizing Milton Friedman not only because he is an old friend but because, outside of monetary theory, we are in complete agreement. Our general views on what is desired and what is not are almost identical until we get on to money. But if I told him what I said before, that I very much doubt whether monetary policy has ever done anything good, he would disagree. He personally is convinced that a good monetary policy is a foundation for everything.
    • Exclusive Interview with F.A. Hayek by James U. Blanchard III, in Cato Policy Report (May/June 1984).

The Fatal Conceit : The Errors of Socialism (1988)[edit]

  • To understand our civilisation, one must appreciate that the extended order resulted not from human design or intention but spontaneously: it arose from unintentionally conforming to certain traditional and largely moral practices, many of which men tend to dislike, whose significance they usually fail to understand, whose validity they cannot prove, and which have nonetheless fairly rapidly spread by means of an evolutionary selection — the comparative increase of population and wealth — of those groups that happened to follow them. The unwitting, reluctant, even painful adoption of these practices kept these groups together, increased their access to valuable information of all sorts, and enabled them to be 'fruitful, and multiply, and replenish the earth, and subdue it' (Genesis 1:28). This process is perhaps the least appreciated facet of human evolution.
    • Introduction: Was Socialism a Mistake?, p. 6.
  • The main point of my argument is, then, that the conflict between, on one hand, advocates of the spontaneous extended human order created by a competitive market, and on the other hand those who demand a deliberate arrangement of human interaction by central authority based on collective command over available resources is due to a factual error by the latter about how knowledge of these resources is and can be generated and utilised.
    • Introduction: Was Socialism a Mistake?
  • I wish neither to deny reason the power to improve norms and institutions nor even to insist that it is incapable of recasting the whole of our moral system in the direction now commonly conceived as `social justice'. We can do so, however, only by probing every part of a system of morals. If such a morality pretends to be able to do something that it cannot possibly do, e.g., to fulfill a knowledge-generating and organisational function that is impossible under its own rules and norms, then this impossibility itself provides a decisive rational criticism of that moral system. It is important to confront these consequences, for the notion that, in the last resort, the whole debate is a matter of value judgements and not of facts has prevented professional students of the market order from stressing forcibly enough that socialism cannot possibly do what it promises.
    • Introduction: Was Socialism a Mistake?
  • Our moral traditions, like many other aspects of our culture, developed concurrently with our reason, not as its product.
    • Introduction: Was Socialism a Mistake?, p. 10.
  • It is no accident that many abstract rules, such as those treating individual responsibility and several property, are associated with economics. Economics has from its origins been concerned with how an extended order of human interaction comes into existence through a process of variation, winnowing and sifting far surpassing our vision or our capacity to design.
    • Ch. 1: Between Instinct and Reason, p. 14.
  • Information-gathering institutions such as the market enable us to use such dispersed and unsurveyable knowledge to form super-individual patterns.
    • Ch. 1: Between Instinct and Reason.
  • This evolution [of extended order] came about, then, through the spreading of new practices by a process of transmission of acquired habits analogous to, but also in important respects different from, biological evolution. I shall consider some of these analogies and differences below, but we might mention here that biological evolution would have been far too slow to alter or replace man's innate responses in the course of the ten or twenty thousand years during which civilisation has developed - not to speak of being too slow to have influenced the far greater numbers whose ancestors joined the process only a few hundred years ago.
    • Ch. 1: Between Instinct and Reason.
  • Part of our present difficulty is that we must constantly adjust our lives, our thoughts and our emotions, in order to live simultaneously within the different kinds of orders according to different rules. If we were to apply the unmodified, uncurbed, rules of the micro-cosmos (i.e. of the small band or troop, or of, say, our families) to the macro-cosmos (our wider civilisation), as our instincts and sentimental yearnings often make us wish to do, we would destroy it. Yet if we were always to apply the rules of the extended order to our more intimate groupings, we would crush them. So we must learn to live in two sorts of world at once.
    • Ch. 1: Between Instinct and Reason, p. 18.
  • [I]t is true that the greater part of our daily lives, and the pursuit of most occupations, give little satisfaction to deep-seated ` altruistic' desires to do visible good. Rather, accepted practices often require us to leave undone what our instincts impel us to do. It is not so much, as is often suggested, emotion and reason that conflict, but innate instincts and learnt rules. Yet, as we shall see, following these learnt rules generally does have the effect of providing a greater benefit to the community at large than most direct `altruistic' action that a particular individual might take.
    • Ch. 1: Between Instinct and Reason.
  • The evolution of rules was far from unhindered, since the powers enforcing the rules generally resisted rather than assisted changes conflicting with traditional views about what was right or just.
    • Ch. 1: Between Instinct and Reason.
  • Just as instinct is older than custom and tradition, so then are the latter older than reason: custom and tradition stand between instinct and reason - logically, psychologically, temporally. They are due neither to what is sometimes called the unconscious, nor to intuition, nor to rational understanding. Though in a sense based on human experience in that they were shaped in the course of cultural evolution, they were not formed by drawing reasoned conclusions from certain facts or from an awareness that things behaved in a particular way. Though governed in our conduct by what we have learnt, we often do not know why we do what we do.
    • Ch. 1: Between Instinct and Reason.
  • No one who takes an evolutionary approach to the study of culture can, however, fail to be aware of the hostility often shown towards such approaches. Such hostility often stems from reactions to just those `social scientists' who in the nineteenth century needed Darwin to recognise what they ought to have learnt from their own predecessors, and who did a lasting disservice to the advance of the theory of cultural evolution, which they indeed brought into discredit.
    • Ch. 1: Between Instinct and Reason.
  • If morals and tradition, rather than intelligence and calculating reason, lifted men above the savages, the distinctive foundations of modern civilisation were laid in antiquity in the region surrounding the Mediterranean Sea.
    • Ch. 2: The Origins of Liberty, Property and Justice.
  • An important aspect of this freedom - the freedom on the part of different individuals or sub-groups to pursue distinct aims, guided by their differing knowledge and skills - was made possible not only by the separate control of various means of production, but also by another practice, virtually inseparable from the first: the recognition of approved methods of transferring this control.
    • Ch. 2: The Origins of Liberty, Property and Justice.
  • Nothing is more misleading, then, than the conventional formulae of historians who represent the achievement of a powerful state as the culmination of cultural evolution: it as often marked its end. In this respect students of early history were overly impressed and greatly misled by monuments and documents left by the holders of political power, whereas the true builders of the extended order, who as often as not created the wealth that made the monuments possible, left less tangible and ostentatious testimonies to their achievement.
    • Ch. 2: The Origins of Liberty, Property and Justice.
  • Having written of the pretence of reason and the dangers of 'rational' interference with spontaneous order, I need to add yet another word of caution. My central aim has made it necessary to stress the spontaneous evolution of rules of conduct that assist the formation of self-organising structures. This emphasis on the spontaneous nature of the extended or macro-order could mislead if it conveyed the impression that, in the macro-order, deliberate organisation is never important.
    • Ch. 2: The Origins of Liberty, Property and Justice.
  • This `chain reaction' sparked by new settlement and trade may be studied more closely. While some animals are adapted to particular and rather limited environmental 'niches' outside of which they can hardly exist, men and a few other animals such as rats have been able to adapt themselves almost everywhere on the surface of the earth. This is hardly due merely to adaptations by individuals.
    • Ch. 3: The Evolution of the Market: Trade and Civilisation.
  • To create such an order, such individuals had to be able to use information for purposes known only to themselves. They could not have done so without the benefit of certain practices, such as that of the xenos, shared in common with distant groups.
    • Ch. 3: The Evolution of the Market: Trade and Civilisation.
  • Indeed, by the nineteenth century, serious intellectual appreciation and discussion of the role of property in the development of civilisation would seem to have fallen under a kind of ban in many quarters. During this time property gradually became suspect among many of those who might have been expected to investigate it, a topic to be avoided by progressive believers in a rational reshaping of the structure of human cooperation.
    • Ch. 4: The Revolt of Instinct and Reason.
  • I have just written that the study of traditional institutions such as property `fell under a ban'. This is hardly an exaggeration, for it is highly curious that so interesting and important a process as the evolutionary selection of moral traditions has been so little studied, and the direction these traditions gave to the development of civilisation so largely ignored. Of course this will not seem so peculiar to a constructivist. If one suffers under the delusion of 'social engineering', the notion that man can consciously choose where he wants to go, it will not seem so important to discover how he reached his present situation.
    • Ch. 4: The Revolt of Instinct and Reason.
  • The influence of rationalism has indeed been so profound and pervasive that, in general, the more intelligent an educated person is, the more likely he or she now is not only to be a rationalist, but also to hold socialist views (regardless of whether he or she is sufficiently doctrinal to attach to his or her views any label, including `socialist'). The higher we climb up the ladder of intelligence, the more we talk with intellectuals, the more likely we are to encounter socialist convictions. Rationalists tend to be intelligent and intellectual; and intelligent intellectuals tend to be socialists.
    • Ch. 4: The Revolt of Instinct and Reason.
  • Moreover, it is perhaps appropriate to remind readers in this place of my essay 'On Why I Am Not a Conservative' (1960: Postscript), lest they draw inaccurate conclusions. Although my argument is directed against socialism, I am as little a Tory-Conservative as was Edmund Burke. My conservatism, such as it is, is entirely confined to morals within certain limits. I am entirely in favour of experimentation - indeed for very much more freedom than conservative governments tend to allow.
    • Ch. 4: The Revolt of Instinct and Reason.
  • Like other traditions, the tradition of reason is learnt, not innate. It too lies between instinct and reason; and the question of the real reasonableness and truth of this tradition of proclaimed reason and truth must now also scrupulously be examined.
    • Ch. 4: The Revolt of Instinct and Reason.
  • Hence I wish to concede forthwith that most tenets, institutions, and practices of traditional morality and of capitalism do not meet the requirements or criteria stated and are -from the perspective of this theory of reason and science - 'unreasonable' and 'unscientific'. Moreover, since, as we have also admitted, those who continue to follow traditional practices do not themselves usually understand how these practices were formed or how they endure, it is hardly surprising that alternative justifications', so-called, that traditionalists sometimes offer for their practices are often rather naive (and hence have provided fair game for our intellectuals), and have no connection with the real reasons for their success. Many traditionalists do not even bother with justifications that could not be provided anyway (thus allowing intellectuals to denounce them as anti-intellectual or dogmatic), but go on following their practices out of habit or religious faith. Nor is this in any way `news'.
    • Ch. 5: The Fatal Conceit.
  • [T]here is the question of how our knowledge really does arise. Most knowledge - and I confess it took me some time to recognise this - is obtained not from immediate experience or observation, but in the continuous process of sifting a learnt tradition, which requires individual recognition and following of moral traditions that are not justifiable in terms of the canons of traditional theories of rationality.
    • Ch. 5: The Fatal Conceit.
  • The information that individuals or organisations can use to adapt to the unknown is necessarily partial, and is conveyed by signals (e.g., prices) through long chains of individuals, each person passing on in modified form a combination of streams of abstract market signals. Nonetheless, the whole structure of activities tends to adapt, through these partial and fragmentary signals, to conditions foreseen by and known to no individual, even if this adaptation is never perfect. That is why this structure survives, and why those who use it also survive and prosper.
    • Ch. 5: The Fatal Conceit.
  • Whereas, in fact, specialised students, even after generations of effort, find it exceedingly difficult to explain such matters, and cannot agree on what are the causes or what will be the effects of particular events. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.
    To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account.
    • Ch. 5: The Fatal Conceit.
  • The whole process of calculating in terms of market prices was, indeed, sometimes even represented as part of a devious manoeuvre on the part of owners of capital to conceal how they exploited workers. But such retorts quite fail to address the arguments and facts already rehearsed: some hypothetical body of objective facts is no more available to capitalists for manipulating the whole than it is to the managers that the socialists would like to replace them. Such objective facts simply do not exist and are unavailable to anyone.
    • Ch. 5: The Fatal Conceit.
  • [T]here is a difference between following rules of conduct, on the one hand, and knowledge about something, on the other. (...) The habit of following rules of conduct is an ability utterly different from the knowledge that one's actions will have certain kinds of effects.
    • Ch. 5: The Fatal Conceit.
  • [T]here is the important point that an order arising from the separate decisions of many individuals on the basis of different information cannot be determined by a common scale of the relative importance of different ends.
    • Ch. 5: The Fatal Conceit.
  • Such an order, although far from perfect and often inefficient, can extend farther than any order men could create by deliberately putting countless elements into selected `appropriate' places. Most defects and inefficiencies of such spontaneous orders result from attempting to interfere with or to prevent their mechanisms from operating, or to improve the details of their results. Such attempts to intervene in spontaneous order rarely result in anything closely corresponding to men's wishes, since these orders are determined by more particular facts than any such intervening agency can know.
    • Ch. 5: The Fatal Conceit.
  • Comprehending the role played by the transmission of information (or of factual knowledge) opens the door to understanding the extended order. Yet these issues are highly abstract, and are particularly hard to grasp for those schooled in the mechanistic, scientistic, constructivist canons of rationality that dominate our educational systems - and who consequently tend to be ignorant of biology, economics, and evolution.
    • Ch. 5: The Fatal Conceit.
  • There is an irony here: that precisely those who do not think of economic events in literally materialistic terms - that is, in terms of physical quantities of material substances - but are guided by calculations in terms of value, i.e., by the appreciation that men have for these objects, and particularly those differences between costs and price that are called profits, should habitually be denounced as materialists. Whereas it is precisely the striving for profit that makes it possible for those engaged in it not to think in terms of material quantities of particular concrete needs of known individuals, but of the best way in which they can contribute to an aggregate output that results from the similar separate efforts of countless unknown others.
    • Ch. 6: The Mysterious World of Trade and Money.
  • Perhaps the main force behind the persistent dislike of commercial dealings is then no more than plain ignorance and conceptual difficulty. This is however compounded with preexisting fear of the unfamiliar: a fear of sorcery and the unnatural, and also a fear of knowledge itself harking back to our origins and indelibly memorialised in the first few chapters of the book of Genesis, in the story of man's expulsion from the Garden of Eden. All superstitions, including socialism, feed on such fear.
    • Ch. 6: The Mysterious World of Trade and Money.
  • Some habits that have crept into mathematical analysis of the market process often mislead even trained economists.
    • Ch. 6: The Mysterious World of Trade and Money.
  • The creation of wealth is not simply a physical process and cannot be explained by a chain of cause and effect. It is determined not by objective physical facts known to any one mind but by the separate, differing, information of millions, which is precipitated in prices that serve to guide further decisions.
    • Ch. 6: The Mysterious World of Trade and Money.
  • Ignorance of the function of trade, which led initially to fear, and in the Middle Ages to uninformed regulation, and which only comparatively recently yielded to better understanding, has, then, now been revived in a new pseudo-scientific form.
    • Ch. 6: The Mysterious World of Trade and Money.
  • Money, the very 'coin' of ordinary interaction, is hence of all things the least understood and - perhaps with sex - the object of greatest unreasoning fantasy; and like sex it simultaneously fascinates, puzzles and repels.
    • Ch. 6: The Mysterious World of Trade and Money.
  • The disdain of profit is due to ignorance, and to an attitude that we may if we wish admire in the ascetic who has chosen to be content with a small share of the riches of this world, but which, when actualised in the form of restrictions on profits of others, is selfish to the extent that it imposes asceticism, and indeed deprivations of all sorts, on others.
    • Ch. 6: The Mysterious World of Trade and Money.
  • Language enables us not only to label objects given to our senses as distinct entities, but also to classify an infinite variety of combinations of distinguishing marks according to what we expect from them and what we may do with them. Such labelling, classification, and distinction is of course often vague. More importantly, all usage of language is laden with interpretations or theories about our surroundings. As Goethe recognised, all that we imagine to be factual is already theory: what we 'know' of our surroundings is our interpretation of them.
    • Ch. 7: Our Poisoned Language.
  • [E]ven now, outside the scientific examination of law, language and the market, studies of human affairs continue to be dominated by a vocabulary chiefly derived from animistic thinking.
    • Ch. 7: Our Poisoned Language.
  • Much the worst use of 'social', one that wholly destroys the meaning of any word it qualifies, is in the almost universally used phrase 'social justice'.
    • Ch. 7: Our Poisoned Language.
  • Envy and ignorance lead people to regard possessing more than one needs for current consumption as a matter for censure rather than merit.
    • Ch. 8: The Extended Order and Population Growth
  • So far as we know, the extended order is probably the most complex structure in the universe - a structure in which biological organisms that are already highly complex have acquired the capacity to learn, to assimilate, parts of suprapersonal traditions enabling them to adapt themselves from moment to moment into an ever-changing structure possessing an order of a still higher level of complexity.
    • Ch. 8: The Extended Order and Population Growth
  • Yet if the market economy did indeed prevail over other types of order because it enabled those groups that adopted its basic rules the better to multiply, then the calculation in market values is a calculation in terms of lives: individuals guided by this calculation did what most helped to increase their numbers, although this could hardly have been their intention.
    • Ch. 8: The Extended Order and Population Growth
  • The undoubted historical connection between religion and the values that have shaped and furthered our civilisation, such as the family and several property, does not of course mean that there is any intrinsic connection between religion as such and such values. Among the founders of religions over the last two thousand years, many opposed property and the family. But the only religions that have survived are those which support property and the family.
    • Ch. 8: The Extended Order and Population Growth

1990s[edit]

  • … questions about the influence of socialism are increasingly more difficult to answer as the word socialism has so many meanings. The idea that the inequalities of incomes can be greatly reduced has come to be recognized as largely impractical. Practically all endeavours at just distribution express more or less arbitrary conceptions of what is just and the central idea of Marxian socialism of a rationalisation of the means of production has been largely abandoned as technically impracticable. I believe that in general the idea of justice is more closely met by a freely competitive market than by any deliberate allocation of income to some imagined ideal of the kind.
    • December 13, 1991, quoted in Friedrich Hayek: A Biography (2001) by Alan O. Ebenstein.

Quotes about Hayek[edit]

Alphabetized by author or source
I, like … others, owe him a great debt … his powerful mind … his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society. ~ Milton Friedman

A - F[edit]

  • Alchian: Two things you [Hayek] wrote that had a personal influence on me, after your Prices and Production, were 'Individualism and Economic Order' [sic — Alchian certainly has in mind Hayek's 'Economics and Knowledge'] and 'The Use of Knowledge in Society.' These I would regard as your two best articles, best in terms of their influence on me.
    Hayek: 'Economics and Knowledge' — the '37 one — which is reprinted in the volume, is the one which marks the new look at things in my way.
    Alchian: It was new to you, too, then? Was it a change in your own thinking?
    Hayek: Yes, it was really the beginning of my looking at things in a new light. … I was aware that I was putting down things which were fairly well known in a new form, and perhaps it was the most exciting moment in my career when I saw it [i.e. 'Economics and Knowledge'] in print.
    Alchian: Well, I'm delighted to hear you say that, because I had that copy typed up to mimeograph for my students in the first course I gave here [i.e. UCLA]. And Allan Wallace … came through town one day, and I said, 'Allan, I've got a great article!" He looked at it, started to laugh, and said, "I've seen it too; it's just phenomenal!' I'm just delighted to hear you say that it was exciting, because it was to me, too … that was a very influential article, I must say.
    • Armen Alchian, interviewing Friedrich Hayek in 1978, published in Hayek's Journey : The Mind of Friedrich Hayek (2003) by Alan O. Ebenstein, p. 107.
  • The fundamental flaws in the slippery slope argument do not necessarily reduce the importance of Hayek’s overall contributions to political economy, but they surely remove a major plank and a powerful rhetorical device for classical liberals.
    • André Azevedo Alves and John Meadowcroft, "Hayek’s Slippery Slope, the Stability of the Mixed Economy and the Dynamics of Rent Seeking", Political Studies (2013).
  • The most important player on Ronald Reagan's economic team is Ronald Reagan. The person most responsible for creating the economic program that came to be known as Reaganomics is Reagan himself. For over twenty years he observed the American economy, read and studied the writings of some of the best economists in the world, including the giants of the free market economy — Ludwig von Mises, Friedrich Hayek and Milton Friedman — and he spoke and wrote on the economy, going through the rigorous mental discipline of explaining his thoughts to others. Over the years he made all the key decisions on the economic strategies he finally embraced. He always felt comfortable with his knowledge of the field and he was in command all the way.
  • [Estonian Prime Minister] Mart Laar came to my office the other day to recount his country's remarkable transformation. He described a nation of people wh are harder-working, more virtuous — yes, more virtuous, because the market punishes immorality — and more hopeful about the future than they've ever been in their history. I asked Mr. Laar where his government got the idea for these reforms. Do you know what he replied? He said, "We read Milton Friedman and F. A. Hayek".
    • Dick Armey, in his address at the dedication of the Hayek Auditorium", Cato Institution, Washington, D.C., (9 May 1995).
  • People sometimes say that they don’t know what they think until they’ve said it, you know. But mind you, even as a graduate student, I’ve never thought that utility theory implies consciousness. Of course you discover things and learn about your own preferences. This is a point that I haven’t explored and that I probably should study more. It seems especially important from the point of view of innovation. By the way, what has always bothered me about Hayek is that all this local knowledge has to be transmitted before the process of social interaction can generate any new knowledge, but he doesn’t show us how that is going to happen.
    • Kenneth Arrow, in Karen Ilsen Horn (ed.) Roads to Wisdom, Conversations With Ten Nobel Laureates in Economics (2009).
  • Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics" … I admit I wasn't familiar with Hayek and von Mises as the time. But now that I've read them, I can see that this is essentially true.
  • F. A. Hayek, probably the most prominent advocate of capitalism in the present period would not quite agree with Smith's notions of what is natural, but his defense of capitalism is indirect by reference to its linkage with liberty, and he explicitly rejected the idea that a legitimating concept of justice is relevant to the operations of a market system.
    • Peter Berger, The Capitalist Revolution : Fifty Propositions about Prosperity, Equality and Liberty (1988), p. 205.
  • It may not be amiss to seen in my calculations of comparative productivity [between entrepreneurial economics and communist economies] verification of a prescient forecast [made by Hayek in 1935 in his essay "The Present State of the Debate".].
    • Abram Bergson, "Communist Economic Efficiency Revisited", AEA Papers and Proceedings, Vol. 82, No. 2, (May 1992), p. 30.
  • Half the time I read [Hayek's The Sensory Order] with amazement at the extent of his reading and comprehension … he is right … most of the time.
    • Edwin Boring, "Elementist Going Up", The Scientific Monthly (March 1953), p. 183.
  • I feel sure that no one has done this particular kind of job [i.e. a physicalistic system of psychology, mind, and consciousness] nearly so well.
    • Edwin Boring, "Elementist Going Up", The Scientific Monthly (March 1953), p. 183.
  • I do not for a moment believe it is the last word on this matter [i.e. a physicalistic system of psychology, mind and consciousness], but it is . the best word I have ever heard spoken from this platform.
    • Edwin Boring, "Elementist Going Up", The Scientific Monthly (March 1953), p. 183.
  • What ultimately matters is not reading Hayek accurately, but instead providing a productive reading of Hayek that can improve our understanding of the principles of political economy that is relevant for us today. Hayek’s emphasis on how alternative institutional arrangements, through their properties to align incentives and utilize dispersed information, impact the choices people make, and the consequences of those choice that will be realized in social interaction provides the basis for a reinvigorated classical liberal political economy research program.
    • Peter J. Boettke, "On reading Hayek: Choice, consequences and The Road to Serfdom", European Journal of Political Economy Vol. 21 (2005).
  • The publication of two books … helped to galvanize the concerns that were beginning to emerge among intellectuals (and many others) about the implications of totalitarianism. One was James Burnham's The Managerial Revolution … [A second] Friedrich A. Hayek's The Road to Serfdom … was far more controversial — and influential. Even more than Burnham, Hayek forced into public discourse the question of the compatibility of democracy and statism. And unlike Burnham, he made no pretense of neutrality about the phenomena he described. … In responding to Burnham and Hayek … liberals were in fact responding to a powerful strain of Jeffersonian anti-statism in American political culture … The result was a subtle but important shift in liberal thinking.
    • Alan Brinkley, The End of Reform : New Deal Liberalism in Recession and War (1995).
  • My basic criticism of F. A. Hayek’s profound interpretation of modern history and his diagnoses for improvement is directed at his apparent belief or faith that social evolution will, in fact, insure the survival of efficient institutional forms. Hayek is so distrustful of man’s explicit attempts at reforming institutions that he accepts uncritically the evolutionary alternative. We may share much of Hayek’s skepticism about social and institutional reform, however, without elevating the evolutionary process to an ideal role. Reform may, indeed, be difficult, but this is no argument that its alternative is ideal.
  • I did not call him "Fritz." To me he remained always "Professor Hayek," despite his own graciousness in treating me as a peer. I shall not attempt to evaluate Professor Hayek's monumental contribution to our understanding of the events of this turbulent century, to the influence of his ideas on these events themselves or even to the development of economic theory in a strictly scientific sense.
    • James M. Buchanan, "I did not call him “Fritz”: Personal recollections of Professor F. A. v. Hayek." Constitutional Political Economy 3.2 (1992): 129-135.
  • In some of their implicit modeling of political behavior aimed at furthering special group or class interests, the Marxists seemed to be closet associates of public choice, even as they rejected methodological individualism. But how was the basic Marxist critique of politics, as observed, to be transformed into the idealized politics of the benevolent and omniscient superstate? This question was simply left glaringly unanswered. And the debates of the 1930s were considered by confused economists of the time to have been won by the socialists rather than by their opponents, Ludwig von Mises and Friedrich Hayek. Both sides, to an extent, neglected the relevance of incentives in motivating human action, including political action.
  • I did fully learn from Hayek the distinction between what I later called moral community and moral order and moral anarchy – this is about the sense that our genetic predisposition is all for the insider tribe.
    • James M. Buchanan, in Karen Ilsen Horn (ed.) Roads to Wisdom, Conversations With Ten Nobel Laureates in Economics (2009).
  • In the end, Hayek’s free society depends upon a set of wise rulers, whether they be judges, village elders, or (temporary) military dictators, who can stand in the way of an untutored democratic mass seduced by redistributive envy.
  • Hayek was no opponent of theory; indeed, he frequently defended it from its historicist detractors. But he also understood the limitations of theory.
    • Bruce Caldwell, "Hayek and Socialism", Journal of Economic Literature (December 1997).
  • Hayek is a puzzle. Certainly he started out as one for me, now some twenty-odd years ago.
    • Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek, Introduction (2004).
  • In retrospect, Hayek’s recourse to history must appear a little disingenuous: in an environment in which measured unemployment is 25 percent, public suspicions about the theories of economists would be rife even had the German historical school never existed. But Hayek hit on an important, and persistent, question. What is it about economics that so provokes the distrust of so many noneconomists, that leads otherwise intelligent people sometimes to think that economics is little more than ideology (or worse. astrology) dressed up in scientific garb? It is this kind of perception, after all, that gives rise to the many economist jokes that others crack about economists and that we have taken to telling on ourselves.
    • Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek, Chapter 14. Journey’s End—Hayek’s Multiple Legacies (2004).
  • He linked the notion of a spontaneous order that forms when agents follow (often simple) rules with the idea of complex systems in the 1950s. This was a critical breakthrough, for it allowed him to drop the old natural science-social science dichotomy ...
    • Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek, Chapter 14. Journey’s End—Hayek’s Multiple Legacies (2004).
  • Critics argue that Hayek mixed a number of ethical and political philosophies in constructing his system, positions that do not necessarily cohere one with another and all of which have been independently criticized. … There are evident tensions as well between his earlier advocacy of planning a framework of law and his later enthusiasm for the gradual evolution of judge-made common law. Finally, Hayek's opinion that judges operating under the common law tradition are bound to draw "conclusions that follow from the existing body of rules and the particular facts of the case" has struck more than one observer as naive.
    If one is judging his work against the standard of whether he provided a finished political philosophy, Hayek clearly did not succeed.
    • Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek, Chapter 14. Journey’s End—Hayek’s Multiple Legacies (2004).
  • While the reaction of political theorists has been principally critical, I think that economists may find Hayek‘s political writings useful in a number of ways. First, he provided the general insight that, if a market system is to work, it must he embedded in a set of other social institutions. … Furthermore, his are not new insights; most of the general ideas were familiar to the Scottish philosophers whom Hayek praised so often. But, such caveats aside, these ideas certainly were not the common currency of economists in the middle of the twentieth century.
    • Bruce Caldwell, Hayek's Challenge: An Intellectual Biography of F. A. Hayek, Chapter 14. Journey’s End—Hayek’s Multiple Legacies (2004).
  • Politeness in political discourse is something that has been missing from recent debates. We can learn something from Hayek in this dimension, as well.
    • Bruce Caldwell, "Hayek on Socialism and on the Welfare State", Challenge, vol. 54, no. 1, January/February 2011.
  • Chile did in fact make a transition back to democracy. We doubt that Hayek had anything to do with this, and to be sure, Pinochet did not go willingly into the dark night. But in the end, democracy was restored.
    • Bruce Caldwell and Leonidas Montes, "Friedrich Hayek and his Visits to Chile", The Review of Austrian Economics (2014).
  • I've long since lost all patience with Hayek. His original, true ideas could have been five good blog posts, his errors and bizarre obsessions are numerous, and his writing style insults every person who ever tried to write a decent sentence.
  • In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us.
    • Ronald Coase, Nobel Memorial Prize Lecture, "The Institutional Structure of Production", in Essays on Economics and Economists (1994), p. 9
  • I will be discussing what happened in economics in England, but these were times when, to a very considerable extent, this was what happened in economics. The first episode I will discuss is local, but the economists involved were among the best in the world. In February 1931, Friedrich Hayek gave a series of public lectures entitled 'Prices and Production' at the London School of Economics … They were undoubtably the most successful set of public lectures given at LSE during my time there, even surpassing the brilliant lectures Jacob Viner gave on international trade theory. The audience, notwithstanding the difficulties of understanding Hayek, was enthralled. What was said seemed to us of great importance and made us see things of which we had previously been unaware. After hearing these lectures, we knew why there was a depression. Most students of economics at LSE and many members of the staff became Hayekians or, at any rate, incorporated elements of Hayek's approach in their own thinking. With the arrogance of youth, I myself expounded the Hayekian analysis to the faculty and students at Columbia University in the fall of 1931.
    • Ronald Coase, "How Should Economists Choose?"in Essays on Economics and Economists (1994), p. 19
  • Hayek's adversaries — Oskar Lange and company — argued that a market system had to be inferior to a centrally-planned system: at the very least, a centrally-planned economy could set up internal decision-making procedures that would mimic the market, and the central planners could also adjust things to increase social welfare and account for external effects in a way that a market system could never do. Hayek, in response, argued that the functionaries of a central-planning board could never succeed, because they could never create both the incentives and the flexibility for the people-on-the-spot to exercise what Scott calls metis. Today all economists — even those who are very hostile to Hayek's other arguments … agree that Hayek and company hit this particular nail squarely on the head. Looking back at the seventy-year trajectory of Communism, it seems very clear that Hayek … [is] right: that its principal flaw is its attempt to concentrate knowledge, authority, and decision-making power at the center rather than pushing the power to act, the freedom to do so, and the incentive to act productively out to the periphery where the people-on-the-spot have the local knowledge to act effectively.
    • J. Bradford DeLong, review of Seeing Like a State : How Certain Schemes to Improve the Human Condition Have Failed (1998) by James Scott.
  • I think that there is an important difference between Friedman and Hayek. Hayek is an economic (classical) liberal but a social conservative: a believer in respect for throne and altar. Social conservative Hayek can see Pinochet as a good thing: far better to have an authoritarian state that maintains the conservative moral order, if it can be persuaded to adopt laissez-faire economics, than it is to have a democracy that regulates the economy. Friedman, by contrast, hates and fears a government that prohibits use of recreational drugs in your home almost as much as he hates and fears a government that won't let you undersell your politically-powerful competitors. For Friedman, Pinochet is a bad--an aggressive, powerful military dictator--whose evil the Chicago Boys can curb by persuading him to adopt laissez-faire policies.
  • On Hayek… in my view, there are four Hayeks, one good, and three of varying degrees of badness:
    The good Hayek of the price system as a discovery and information transmission mechanism, of the importance of entrepreneurship, and of private property and the rechstaat as guarantees of individual liberty.
    The bad Hayek who prefers Augusto Pinochet to Helmut Schmidt.
    The worse Hayek who had his head completely up his posterior on economic policy during the Great Depression.
    The worst-of-all Hayek. The one who when Keynes praises the Road to Serfdom and pronounces himself in "not just agreement, but deeply moved agreement with it" responds "no you are not!"
  • The Good Economist Hayek is the thinker who has mind-blowing insights into just why the competitive market system is such a marvelous societal device for coordinating our by now 7.2 billion-wide global division of labor. Few other economists imagined that Lenin’s centrally-planned economy behind the Iron Curtain was doomed to settle at a level of productivity 1/5 that of the capitalist industrial market economies outside. Hayek did so imagine. And Hayek had dazzling insights as to why. Explaining the thought of this Hayek requires not sociology or history of thought but rather appreciation, admiration, and respect for pure genius.
  • The Bad Economist Hayek is the thinker who was certain that Keynes had to be wrong, and that the mass unemployment of the Great Depression had to have in some mysterious way been the fault of some excessively-profligate government entity (or perhaps of those people excessively clever with money–fractional-reserve bankers, and those who claim not the natural increase of flocks but rather the interest on barren gold). Why Hayek could not see with everybody else–including Milton Friedman–that the Great Depression proved that Say’s Law was false in theory, and that aggregate demand needed to be properly and delicately managed in order to make Say’s Law true in practice is largely a mystery. Nearly everyone else did: the Lionel Robbinses and the Arthur Burnses quickly marked their beliefs to market after the Great Depression and figured out how to translate what they thought into acceptable post-World War II Keynesian language. Hayek never did.
    My hypothesis is that the explanation is theology: For Hayek, the market could never fail. For Hayek, the market could only be failed. And the only way it could be failed was if its apostles were not pure enough.
  • The human mind, Hayek says, is not just limited in its ability to synthesize a vast array of concrete facts, it is also limited in its ability to give a deductively sound ground to ethics. Here is where the tension develops, for he also wants to give a reasoned moral defense of the free market. He is an intellectual skeptic who wants to give political philosophy a secure intellectual foundation. It is thus not too surprising that what results is confused and contradictory.
    • Arthur M. Diamond, "F. A. Hayek on Constructivism and Ethics". The Journal of Libertarian Studies IV/4: 353-365.(Fall 1980).
  • George Nash rightly sees the publication of Friedrich A. von Hayek's The Road to Serfdom in 1944 as the first shot in the intellectual battle that was to turn the tide in favor of conservatism. Geoffrey Perret saw the book as "the intellectual success story of the war."
  • [Hayek's The Fatal Conceit] fully supports the recent characterization of Hayek by the Economist that he is our time's preeminent social philosopher.
  • Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history."
  • Hayek did not talk about it at the time, but his warnings about the drift toward top-down planning were perhaps most relevant of all in the so-called Third World. It is the misfortune of the field called development economics that it was born at the moment of maximum doubt about individual liberty. As a result, economists conceived of development from the beginning—and to a frightening extent still do today—as a top-down process run by development experts operating on a blank slate.
    • William Easterly, "Hayek vs. The Development Experts", October 23, 2008.
  • Hayek’s contributions are so protean in so many areas that there is now disagreement as to where he will be remembered most. Paradoxically, he may be unlikely to be remembered most as a technical economist. Hayek, indeed, emphasized that to be a good economist, one must be much more than an economist. For most of his professional career, from the 1940s through 1980s, he really became a social philosopher rather than an economist.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek had his greatest impact in the area of the division of knowledge. He first put forward his concept of the division of knowledge in his November 10, 1936, presidential address to the London Economic Club, “Economics and Knowledge.” Here he drew attention to the fact that knowledge is divided among the minds of all humanity. Economic systems that build on divided knowledge prosper. Those that attempt to centralize decision-making, on the assumption of centralized knowledge, falter. Decentralized knowledge implies decentralized decision-making.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s background in German and Viennese intellectual thought is another source of his work. While the account here can only be brief, the Germanic idealist and romantic philosophical tradition exemplified by such figures as Leibniz, Kant, Hegel, Marx, and Nietzsche was very different from the philosophical and literary heritage of the Anglo-American world. In addition, while the focus here is on German and Austrian similarities of identity, the influence of the Viennese philosopher and physicist Ernst Mach on the intellectual milieu in which Hayek grew to maturity was significant.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s early academic work was in theories of money and capital and the influences of money and capital on economic activity. He thought the primary cause of the Great Depression was a worldwide misstructuring of capital production in country after country. He thought that the U.S. Federal Reserve Board practiced an expansionary monetary policy between 1927 and 1931. He considered capital to be heterogeneous rather than homogeneous in typical quality.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s idea was that an erroneous conception of what is possible for the individual mind to create regarding societal institutions leads to the decline of the reason that is possible in social life. He called the idea that humanity can design whatever institutions it wishes “constructivism.” Hayek was in many respects a philosophical idealist, in that he believed that ideas rule the world. It was the idea of constructivism, he thought, that has such destructive consequences. If he could combat this idea, then much good would result.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • He thought that much knowledge is not verbally or explicitly known to the individual. This idea—of tacit (as opposed to explicit) knowledge—is difficult but important. It underlies to a considerable extent the idea of the entrepreneur—the individual who can make a profit but who cannot necessarily say how he does it.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s thought did not emerge in a vacuum, and part of the goal here, particularly in the early chapters, is to trace the intellectual background of his work. The dominating idea in Hayek’s early life was Darwinian evolutionary theory, stemming from his father’s and grandfather’s work in botany and biology. Hayek ended his career with an evolutionary account of the growth of civilization.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek moved from economic theory to political philosophy during the 1940s for, really, the rest of his career. This move was led by his focus on prices as guides to economic production. In time, he was led to explore the concept of prices providing information more generally and the related concept of prices transmitting information that is not known to any one person. This, in turn, led Hayek to the idea of tacit, unarticulated, and nonverbal knowledge and the role of institutions in transmitting such knowledge.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • He conceived a great treatise during the later 1930s, “The Abuse and Decline of Knowledge,” which would follow from his earlier work in knowledge and on which he worked during the early 1940s. He thought that the hubris of reason—an overestimation of what individual human reason can accomplish—results in the nemesis of the planned society through the attempt to implement this conception of reason through government.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • But if constructivism will not do, then what should replace it? This was the basic question that Hayek sought to answer during the remainder of his career as the leading political philosopher of the twentieth century. Hayek’s approach was largely Burkean. He saw much good in inherited institutions, and yet, at the same time, he also saw the desirability and necessity of change. He adopted an evolutionary interpretation of the progress of human society wherein the most economically productive laws, rules, morals, and practices come to prevail in the end through a Darwinian struggle of the greatest economic productivity among societies.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • The idea of unarticulated, nonverbal, or tacit knowledge led, in Hayek’s mind, to the further idea that legal and moral institutions store, embed, and convey tacit knowledge. Hayek considered the most important of these institutional practices to be the rule of law. The rule of law allows individuals to lead rational lives. It is because we know what others are allowed and not allowed to do that we are able to plan our lives. Where not rules but dictatorship reigns, then Hayek, following the British political philosopher Thomas Hobbes, held that the life of man in society is “solitary, poor, nasty, brutish, and short.”
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s discussion of the appropriate role of government was never really adequate, at least from a libertarian perspective. He sanctioned in principle much government activity that any democratic welfare statist could support, and he did not really consider the libertarian test for interference with the lives of others—to prevent harm to others.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Classical liberalism and libertarianism are ultimately radical creeds.They foresee worlds that have never been rather than must necessarily be (dogmatic leftists) or never were (dogmatic rightists). Hayek closed The Constitution of Liberty with the thought that he was not a conservative and that his position, that of the true or classical liberal or libertarian, was as far from conservatism as from socialism.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s views of and relationship with Karl Marx, John Stuart Mill, the Chicago school of economics, and Milton Friedman are not always fully understood. Though Hayek decried the practical outcomes of Marx’s work and his political philosophy, he had high regard for Marx as a technical economist whose work preceded his own business cycle theory. Hayek’s views of Mill fluctuated over his lifetime, from a position of relative support to one of relative opposition, though Hayek’s later opposition to Mill was largely based on misinterpretation of Mill. Hayek ultimately adopted Mill’s standard of “affect” on or “concern” for others as the right criterion to justify government action. This is a substantially more general criterion than the true libertarian one of to prevent harm to others.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • To understand Hayek’s thought best, it is perhaps best to provide some definitions. By “society,” he meant the largest communitarian organization of which individuals are a part, which includes but is broader than the state and government. The “state” is the ongoing apparatus of organized coercive relationships in a society, and “government” is the empowered directors of the state—legislative, executive, and judicial. While Hayek used “liberty” and “freedom” interchangeably, this author tends to use “liberty” for state order and “freedom” in the context of the highest human standard of living. “Social” is typically used in this book to indicate smaller-scale societal relationships, and “societal” is used to indicate larger institutions. “Information” is interpersonal data; “knowledge” is the information and understanding that an individual may possess, whether he can express it in words or not.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek started from an evolutionary perspective in the natural sciences. He ended his career with an evolutionary account of the de velopment of human civilization, wherein the societies with the most materially productive rules, laws, morals, customs, and traditions will reproduce most in the end. Societal selection operates both within and among societies, and is driven not by the selection of genetically influenced attributes but by the selection of the societal practices most conducive to economic productivity, prosperity, and peace. Hayek saw life as a competition to extend itself most, whether in the biological or the social realm.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek was at the University of Chicago from 1950 to 1962, and this was truly a decisive phase in his career. Whether he would have otherwise achieved the renown he has in the United States without his residence here or done the work he did in The Constitution of Liberty is an open question. Hayek was not close academically to the Chicago school of economics while he was at Chicago or at other times. Friedman and Hayek were close primarily through extracurricular activities, such as the Mont Pelerin Society and as advisers to students involved with the Intercollegiate Society of Individualists, and philosophically regarding the practical reform of government, rather than through academic affairs or in technical economic theory.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek’s later monetary work constitutes some of his most creative practical policy suggestions. His ideas of competing and private currencies may come into existence during coming years for technological reasons.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • His work in epistemology (theory of knowledge), psychology, and methodology (scientific or philosophical method) was among the most difficult in his corpus for the nonspecialist to appreciate. These were, however, core areas in Hayek’s canon. In particular, the ideas of tacit knowledge, unarticulated knowledge, nonverbal knowledge, spontaneous formation of social and societal institutions, spontaneous order, and prices and profits as information and knowledge communicators and indicators are vital to consider in evaluating Hayek’s work and contribution.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek thought that his psychological and philosophical studies underlay his work in optimal societal order—utopia. He believed it is necessary to understand how knowledge is generated and transmitted in order to consider optimal societal institutions. He considered the idea and practice of private property to be essential to maximal economic productivity.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek emphasized prediction in his work. It is important in theoretical work to make predictions about the future, because it is so easy to rationalize or justify the past. It is also important in scientific work to make predictions in numbers, because numbers are subject to verification. As Hayek emphasized, numerical predictions can be made in ranges.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Though Hayek chose his words very carefully, he did not emphasize the philosophy of words, if he considered it all. An idea stemming from the Vienna circle of logical positivists, a group from which Hayek dissented, is that it should be possible to achieve a pure language of communication. As Wittgenstein indicated in much of his early work, that which can be said should be able to be said clearly and precisely.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), "Introduction"
  • Hayek remarked in a paper read before the Cambridge University Moral Science Club on November 14, 1942, that he originally came to economics “thoroughly imbued with a belief in the universal validity of the methods of the natural sciences.” A way to understand Hayek’s mature thought is to recognize the extent to which he stemmed from a scientific—and, in particular, biological—background.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 1. Darwinian Evolutionary Theory
  • Hayek did not always absorb as much light as he could have from other minds. He remarked of his mature intellectual cast: “It’s very curious. I am hardly capable of restating the ideas of another person because I read and embody what I like to my own thoughts. I cannot read a book and give an account of its arguments. I can perhaps say what I have learnt from it. But that part of the argument which is not sympathetic to me, I pass over.” Indeed, he said in a 1942 lecture that this was almost philosophically his position: “If we can understand only what is similar to our own mind, it necessarily follows that we must be able to find all that we can understand in our own mind.”
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 1. Darwinian Evolutionary Theory
  • Hayek did not believe that the same sort of prediction—and therefore control—that is possible in the natural sciences is attainable in the realm of society. At best, he thought, only a “pattern” of the future can be predicted in social life. He thought that to attempt to formulate laws of societal development akin to the laws of the physical sciences, as Marx attempted, is doomed to failure.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 1. Darwinian Evolutionary Theory
  • Hayek, who was fifteen when the Great War started, recalled in his unpublished autobiographical notes that the world before the war was what he considered the normal world of his youth to be. He was always aristocratic personally. Pulitzer Prize–winning historian Barbara Tuchmann provided this optimistic glimpse of the world before the Great War: “The proud tower built up through the great age of European civilization was an edifice of grandeur and passion, of riches and beauty and dark cellars. Its inhabitants lived, as compared to a later time, with more self-reliance, more confidence, more hope; greater magnificence, extravagance and elegance; more careless ease, more gaiety, more pleasure in each other’s company and conversation, more injustice and hypocrisy, more misery and want, more sentiment including false sentiment, less sufferance of mediocrity, more dignity in work, more delight in nature, more zest. The Old World had much that has since been lost, whatever may have been gained.”
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 2. German and Viennese Intellectual Thought
  • Hayek noted the association between Germany and Austria in a remark he made on Friedrich von Wieser, his main economics professor at the University of Vienna, on Wieser’s death in 1926:“He was wholeheartedly a German and perhaps even more wholeheartedly an Austrian of the best sort.” The great philosopher from Vienna Ludwig Wittgenstein, who was Jewish and Hayek’s distant cousin (although Hayek was Catholic), remarked in his diary during service in World War I that Austria was, with Germany,“the German race,” and: “I am German through and through.” Henry Seager, a young American economist, treated Berlin and Vienna as synonymously German in an article he wrote on economics at the universities in the two cities in 1893.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 2. German and Viennese Intellectual Thought
  • I must say that I have been deeply gratified by reading a book [Hayek's "The Sensory Order"] of which I had not been aware when I wrote my little essay on group selection theory … I was deeply impressed … I recommend this book to your attention [i.e. The American Academy of Arts and Sciences], as an exercise in profound thinking by a man who simply considers knowledge for its own sake. What impressed me most is his understanding that the key to the problem of perception is to comprehend the nature of classification. Taxonomists have struggled with this problem many times, but I think von Hayek considered this problem in a broader sense.
    • Gerald Edelman, in "Through a Computer Darkly : Group Selection and Higher Brain Function", in Bulletin — The American Academy of Arts and Sciences, Vol. XXXVI, No. 1, (October 1982), p. 24.
  • [Hayek] made a quite fruitful suggestion, made contemporaneously by the psychologist Donald Hebb, that whatever kind of encounter the sensory system has with the world, a corresponding event between a particular cell in the brain and some other cell carrying the information from the outside word must result in reinforcement of the connection between those cells. These day, this is known as a Hebbian synapse, but von Hayek quite independently came upon the idea. I think the essence of his analysis still remains with us.
    • Gerald Edelman, in "Through a Computer Darkly : Group Selection and Higher Brain Function", in Bulletin — The American Academy of Arts and Sciences, Vol. XXXVI, No. 1, (October 1982), p. 25.
  • [w:Donald O. Hebb] placed the Law of Effect at the synaptic level by proposing a correlation model of synaptic modification similar to that of Hayek (1952). This work was seminal in providing a basis for many subsequent theoretical studies.
  • The investigation of this problem — How is spontaneous order possible? — is sometimes referred to as the 'Hayek programme'.
    • Jon Elster, "The Cement of Society: A Study of Social Order", 1989, p. 250.
  • I think that permanence and stability are the cardinal virtues of the legal rules that make private innovation and public progress possible. To my mind there is no doubt that a legal regime that embraced private property and freedom of contract is the only one that in practice can offer that permanence and stability … In reaching this conclusion, I have been heavily influenced by the work of Friedrich Hayek.
  • Though Hayek clearly allows for the possibility of a retreat from socialism, whether of the hot (command planning) or cold (welfare state) variety, and planning, Hayek’s critics, apparently taking Hayek at his word, use ‘inevitability’ to refer to the outcome (a totalitarian polity) that, according to Hayek, is supposedly generated by the cumulative logic inherent to interventionist policy and welfare state practices. Though taking care to note that a change in policy may occur, Hayek apparently considers the logic of intervention as primarily nudging policy in one direction, necessitating ever-further government intervention.
    • Andrew Farrant and Edward McPhail, "Hayek, Samuelson, and the logic of the mixed economy?", Journal of Economic Behavior & Organization 69 (2009).
  • Hayek frequently argued that any failure to adequately mend our ways—abandon “our” supposed infatuation with “social justice” and other “high ideals”—would inexorably put us in the hands of the devil. Arguably, “we”—Obama and company clearly included—have yet to change our ways.
    • Andrew Farrant and Edward McPhail, "Hayek’s New Popularity: The False Claims That He Was Right", Challenge, vol. 53, no. 5, September/October 2010.
  • Hayek chided the critics of the Chilean junta for their supposed sin of apparent omission: their supposed proclivity to denounce Pinochet without simultaneously roundly condemning dictatorial regimes such as the USSR and North Korea. Again, however, this is not to deny that Hayek himself does appear to provide much support for Pinochet and his economic policies: indeed, much the same charge that Hayek leveled against the international media in 1978 can be readily leveled at Hayek’s own lamentable failure to roundly condemn the legion human rights abuses of any and all dictatorial regimes.
    • Andrew Farrant, Edward McPhail, and Sebastian Berger, "Preventing the “Abuses” of Democracy: Hayek, the “Military Usurper” and Transitional Dictatorship in Chile?", American Journal of Economics and Sociology, Vol. 71, No. 3 (July, 2012).
  • Much as Hayek’s penchant for claiming that “bad” interventionist policy will ineluctably drive us along the road to serfdom—ultimately culminating in full-blown command planning and political tyranny— is clearly apparent in his 1940s writings, the very same sentiments pervade the third part of The Constitution of Liberty.
    • Andrew Farrant and Edward McPhail, "Supporters Are Wrong: Hayek Did Not Favor a Welfare State", Challenge, vol. 55, no. 5, September/October 2012.
  • Discussion of Hayek’s defense of transitional dictatorship tends to focus, rather narrowly, on his attitude toward the Pinochet regime per se. We have shown that Hayek’s assessment of transitional dictatorial power long predates Pinochet’s military coup in Chile.
    • Andrew Farrant and Edward McPhail, "Can a Dictator Turn a Constitution into a Can-opener? F.A. Hayek and the Alchemy of Transitional Dictatorship in Chile", Review of Political Economy (2014).
  • Currency competition and free banking might increase the efficiency of the financial system, and bring some small triangle welfare gains. But the key question is whether their adoption would improve macroeconomic performance. Even though Salin argues (p. 281) that ‘the best system is that which produces the least inflation’, fluctuations in output are also expensive.
    Hayek states that the adoption of his proposal would end recessions. There is absolutely no reason to believe that. Nineteenth century history is evidence that free banking and currency issue, in the wrong legal and regulatory framework, can produce rather than reduce instability. The proponents of free banking and currency issue in this volume do not go much beyond a general belief in competition in justifying their views; they have certainly not explored the necessary legal and regulatory environment in any detail.
    • Stanley Fischer, "Friedman versus hayek on private money: Review essay" (1986).
  • Over the years, I have again and again asked fellow believers in a free society how they managed to escape the contagion of their collectivist intellectual environment. No name has been mentioned more often as the source of enlightenment and understanding than Friedrich Hayek's … I, like the others, owe him a great debt … his powerful mind … his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society.
  • I approve of Professor Hayek’s proposal to remove restrictions on the issuance of private moneys to compete with government moneys. But I do not share his belief about the outcome. Private moneys now exist—traveler’s and cashier’s checks, bank deposits, money orders, and various forms of bank drafts and negotiable instruments. But these are almost all claims on a specified number of units of government currency (of dollars or pounds or francs or marks). Currently, they are subject to government regulation and control. But even if such regulations and controls were entirely eliminated, the advantage of a single national currency unit buttressed by long tradition will, I suspect, serve to prevent any other type of private currency unit from seriously challenging the dominant government currency, and this despite the high degree of monetary variability many countries have experienced over recent decades.
  • The element of paradox arises particularly with respect to the views of Hayek [see especially Hayek (1979, vol. 3)]. His latest works have been devoted to explaining how gradual cultural evolution - a widespread invisible hand process - produces institutions and social arrangements that are far superior to those that are deliberately constructed by explicit human design. Yet he recommends in his recent publications on competitive currencies replacing the results of such an invisible hand process by a deliberate construct - the introduction of currency competition.
    This paradox affects us all. On the one hand, we are observers of the forces shaping society; on the other, we are participants and want ourselves to shape society.
    • Milton Friedman and Anna J. Schwartz, "Has Government Any Role in Money?" (1986).
  • I think the Adam Smith role was played in this cycle by Friedrich Hayek's The Road to Serfdom.
    • Milton Friedman, on a shift toward emphasis on greater reliance on markets rather than government, in an interview in Forbes Vol. 142 (1988).
  • My interest in public policy and political philosophy was rather casual before I joined the faculty of the University of Chicago. Informal discussions with colleagues and friends stimulated a greater interest, which was reinforced by Friedrich Hayek's powerful book The Road to Serfdom, by my attendance at the first meeting of the Mont Pelerin Society in 1947, and by discussions with Hayek after he joined the university faculty in 1950. In addition, Hayek attracted an exceptionally able group of students who were dedicated to a libertarian ideology. They started a student publication, The New Individualist Review, which was the outstanding libertarian journal of opinion for some years. I served as an adviser to the journal and published a number of articles in it.
    • Milton Friedman, Two Lucky People : Memoirs" (1998) by Milton and Rose Friedman, p. 333
  • There is no figure who had more of an influence, no person had more of an influence on the intellectuals behind the Iron Curtain than Friedrich Hayek. His books were translated and published by the underground and black market editions, read widely, and undoubtedly influenced the climate of opinion that ultimately brought about the collapse of the Soviet Union.
  • Let me emphasize, I am an enormous admirer of Hayek, but not for his economics. I think Prices and Production is a very flawed book. I think his capital theory book is unreadable. On the other hand, The Road to Serfdom is one of the great books of our time. His writings in [political theory] are magnificient, and I have nothing but great adimiration for them. I really believe that he found his right vocation — his right specialization — with The Road to Serfdom.
    • Milton Friedman, quoted in Alan O. Ebenstein's Friedrich Hayek: A Biography (2001).
  • The first proponent of cortical memory networks on a major scale was neither a neuroscientist nor a computer scientist but … a Viennes economist: Friedrich von Hayek (1899-1992). A man of exceptionally broad knowledge and profound insight into the operation of complex systems, Hayek applied such insight with remarkable success to economics (Nobel Prize, 1974), sociology, political science, jurisprudence, evolutionary theory, psychology, and brain science (Hayek, 1952)."
    • Joaquin Fuster, Memory in the Cerebral Cortex : An Empirical Approach to Neural Networks in the Human and Nonhuman Primate (1995), p. 87
  • The main reasons for dwelling … on Hayek's model is simply that it has certain properties, absent from most others, that conform exceptionally well to recent neurobiological evidence on memory and that make it particularly suited to the current discourse."
    • Joaquin Fuster, Memory in the Cerebral Cortex : An Empirical Approach to Neural Networks in the Human and Nonhuman Primate (1995), p. 89.
  • It is truly amazing that, with much less neuroscientific knowledge available, Hayek's model comes closer, in some respects, to being neurophysiologically verifiable than those models developed 50 to 60 years after his."
    • Joaquin Fuster, Memory in the Cerebral Cortex : An Empirical Approach to Neural Networks in the Human and Nonhuman Primate (1995), p. 89.
  • Friedrich Hayek … seems to have been the first to postulate what is the core of this paper, namely, the idea of memory and perception represented in widely distributed networks of interconnected cortical cells. Subsequently this idea has received theoretical support, however tangential, from the fields of cognitive psychology, connectionism and artificial intelligence. Empirically, it is well supported by the physiological study and neuroimaging of working memory.
    • Joaquin Fuster, "Network Memory", Trends in Neuroscience, Vol. 20, No. 10 (October 1997), 451.

G - L[edit]

  • The [seminar in economic theory conducted by Hayek at the L.S.E. in the 1930s] was attended, it came to seem, by all of the economists of my generation — Nicky [Kaldor], Thomas Balogh, L. K. Jah, Paul Rosenstein-Rodan, the list could be indefinitely extended. The urge to participate (and correct Hayek) was ruthlessly competitive.
    • John Kenneth Galbraith, in "Nicholas Kaldor Remembered", in "Nicholas Kaldor and Mainstream Economics: Confrontation or Convergence?"
  • Sixty-two years ago I spent a year in what is known at Harvard as the other Cambridge. It was then in the high pulse of the Keynesian Revolution. Economic discussion was constant, intense, but London also called; once a week I came up to seminars here at the London School of Economics. A major attraction was Friedrich von Hayek, the noted conservative, author of “A Road to Serfdom,” his widely read analysis of the disastrous but emerging welfare state. He, however, was only slightly heard. The two hours were given over, all but exclusively, to telling him he was wrong. I found myself in support of this correction; it was education by the rebuke of error. (I trust that will not be the tendency on this pleasant and, for me, nostalgic occasion.) Over the years I’ve often presented myself to ardent conservatives as a student of von Hayek; it has added in an agreeable way to their normal confusion.
    • John Kenneth Galbraith, “The Unfinished Business of the Century” (1999).
  • I think the world of both Keynes and Hayek, the former as a wise practitioner whose economic theory is completely ridiculous (it took Hicks, Samuelson, and other serious economists to "make sense" of Keynes' impenetrable prose---"make sense" not by clarification of Keynes' ideas, but rather by offering an alternative analytical framework in which underemployment equilibrium is possible), and the latter as brilliant intellectual who was almost destroyed (despite his Nobel prize) by his adherence to the bizarre and irrelevant doctrines of the Austrian school, whose economic theory was dogmatically dictated by its paranoid fear of state intervention.
  • 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.
  • No-one who knows Hayek's work can doubt that his attempt to restate liberal principles in a form appropriate to the circumstances and temper of the twentieth century has yielded a body of insights wholly comparable in profundity and power with those of his forebears in the classical liberal tradition.
  • At the time of his death, F. A. Hayek was unquestionably the world's preeminent spokesman for classical liberalism and its most important thinker.
    • Ronald Hamowy, "F. A. Hayek, on the Occasion of the Centenary of his Birth", in Cato Journal, Vol. 9, No. 2. (Fall 1999).
  • I have noted above that Hayek is incredibly skimpy about the nature and character of this "road to serfdom" which all modern democracies are on, … Thus we may infer that Alexander Hamilton, who introduced our protective tariff system, was our first socialist starting us down the road to serfdom. Hayek, I hasten to add, does not cite Hamilton, but he does cite Bismarck's adoption of protectionism in 1879 as an early milepost down the road to Nazism. …
    This kind of writing is not scholarship. It is seeing hobgoblins under every bed.
    • Alvin Hansen, "Hayek's "Road to Serfdom"", The New Republic, January 1, 1945.
  • There were two explanations, and one is that in Hayek and Friedman you had an absolutely marvelous cast—two people, one very bouncy and saucy and cheeky and outspoken, vigorous. This is Friedman. He was always bouncing out with ideas; sometimes they were a bit farfetched. Then you had Hayek, this very correct and rather serious, portly, gracious, slow, rather ponderous-speaking, sometimes thinking what his next sentence is going to be. And they were men unruled by any ambition, not trying to create a party, to get elected, to win votes—any of that. It was an amazing success of upright men of integrity, intellectual brilliance, not flashy, but very impressive to watch them performing over a wide range of topics.
  • "I can date my own personal 'revolution' rather exactly to May or June 1933. It was like this. It began … with Hayek. His "Prices and Production" is one of the influences that can be detected in The Theory of Wages; it could not have been otherwise, for 1931 was a Prices and Production year at the London School of Economics … I did not in fact find it all easy to fit in whith my own ideas. What started me off in 1933 was an earlier work of Hayek's, his paper on 'Intertemporal Equilibrium', an idea which I found easier to reduce to my preferred (Paretian or Wicksellian) pattern.
    • John Hicks, The Theory of Wages, 2nd Edition (1963), p. 307.
  • I remember Robbins asking me if I could turn the Hayek model into mathematics … it began to dawn on me that … the model must be better specified. It was claimed that, if there were no monetary disturbance, the system would remain in 'equilibrium'. What could such an equilibrium mean? This, as it turned out, was a very deep question; I could do no more, in 1932, than make a start at answering it. I began by looking at what had been said by … Pareto and Wicksell. Their equilibrium was a static equilibrium, in which neither prices nor outputs were changing … That, clearly, would not do for Hayek. His 'equilibrium' must be progressive equilibrium, in which real wages, in particular, would be rising, so relative prices could not remain unchange … The next step in my thinking, was … equilibrium with perfect foresight. Investment of capital, to yield its fruit in the future, must be based on expectations, of opportunities in the future. When I put this to Hayek, he told me that this was indeed the direction in which he had been thinking. Hayek gave me a copy of a paper on 'intertemporal equilibrium', which he had written some years before his arrival in London; the conditions for a perfect foresight equilibrium were there set out in a very sophisticated manner.
    • John Hicks, Money, Interest and Wages (1982), p. 6.
  • It was from Hayek that I began.
    • John Hicks, Money, Interest and Wages (1982), p. 28; on his "Equilibrium and the Cycle" (1933), an influential work on the topics of intertemporal equilibrium, monetary theory, and trade cycle phenomena.
  • It is not so well known that it [Keynes's and my own move from thinking in terms of price-levels and the rate of interest to thinking in terms of inputs and outputs] is matched by a movement from Hayek to Harrod. I once asked Harrod what had put him on to the construction of his so-call 'dynamic' theory; he said, to my surprise, that it was thinking about Hayek.
    • John Hicks, Money, Interest and Wages (1982), p. 340.
  • Hayek was making us think of the productive process as a process in time, inputs coming before outputs.
    • John Hicks, Classics and Moderns (1983), p. 359.
  • I did not begin from Keynes: I began from Pareto, and Hayek (footnote 10: There is evidence for this, in the paper 'Equilibrium and the Cycle')
    • John Hicks, Classics and Moderns (1983), p. 359.
  • There were four years, 1931-1935, when I was myself a member of [Hayek's] seminar in London; it has left a deep mark on my thinking. … At the end of the discussions in that seminar … we were, I believe, on the point of taking what now seems to me to be a decisive step. I was, at least, on the point of taking it myself. There is evidence for that in my "Value and Capital", much of the groundwork for which was done before I left London.
  • Since I shall be indicating my disagreement with some of the points made by Professor IsraelKirzner, let me stress that I am in complete sympathy with his point of departure, namely, the emphasis on the dispersion of information among economic decision-making units (called by him, "Hayek's knowledge problem") and the consequent problem of transmission of information among those units.
    Much of my own research work since the 1950s has been focused on issued in welfare economics viewed from an informational perspective. The ideas of Hayek (whose classes at the London School of Economics I attended during the academic year 1938-39) have played a major role in influencing my thinking and have been so acknowledged.
    • Leonid Hurwicz, in "Economic Planning and the Knowledge Problem" : A Comment" in Cato Journal Vol. 4, (Fall 1984), p. 419
  • [Hayek] did contribute toward an important conceptual development in his reflections on the problems raised by extending the analysis of equilibrium in time. In a key article of 1928 published in the 'Weltwirtschafliches Archiv,' he observed that it was not possible to ignore the element of time in the simultaneous determination of prices if analysis was to be extended to monetary phenomena. {quotes Hayek} Hayek defined the problem concisely as one of an intertemporal system of prices. {quotes Hayek}.
    • Bruna Ingrao & Giorgio Israel, The Invisible Hand: Economic Equilibrium in the History of Science, 1990, p. 232.
  • Hayek made a suggestion that was to be of great importance in the theory's [i.e. General Equilibrium Theory or 'GET'] subsequent history, that the same goods available at two different moments of time should be treated as distinct goods whose relations of exchange were to be examined, although they might, 'technically speaking,' be one and the same product.
    • Bruna Ingrao & Giorgio Israel, "The Invisible Hand: Economic Equilibrium in the History of Science", 1990, p. 232).
  • [Hayek's] equilibrium theory offered a wealth of suggestions that were to be taken up in the literature of the 1940s and 1950s. The idea of intertemporal equilibrium, which was to be precisely defined in axiomatic terms by Arrow and Debreu, took shape in his writings of the 1920s and 1930s.
    • Bruna Ingrao & Giorgio Israel, The Invisible Hand: Economic Equilibrium in the History of Science, 1990, p. 233.
  • Although Hayek did not provide any formalization of his theories, his equilibrium theory offered a wealth of suggestions that were to be taken up in the literature of the 1940s and 1950s. The ideas of intertemporal equilibrium, which was to be precisely defined in axiomatic terms by Arrow and Debreu, took shape in his writings of the 1920s and 1930s.
    • Bruna Ingrao and Giorgio Israel, in The Invisible Hand : Economic Equilibrium in the History of Science (1990), p. 233.
  • Hicks elaborated the concept of temporary equilibrium, perhaps the most original contribution of "Value and Capital", following the path laid down by Hayek and the Swedish school.
    • Bruna Ingrao and Giorgio Israel, in The Invisible Hand : Economic Equilibrium in the History of Science (1990), p. 239.
  • If Hayek believes that the spending of newly-printed currency on employment and consumption will worsen our current terrible depression, then Hayek is a nut.
  • Very few people these days know the works of the Mises-Hayek school; unfortunately, I am old enough to have been an early follower of Professor Hayek, and even translated one of his books, and there is nothing like having to translate a book, particularly from the German language, to force you to come to grips with an argument.
  • My later years at L.S.E. in the 1930s were not altogether happy. Though the place never lacked intellectual stimulus – and there was plenty of opportunity to expound one’s views in Lionel Robbins’ weekly seminars – I felt out on a limb as an early and enthusiastic supporter of Keynes, and out of sympathy with the rigid neo-classicism of Robbins, Hayek and most of the senior members of the economics department.
    • Nicolas Kaldor, "General introduction to Collected Economic Papers", in Essays on Value and Distribution 2nd ed. (1980).
  • The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45, and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam.
    • John Maynard Keynes, Collected Works, vol. XII on Hayek's Prices and Production (1931); Hayek provided historical background up to page 45, after that came his theoretical model.
  • I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart Mill's well-known dictum that "there cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money," which he expresses admirably in the following passage from his last lecture: "it means also that the task of monetary theory is a much wider one than is commonly assumed; that its task is nothing less than to cover a second time the whole field which is treated by pure theory under the assumption of barter, and to investigate what changes in the conclusions of pure theory are made necessary by the introduction of indirect exchange. The first step towards a solution of this problem is to release monetary theory from the bonds which a too narrow conception of its task has created."
    • John Maynard Keynes, "The Pure Theory of Money : A Reply to Dr. Hayek" § IV, in Economica (November 1931), p. 395.
  • In my opinion it is a grand book … Morally and philosophically I find myself in agreement with virtually the whole of it: and not only in agreement with it, but in deeply moved agreement.
  • I should... conclude rather differently. I should say that what we want is not no planning, or even less planning, indeed I should say we almost certainly want more. But the planning should take place in a community in which as many people as possible, both leaders and followers wholly share your own moral position. Moderate planning will be safe enough if those carrying it out are rightly oriented in their own minds and hearts to the moral issue.
  • I was 25 years old and pursuing my doctorate in economics when I was allowed to spend six months of post-graduate studies in Naples, Italy. I read the Western economic textbooks and also the more general work of people like Hayek. By the time I returned to Czechoslovakia, I had an understanding of the principles of the market. In 1968, I was glad at the political liberalism of the Dubcek Prague Spring, but was very critical of the Third Way they pursued in economics.
    • Václav Klaus, "No Third Way Out: Creating a Capitalist Czechoslovakia" in Reason (June 1990), p. 28.
  • What is becoming a scarce resource is any sense of the significance of this welter of information. We are losing the sense of what matters, of the habits of mind that can identify problems and learn from mistakes. Some of this can be traced to a loss of context; abstract ideas are not easily conveyed absent a recognisable embodiment, and the subtext, that which is not said, may be missing. Hayek’s quarrels with Aristotle are of the same character as his conversations with Sir Karl Popper and Milton Friedman: the welcome criticism of peers, those who can recognise the same premisses needed to define a given problem, however they may come to differ over their conclusions. Only now do we begin to realise that something valuable may have been driven from the world when the continuity and tradition of Western civilisation was shattered in the same blows that destroyed unwanted empires. Now in Eastern Europe there is nostalgic talk of the good old days under the Hapsburg empire.
    The evolution of knowledge is inseparable from the evolution of language, and something invaluable is lost when ‘sound bytes’ replace the human voice, heard in face-to-face discussion of mutual concerns. Inflection counts for much, and what is not said can only be recognised when allusion and irony are possible. So Vienna waltzes.
    • Stephen Kresge, "Introduction" in F. A. Hayek, The Trend of Economic Thinking (1991).
  • The most intelligent defender of capitalism today … who has as fine and as powerful a mind as is to be found anywhere.
    • Irving Kristol, in "When Virtue Loses All Her Loveliness" — Some Reflections on Capitalism and "The Free Society" in The Public Interest (1970), and Capitalism Today (1971).
  • It is in good part because of Professor Hayek's work in this area [on the ideological origins of "social engineering" and "scientism"], and also because of his profound insights — most notably in The Constitution of Liberty — into the connection between a free market, the rule of law, and individual liberty, that you don't hear professors saying today, as they used so glibly to say, that "we are all socialists now".
    • Irving Kristol, Neoconservatism : The Autobiography of an Idea (1995), Ch. 9 : Capitalism, Socialism, and Nihilism, p. 93.
  • As a result of the efforts of Hayek, Friedman, and the many others who share their general outlook, the idea of a centrally planned and centrally administered economy, so popular in the 1930s and early 1940s, has been discredited.
    • Irving Kristol, Neoconservatism : The Autobiography of an Idea (1995), Ch. 9 : Capitalism, Socialism, and Nihilism, p. 93.
  • Hayek has as fine and as powerful a mind as is to be found anywhere, and [his] "Constitution of Liberty" is one of the most thoughtful works of the last decades.
  • It is in good part because of Professor Hayek's work [on the topic of social engineering], and also because of his profound insights — most notably in "The Constitution of Liberty" — into the connection between a free market, the rule of law, and individual liberty, that you don't hear professors saying today, as they used so glibly to say, that 'we are all socialists now.
  • The central dilemma of Hayek's political philosophy is, given his view of the limited role reason can play in social life, how is it possible to mount a systematic defence of liberalism without falling victim to the very kinds of rationalism he criticises? This difficulty stays unresolved in Hayek’s political thought because it is informed by two incompatible assumptions about what reason can achieve.
    • Chandran Kukathas, Hayek and Modern Liberalism (1990).
  • Friedrich Hayek is the twentieth-century social theorist who, probably more than any other, found himself vindicated by events — if not wholly, then at least in his central contention. He is also the one who, more than any other, himself exercised a significant political influence.
    • Michael Lessnoff, in "Political Philosophers of the Twentieth Century" (1999), p. 146
  • Many economists have professed to analyze information; relatively few have considered carefully the problems of knowledge. Among those who have, Hayek is pre-eminent.
    • Brian Loasby, "The Mind and Method of the Economist", London: Edward Elgar, p. 38.
  • Although he is very probably unaware of this book and of my work in general, I want to express a very belated thanks to Friedrich A. Hayek. His work had much more of an influence on me than I realized during the writing of the First Edition [of "The End of Liberalism"] I neither began nor ended as a Hayekist but instead found myself confirming, by process of elimination and discovery, many of his fears about the modern liberal state.
    • Theodore J. Lowi, 'Preface to the Second Edition', in The End of Liberalism (1979), 2nd Edition, p. xiv,
  • It is likely that many modern economists would have no difficulty accepting Hayek's statement of the problem (of macroeconomics) as roughly equivalent to their own. Whether or not this is so, I wish … to argue that it should be so, or that the most rapid progress toward a coherent and useful aggregate economic theory will result from the acceptance of the problem statement as advanced by [Hayek].
    • Robert Lucas, Jr., in "Understanding Business Cycles", in Studies in Business-Cycle Theory (1981), p. 216

M - R[edit]

  • One of the most original and most important ideas advanced by Hayek is the role of the "division of knowledge" in economic society … [But if] I had to single out the area in which Hayek's contributions were the most fundamental and pathbreaking, I would cast my vote for the theory of capital. As I said before, when I reviewed Hayek's book on The Pure Theory of Capital, it is "my sincere conviction that this work contains some of the most penetrating thoughts on the subject that have ever been published." If two achievements may be named, I would add Hayek's contributions to the the theory of economic planning. Most of what has been written on systems analysis, computerized data processing, simulation of market processes, and other techniques of decision-making without the aid of competitive markets, appears shallow and superficial in the light of Hayek's analysis of the 'division of knowledge', its dispersion among masses of people. Information in the minds of millions of people is not available to any central body or any group of decision-makers who have to determine prices, employment, production, and investment but do not have the signals provided by a competitive market mechanism. Most plans for economic reform in the socialist countries seem to be coming closer to the realization that increasing decentralization of decision-making is needed to solve the problems of rational economic planning.
    • Fritz Machlup, in "Hayek's Contribution to Economics", Swedish Journal of Economics, Vol. 76, (December 1974).
  • Hayek’s view that liberty was only instrumentally valuable, and his resultant rejection of a rights-based approach, left him with no basis on which to demarcate the legitimate actions of the state.
    • John Meadowcroft and William Ruger, "Hayek, Friedman, and Buchanan: On Public Life, Chile, and the Relationship between Liberty and Democracy", Review of Political Economy (2014).
  • Q. [McCallum] … are there other economists who have had a really major influence on your thinking? A. [Melzer] Well I mentioned Hayek. There are two ways. One is because of my interest in political economy. The other way is that Hayek was a pioneer in the use of information in economics. One of the papers that Karl and I wrote together that I continue to like was a paper called "The Uses of Money". In that paper we tried to incorporate information and the cost of information to explain why people use money. One of Hayek's most basic ideas is that institutions are a way of reducing uncertainty. Man struggles to find institutional arrangements which on average make life a bit more predictable. Our "Uses of Money" is not so much about money as we conventionally think about it, it's about the idea of a medium of exchange, the function of an institution called the medium of exchange and how the medium of exchange as an institution resolves a part of peoples uncertainty about the future.
  • All of this, of course, establishes Hayek's primacy over Hicks in the origin of the notion of intertemporal equilibrium.
    • Murry Milgate, in Capital and Employment : A Study of Keynes's Economics (1982), p. 132.
  • If the central contest of the twentieth century has pitted capitalism against socialism, then F. A. Hayek has been its central figure. He helped us to understand why capitalism won by a knockout. It was Hayek who elaborated the basic argument demonstrating that central planning was nothing else but an impoverishing fantasy.
    • Kenneth Minogue, "Giants Refreshed II: The Escape from Serfdom: Friedrich von Hayek and the Restoration of Liberty" in Times Literary Supplement (14 January 2000), p. 11.
  • The dilemma of a socialized system is that the information flow overwhelms a centralized system if it is open to new ideas and data, that closing the system and forcing the plan to work forecloses alternatives and risks unhedged mistakes, and that decentralizing without real markets poses the problems discussed by Hayek. These information problems permeate virtually all economic processes.
  • Hayek stressed the danger of hubris, of thinking you know more than you do, of imposing your idea of the world on others, and the importance of letting those closest to a problem use their local, tacit knowledge to help resolve it. He should have done the same here: he should have let the Chileans determine the level of their government’s involvement in economic life, using their own democratic means, even if that meant going further along the road towards socialism than he would have preferred.
    • Guinevere Nell, "The Alchemy of the Can Opener: How an Austrian Economist Found Himself Supporting Dictatorial Imposition of a Liberal Order", Review of Political Economy (2014).
  • Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market. (footnote 4: The original contributions were those of Hayek (1937 and 1945)).
    • Douglass North, in "Structure and Change in Economic History" (1981), p. 36
  • Regarding social order, Fukuyama writes, "The systematic study of how order, and thus social capital, can emerge in spontaneous and decentralized fashion is one of the most important intellectual developments of the late twentieth century." He correctly attributes the modern origins of this argument to F.A. Hayek, whose pioneering contributions to cognitive science, the study of cultural evolution, and the dynamics of social change put him in the forefront of the most creative scholars of the 20th century. But Hayek's views about the "spontaneity" of social order remain controversial. In their extreme form, they imply that all deliberate efforts to manipulate social order — social engineering — are doomed to failure because the complex nature of our cultural heritage makes a complete understanding of the human condition impossible.
    Hayek was certainly correct that we have, at best, a very imperfect understanding of the human landscape, but "spontaneous" it is not. What distinguishes human evolution from the Darwinian model is the intentionality of the players. The mechanism of variation in evolutionary theory (mutation) is not informed by beliefs about eventual consequences. In contrast, human evolution is guided by the perceptions of the players; their choices (decisions) are made in the light of the theories the actors have, which provide expectations about outcomes.
  • I was very flattered when I once got a note from Hayek saying that he would like to come and talk with me. He had read The Rise of the Western World, and he thought it was a very interesting book. He came to Seattle and spent two days with me. We had a good time and I really enjoyed him. But I wish I had known then what I have learned since, so that I could have appreciated his visit more appropriately. I had never read his stuff on cognitive science in those days. He still seems to me the greatest economist of the twentieth century, and by a long way. If you look for people who really want to try and understand the world, Hayek came closer to that ideal than anybody who has ever lived.
    • Douglass North, in Karen Ilsen Horn (ed.) Roads to Wisdom, Conversations With Ten Nobel Laureates in Economics (2009).
  • While in graduate school I encountered the writings of Friedrich Hayek and Ludwig von Mises, which shook me out of my then socialist beliefs. There was Hayek's book of essays, Individualism and Economic Order, and Mises's wide-ranging and unsettling Socialism, which showed me I had not thought through any details — economic, social or cultural — of how socialism would work. One of their arguments in particular, about the impossibility of rational economic calculation under socialism, dumbfounded me. Whether or not the argument was ultimately judged to be correct, it was amazing, something I never would have thought of in a million years.
    • Robert Nozick, as quoted in "Robert Nozick" in The Harvard Guide to Influential Books : 113 Distinguished Harvard Professors Discuss the Books That Have Helped to Shape Their Thinking (1986), p. 187
  • Professor Hayek is also probably right in saying that in this country the intellectuals are more totalitarian-minded than the common people. But he does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.
    • George Orwell, Review by Orwell: The Road to Serfdom by F.A. Hayek / The Mirror of the Past by K. Zilliacus, Observer, 9 April 1944.
  • Arguably the most influential economist of this century.
    • Tom Peters, as quoted in The American Scholar (1994), p. 324.
  • I can testify from personal experience to the immense stimulus and direction which Hayek's migration to this country [Great Britain] gave to economic research in the 1930s, not only in London and economics faculties throughout the United Kingdom, but also in the international world of scholarship.
    • Arnold Plant, in "A Tribute to Hayek — the Rational Persuader" in Economic Age (January-February 1970).
  • I think that I have learned more from you than from any other living thinker, except perhaps Alfred Tarski … but not even excepting Russell.
  • Another colleague had also prepared a paper arguing that the middle way was the pragmatic path for the Conservative party to take … Before he had finished speaking to his paper, the new Party Leader [Margaret Thatcher] reached into her briefcase and took out a book. It was Friedrich von Hayek's "The Constitution of Liberty". Interrupting [the speaker], 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.
    • John Ranelagh, on Thatcher's remarks at a key Conservative Party meeting in the late 1970's, in Thatcher's People : An Insider's Account of the Politics, the Power, and the Personalities (1991).
  • Well … I've always been a voracious reader — I have read the economic views of von Mises and Hayek, and … Bastiat … I know about Cobden and Bright in England — and the elimination of the corn laws and so forth, the great burst of economy or prosperity for England that followed.
    • Ronald Reagan, in response to the question "What philosophical thinkers or writers most influenced your conduct as a leader, as a person?" when interviewed by Rowland Evan, in The Reagan Revolution (1981) by Rowland Evans and Robert Novak, p. 229
  • Professor Mises and Dr. Hayek have advanced theories which, though they fall into the general category of monetary explanations, yet seem altogether free from those deficiencies which have marked monetary explanations in general. They explain the effects of fluctuations in the supply of money not so much in terms of fluctuations of the general price level as in terms of fluctuations of relative prices and the consequent effects on what may be called the ‘time-structure’ of production.
    • Lionel Robbins, Foreword to the First Edition of Price and Production (1931).
  • Professor Hayek is justifiably critical of some contemporary arrangements regarding old age pensions and apprehensive of the difficulties which may arise should the burden be greatly increased. But why should he argue as if these were at all likely to lead us to social disintegration and the concentration camp? This seems to me to be one of the less probable outcomes of the evolution of our institutions in this respect.
    • Lionel Robbins, “Hayek on Liberty.” Economica 28: 66–81 (1961).
  • I very well remember Hayek's visit to Cambridge on his way to the London School. He expounded his theory and covered a black-board with his triangles. The whole argument, as we could see later, consisted in confusing the current rate of investment with the total stock of capital goods, but we could not make it out at the time.
    • Joan Robinson, Contributions to Modern Economics, Chapter 1, p. 2.
  • Hayek's criticisms of market socialism … are for the most part on the mark.
  • While often right and enormously influential, Hayek himself agreed that some of his predictions did not become true.
    • J. Barkley Rosser, "The Road to Serfdom and the world economy: 60 years later", European Journal of Political Economy Vol. 21 (2005).
  • Hayek and Nozick both think that talk of distributive justice is misleading, because it suggests the presence of a distributing person or mechanism; in a developed economy there is no such thing, and in a free society, the attempt to institute such a thing would destroy all freedom. Hayek, however, supports this view with an account of the computational impossibility of deciding what to produce and dis tribute in order to achieve justice, while Nozick is more concerned to emphasize that the state has no right to seize the resources of individuals in order to distribute them according to any principle whatever.
    • Introduction in Justice (1993) edited by Alan Ryan.

S - Z[edit]

  • Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness.
    • Jeffrey D. Sachs, "Welfare States, Beyond Ideology", Scientific American 295, 42 (2006).
  • Libertarians are not just bad emotional cripples. They are also bad advice givers. I refer of course to the views of both Milton Friedman and Friedrich Hayek. The “serfdom” they warn against is not that of Genghis Khan or Lenin-Stalin-Mao or Hitler-Mussolini. Rather, they warn against the centrist states of the modern world. Think only of Switzerland, Britain, the US, the Scandinavian countries, and the Pacific Rim. Why do citizenries there report high indexes of “happiness” and enjoy broad freedoms of speech and belief?
    • Paul A. Samuelson, “The Dynamic Moving Center.” Spiegel Online International, November 12, 2008.
  • The Hayek I met on various occasions – at the LSE, at the University of Chicago, in Stockholm (1945), at Lake Constance-Lindau Nobel summer conferences – definitely bemoaned progressive income taxation, state-provided medical care and retirement pensions, fiat currencies remote from gold and subject to discretionary policy decisions by central bank and treasury agents.
    • Paul A. Samuelson, "A few remembrances of Friedrich von Hayek (1899–1992)", Journal of Economic Behavior & Organization 69 (2009).
  • No one has characterized market mechanisms better than Friedrich von Hayek.
    • Herbert Simon in "The Sciences of the Artificial" (1981), p. 41
  • 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, in "Hayek's Road Comes to an End" (3 April 1992).
  • [Hayek] became [in his later years] the dominant intellectual influence of the last quarter of the twentieth century.
    • Robert Skidelsky, in a review of Hayek: The Iron Cage of Liberty in The Times Literary Supplement (20 September 1996).
  • Hayek, in my view, is the leading economic thinker of the 20th century.
    • Vernon L. Smith, in "Reflections on Human Action after 50 years", in Cato Journal, Vol. 9, No. 2. (Fall 1999).
  • I first had to discover certain things for myself, and essentially it was the behavior I observed in human subjects in my laboratory study of markets that motivated me eventually to study Hayek seriously. Reading with the eyes of a new mind, I was able to appreciate an enormous depth of understanding in the work of Hayek that would have escaped me if I had not had this personal experience in the laboratory.
    • Vernon L. Smith, "Hayek and experimental economics", The Review of Austrian Economics (2005).
  • The source of confusion here is that there was a Good Hayek and a Bad Hayek. The Good Hayek was a serious scholar who was particularly interested in the role of knowledge in the economy (and in the rest of society). Since knowledge—about technological possibilities, about citizens’ preferences, about the interconnections of these, about still more—is inevitably and thoroughly decentralized, the centralization of decisions is bound to generate errors and then fail to correct them. The consequences for society can be calamitous, as the history of central planning confirms. That is where markets come in. All economists know that a system of competitive markets is a remarkably efficient way to aggregate all that knowledge while preserving decentralization.
    But the Good Hayek also knew that unrestricted laissez-faire is unworkable. It has serious defects: successful actors reach for monopoly power, and some of them succeed in grasping it; better-informed actors can exploit the relatively ignorant, creating an inefficiency in the process; the resulting distribution of income may be grossly unequal and widely perceived as intolerably unfair; industrial market economies have been vulnerable to excessively long episodes of unemployment and underutilized capacity, not accidentally but intrinsically; environmental damage is encouraged as a way of reducing private costs—the list is long. Half of Angus Burgin’s book is about the Good Hayek’s attempts to formulate and to propagate a modified version of laissez-faire that would work better and meet his standards for a liberal society. (Hayek and his friends were never able to settle on a name for this kind of society: “liberal” in the European tradition was associated with bad old Manchester liberalism, and neither “neo-liberal” nor “libertarian” seemed to be satisfactory.)
    The Bad Hayek emerged when he aimed to convert a wider public. Then, as often happens, he tended to overreach, and to suggest more than he had legitimately argued. The Road to Serfdom was a popular success but was not a good book. Leaving aside the irrelevant extremes, or even including them, it would be perverse to read the history, as of 1944 or as of now, as suggesting that the standard regulatory interventions in the economy have any inherent tendency to snowball into “serfdom.” The correlations often run the other way. Sixty-five years later, Hayek’s implicit prediction is a failure, rather like Marx’s forecast of the coming “immiserization of the working class.”
    • Robert Solow, "Hayek, Friedman, and the Illusions of Conservative Economics", New Republic (December 6, 2012).
  • If one writing contributed more than any other to the framework in which this work [Sowell's "Knowledge and Decisions"] developed, it would be an essay entitled 'The Use of Knowledge in Society,' published in the American Economic Review of September 1945, and written by F. A. Hayek … In this plain and apparently simple essay was a deeply penetrating insight into the way societies function and malfunction, and clues as to why they are so often and so profoundly misunderstood.
  • The 20th Century looked for many decades as if it were going to be the century of collectivism … Anyone who would have predicted the reversal of this trend … would have been considered mad just a dozen years ago. Innumerable factors led to [the reversal of the rise of collectivism], not the least of which was the bitter experience of seeing 'rational planning' degenerate into economic chaos and Utopian dreams turn into police-state nightmares. Still, it takes a vision to beat a vision … An alternative vision had to become viable before the reversal of the collectivist tide could begin with Margaret Thatcher in Britain and Ronald Reagan in the United States. That vision came from many sources, but if one point in time could mark the beginning of the intellectual turning of the tide which made later political changes possible, it was the publication of The Road to Serfdom by Friedrich A. Hayek.
  • It is a fair reading of The Road to Serfdom to say that forty years more of the march toward socialism would lead to major losses of the political and economic freedom of individuals. Yet in those forty years we have seen that continuous expansion of the state in Sweden and England, even in Canada and the United States, without consequences for personal freedom so dire as those he predicted.
  • At the core of the failure of the socialist experiment is not just the lack of property rights. Equally important were the problems arising from lack of incentives and competition, not only in the sphere of economics but also in politics. Even more important perhaps were problems of information. Hayek was right, of course, in emphasizing that the information problems facing a central planner were overwhelming. I am not sure that Hayek fully appreciated the range of information problems.
  • While traditional economic theory is clearly wrong in treating individuals as immutable "tastes" no less than technology were the primitives of the model we have no scientific basis on which to judge one set of moral values, one set of personality types, as superior to others. Thus, while Hayek may have been right in stressing the moral dimension of markets — the kind of consequences in shaping human nature that I have just described — he fails to provide us with a systematic approach for addressing these issues (e.g., see his 1989 book).
  • What's the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That's the consensus among economists. That's the Hayek legacy.
    • Lawrence Summers, as quoted in "The Commanding Heights : The Battle Between Government and the Marketplace that Is Remaking the Modern World" (1998) by Daniel Yergin and Joseph Stanislaw, p. 150
  • During the following decade [of the 1950's] modern economic history took a dramatic swing away from the liberal-left consensus established by the Hammonds, Tawney and the Webbs. The seminal text for this change of direction was the 1954 collection of essays compiled by F. A. Hayek, "Capitalism and the Historians".
    • Miles Taylor, "The Beginnings of Modern British Social History?" in History Workshop Journal, Vol. 43, (Spring 1997), p. 163.
  • Our inspiration was less Rab Butler's Industrial Charter than books like Colm Brogan's anti-socialist satire, Our New Masters … and Hayek's powerful Road to Serfdom, dedicated to 'the socialists of all parties'. Such books not only provided crisp, clear analytical arguments against socialism, demonstrating how its economic theories were connected to the then depressing shortages of our daily lives; but by their wonderful mockery of socialist follies, they also gave us the feeling that the other side simply could not win in the end. That is a vital feeling in politics; it eradicates past defeats and builds future victories. It left a permanent mark on my own political character, making me a long-term optimist for free enterprise and liberty.
  • Adam Smith, the greatest exponent of free enterprise economics till Hayek and Friedman.
  • 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.
  • For Dicey, writing in 1885, and for me reading him some seventy years later, the rule of law still had a very English, or at least Anglo-Saxon, feel to it. It was later, through Hayek's masterpieces "The Constitution of Liberty" and "Law, Legislation and Liberty" that I really came to think this principle as having wider application.
  • All the general propositions favouring freedom I had … imbibed at my father's knee or acquired by candle-end reading of Burke and Hayek .."
  • The key importance of the amount of information available and the frequent lack of relevant information have been dealt with only in the last decades. L. von Mises and F. A. von Hayek can rightly be regarded as pioneers in this connection.
    • Jan Tinbergen, in 1979, as quoted in Recollections of Eminent Economists (1988) by J. A. Kregel, Vol. 1, p. 90.
  • I suggest, as reasonable speculation and inference, that the conspicuous absence in Hayek’s argument of ifs and buts and of painful wrestling with the task of weighing pros and cons in the light of a complex pattern of values and of a supply of information which points in various directions is largely the result of two factors: first, that he selects as his targets extremist forms of opposing doctrine and, second, that for the purposes of his argument he works from an extremely limited set of values. With each of these procedures there is associated a particular logical peril. To attack an extreme position when it is not clear that a more moderate position is open to the same kind of objections may be, depending on the historical context, to attack a straw man, while to reach final conclusion upon the basis of consideration of a single value, or of very limited set of values, is liable to result in what has been called “the fallacy of the unexplored remainder.”
    • Jacob Viner, “Hayek on Freedom and Coercion.” Southern Economic Journal 27, no. 3: 230–36. (1961).
  • The most interesting among the courageous dissenters of the 1980s were the classical liberals, disciples of F. A. Hayek, from whom they had learned about the crucial importance of economic freedom and about the often-ignored conceptual difference between liberalism and democracy.
    • Andrzy Walicki, "Liberalism in Poland" in Critical Review (Winter 1988), p. 9.
  • Everyone in Boston of a certain age knows the story of Rosie Ruiz, … Something of the sort has been going on recently with the shade of Friedrich von Hayek.
  • Nearly two decades ago, during dinner with the late Nobel laureate Friedrich Hayek, I asked him if he had the power to write one law that would get government out of our lives, what would that law be? Hayek replied he'd write a law that read: Whatever Congress does for one American it must do for all Americans. He elaborated: If Congress makes payments to one American for not raising pigs, every American not raising pigs should also receive payments. Obviously, were there to be such a law, there would be reduced capacity for privilege-granting by Congress and less influence-peddling.
  • The conservative critique of radical projects is not mainly that the emancipatory goals of radicals are morally indefensible – although some conservatives criticize the underlying values of such projects as well – but that the uncontrollable, and usually negative, unintended consequences of these efforts at massive social change inevitably swamp the intended consequences. Radicals and revolutionaries suffer from what Frederick Hayek termed the “fatal conceit” – the belief that through rational calculation and political will, society can be designed in ways that will significantly improve the human condition.
    • Erik Olin Wright, Envisioning Real Utopias.
  • The dramatic redefinition of state and marketplace over the last two decades demonstrates anew the truth of Keynes' axiom about the overwhelming power of ideas. For concepts and notions that were decidedly outside the mainstream have now moved, with some rapidity, to center stage and are reshaping economies in every corner of the world. Even Keynes himself has been done in by his own dictum. During the bombing of London in World War II, he arranged for a transplanted Austrian economist, Friedrich von Hayek, to be temporarily housed in a college at Cambridge University. It was a generous gesture; after all, Keynes was the leading economist of his time, and Hayek, his rather obscure critic. In the postwar years, Keynes' theories of government management of the economy appeared unassailable. But a half century later, it is Keynes who has been toppled and Hayek, the fierce advocate of free markets, who is preeminent.
    • Daniel Yergin and Joseph Stanislaw, "The Commanding Heights: The Battle Between Government and the Marketplace that Is Remaking the Modern World (1998) p. 14
  • A controversy arises every once in a while as to whether or not Friedrich Hayek stated that welfare state policies are likely to put a country on "the road to serfdom." These arguments tend to arise in two different directions. Sometimes conservatives will cite Hayek to this affect as part of an argument against welfare state policies, only to be met by liberals who cite contrary points in Hayek's writings to try to make them look foolish. Alternatively, sometimes liberals say Hayek said the welfare state would lead to totalitarianism in order to make Hayek look foolish, only to be rebutted by Hayek fans on the right citing contrary arguments he made. … The answer to this puzzle, I think, is that Hayek was inconsistent.

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