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.
See Also
The Road to Serfdom
The Constitution of Liberty
Law, Legislation and Liberty
The Fatal Conceit



  • 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).


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.
  • 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]

Main article: The Road to Serfdom

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


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.


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.
  • I have been arguing that constitutions in the old Whig tradition ought to grow and not be made; and to suggest any completely new constitutional system is somewhat absurd.
    • New nations and the problem of power, The Listener, (November 10, 1960)
  • If you look at the Acts of Parliament, you will find that 90 per cent are not laws but are administrative orders decided by a democratic body...and called for that reason a law.
    • New nations and the problem of power, The Listener, (November 10, 1960)
  • In a nation where there is not yet a tradition of compromise...almost any attempt to put upon the government a great many tasks is bound to lead to dictatorial regimes.
    • New nations and the problem of power, The Listener, (November 10, 1960)
  • It would be a body charged with creating that framework of traditional and moral rules which any Western democracy with a long history possesses as a result of its history. Such a background is lacking in these new states and is make government function.
    • New nations and the problem of power, The Listener, (November 10, 1960)
  • [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).
  • When I look back, it seems so have all begun, nearly thirty years ago, with an essay on “Economics and Knowledge” in which I examined what seemed to me some of the central difficulties of pure economic theory, Its main conclusion was that the task of economic theory was 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.
    • Friedrich Hayek, "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]


  • 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.
  • My whole concept of economics is based on the idea that we have to explain how prices operate as signals, telling people what they ought to do in particular circumstances. The approach to this problem has been blocked by a cost or labor theory of value, which assumes that prices are determined by the technical conditions of production only. The important question is to explain how the interaction of a great number of people, each possessing only limited knowledge, will bring about an order that could only be achieved by deliberate direction taken by somebody who has the combined knowledge of all these individuals. However, central planning cannot take direct account of particular circumstances of time and place. Additionally, every individual has important bits of information which cannot possibly be conveyed to a central authority in statistical form. In a system in which the knowledge of relevant data is dispersed among millions of agents, prices can act to coordinate the separate actions of different individuals.
    Given this context, it is intellectually not satisfactory to attempt to establish causal relations between aggregates or averages in the manner in which the discipline of macroeconomics has attempted to do. Individuals do not make decisions on the basis of partial knowledge of magnitudes such as the total amount of production, or the total quantity of money. Aggregative theorizing leads nowhere.
    • Conversation in 1979, published in Diego Pizano, Conversations with Great Economists (2009)
  • I think the basic misconception is to speak of the so-called “best” allocation of resources. What is the best? In common economics it is defined as what would be if we knew everything. Economists operate with the fictitious assumption that all the relevant data is known, but this is totally unrealistic. Nobody knows all the data. What we have is widely dispersed knowledge, which cannot be concentrated in one mind. To call the situation—which would use all the knowledge available—“optimal” is nonsense because it is by definition a non-achievable solution. Our problem is not the full utilization of all knowledge but the best use we can achieve with any known institutional structure. In that sense, some oligopolistic (and even monopolistic situations), represent the best possible utilization of knowledge that we can achieve. Even the action of a monopolist can be extremely beneficial.
    • Conversation in 1979, published in Diego Pizano, Conversations with Great Economists (2009)
  • There is no doubt, and in this I agree with Milton Friedman, that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation! So, once again, a badly programmed monetary policy prolonged the depression! So, once again, a badly programmed monetary policy prolonged the depression. One consequence of this policy was, of course, the fact that confidence was destroyed.
    • Conversation in 1979, published in Diego Pizano, Conversations with Great Economists (2009)
  • I visited Chile some time ago and I found that the country is being governed by members of Friedman's seminar! ... The economic system is working marvelously and the recovery is extraordinary. I did not see the system of political control in enough detail to have a serious opinion about it, but I can say that the economy is much freer in comparison to what it had been for a very long time. I also think that the way in which Chile is covered by the international press is scandalous.
    • Conversation in 1979, published in Diego Pizano, Conversations with Great Economists (2009)

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 (1973, 1976, 1979)[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. ... 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).
  • I cannot help but protest in the strongest possible terms against the cartoon on page 3 of your publication of the 30th of December equating the present governments of Poland and Chile. It can only be explained by complete ignorance of the facts or by the systematically promoted socialist calumnies of the present situation in Chile, which I had not expected the F.A.Z. to fall for. I believe that all the participants in the Mont Pelerin Society conference held a few weeks ago in Chile would agree with me that you owe the Chilean government a humble apology for such twisting of the facts. Any Pole lucky enough to escape to Chile could consider himself fortunate.
    • letter to the editor of Frankfurter Allgemeine Zeitung, on a cartoon comparing Pinochet’s Chile to Jaruzelski’s Poland, which was published on January 6, 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).
  • On the scale on which [tax cutting] is being tried, I’m a little apprehensive. I’m all for reduction of government expenditures but to anticipate it by reducing the rate of taxation before you have reduced expenditure is a very risky thing to do.
    • in "Business People; A Nobel Winner Assesses Reagan", The New York Times (December 1, 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).
  • I mean, it became particularly acute because Keynes, against his intentions, had stimulated the development of macroeconomics. And I was convinced that not only his particular conclusions, but the whole foundation of macroeconomics was wrong.
    So I wanted to demonstrate that we had to return to microeconomics, that this whole prejudice supported by the natural scientists that could deduce anything from measurable magnitudes, the effects of aggregates and averages, came to fascinate me much more. I felt in a way, that the thing which I am now prepared to do, I don’t know as there’s anybody else who can do this particular task. And I rather hoped that what I had done in capital theory would be continued by others. This was a new opening which was much more fascinating. The other would have meant working for a result which I already knew, but had to prove it. Which was very dull.
    The other thing was an open problem: How does economics really look like when you recognize it as the prototype of a new kind of science of complex phenomena which could not employ the simple model of mechanics or physics, but had to deal with what then I described as mere pattern predictions, certain limited prediction. That was so much more fascinating as an intellectual problem.
    • In a 1985 interview with Gary North and Mark Skousen, in Hayek on Hayek (1994)

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

Main article: The Fatal Conceit


  • … 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.
  • Yet whatever the need for such individual consolations, there was a general rationale for the cosmos of the market. It was the evolutionary product of historical competition between rival economic practices, which had proved its worth in the superior overall growth of production and population it had assured. Here Hayek's doctriune took a concluding utilitarian turn. The yardstick of a desirable order was not philosophical truth but practical well-being. In its own terms, this was a perfectly coherent conclusion. But his theory still faced an awkward difficulty in the apparent institutional outcome of the spontaneous social mechanisms it celebrated. For was not the steady erosion of the division between taxis and cosmos, with the seemingly inexorable growth of the welfare state, itself pre-eminently an evolutionary process? To roll it back required — according to Hayek's new prescriptions — drastic redesigning of the structure of the state. Indeed, what he now proposed was nothing less than a dismantling of every known legislature into two novel bodies with different competences and disparate electorates, to correspond to the two ontological kinds of order — the more powerful chamber, guardian of the rule of law as such, striking anyone under the age of forty-five off the voting-roll. This, as even sympathizers could not fail to notice, was a violent attack of the very constructivism his theory had set out to purge. Hayek was unmoved, Such was the price of preserving nomos, or the law of liberty, from the logic of popular sovereignty.
  • [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.
  • Hayek was not doctrinaire about the importance of political freedom. In a 1979 interview with The Times, he defended the Chilean regime of Augusto Pinochet, which combined political repression with free-market economics, calling the results “absolutely fantastic.” Asked whether this view was inconsistent with his philosophy, Hayek replied, “You can have economic freedom without political freedom, but you cannot have political freedom without economic freedom.”
  • 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.
  • There were many Hayeks: Hayek, the political scientist; Hayek, the economist; Hayek, the philosopher of social science; Hayek, the psychologist. Even in these different roles, he played many parts.
    • Mark Blaug, "Hayek revisited", Critical Review 7.1 (1993)
  • All of his political writings are in fact amazingly repetitious, exploring a small number of big themes which, however, are not further refined or extended in new contexts.
    • Mark Blaug, "Hayek revisited", Critical Review 7.1 (1993)
  • 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).
  • 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).
  • 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. ... 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.
  • The Neoclassical school has been the dominant school of economics for the last two generations, so I have also been schooled in it throughout my career. It can provide us with some very useful tools to analyse problems within a given structure, but it is not very good at understanding how the institutions, technologies, politics, and ideas that define that structure evolve over time.
    In this respect, Hayek is very different from the Neoclassical school, even though many Neoclassical economists mention him in the same breath as Milton Friedman, on the basis that he was one of the most influential advocates of the free market. Unlike Neoclassical economists, however, Hayek does not take the socio-political order underlying the market relationship as given and emphasizes the ultimately political nature of our economic life. This is a big contrast to the Neoclassical view, which thinks that economics and politics can be, and should be, separated. Indeed, if you read Hayek’s book, Individualism and Economic Order, you will see that he is very critical –sometimes even abusive – of Neoclassical economics.
  • 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
  • For all his brilliance, Hayek didn’t — at the critical time — have a good enough understanding of the dangers of deflation. He didn’t fully realize the extent of sticky wages and prices and, more deeply, he didn’t see that ongoing deflation would render the “calculation problem” of a market economy more difficult. Hayek stressed that a market calculates value in a way that a central planner cannot — but lying behind this ability to calculate is some basic macroeconomic stability. At the key moments, Hayek did not offer the proper recipe for that stability.
    • Tyler Cowen, "The Eternal Struggle", National Review (2011)
  • 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.
  • 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).
  • [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 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
  • 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
  • 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
  • Hayek started from an evolutionary perspective in the natural sciences. He ended his career with an evolutionary account of the development 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 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
  • 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 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
  • It is likely that Hayek was influenced to consider the role of prices in economic activity more substantially than he otherwise would have as a result of Mises’s emphasis on the necessity of prices to engage in optimal economic activity. Nevertheless, Hayek stressed that his ideas in economic theory were his own.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 4. Ludwig von Mises
  • Hayek never really departed from the essential economic theory that he developed during the 1920s, although he expanded and deepened his analysis. He remarked in a 1975 lecture that he had not altered his opinion “about the theoretical explanation of the events” of the Great Depression that he had put forward forty years before, “but about the practical possibility of removing the obstacles to the functioning of the system in a particular way,” which led to his later policy proposals for competition among currencies and private currencies.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 7. From Economic Theory to Political Philosophy
  • Hayek emphasized the importance of rules. He thought that what society should do is not to direct the individual in his or her particular actions, but to create a metaphysical structure, as it were, enforced by rules or laws, that create stable expectations and thus allow rational action.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 8. “The Abuse and Decline of Knowledge”
  • Hayek’s work in epistemology, psychology, and methodology is among the most difficult in his corpus for the noneconomist or nonpolitical scientist, and various interpretations are possible. Stemming from the Germanic philosophical heritage, Hayek was likely to place more emphasis on the act of knowing than on objects themselves. Hayek ultimately followed Kant in his ontological conception of reality—he thought that mind impresses order on existence.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • Hayek’s early work as a student in psychology (mostly before Wittgenstein’s Tractatus was published) led him to ask himself the questions:“What is mind?” and “What is the place of mind in the realm of nature?” Hayek essentially adopted a Kantian view of the nature of the world. He saw mind as implanting order on the world rather than the world necessarily having any properties of, as it were, itself.
    In The Sensory Order, Hayek wrote that if the “account of the determination of mental qualities which we have given is correct, it would mean that the apparatus by means of which we learn about the external world is itself the product of a kind of experience.” Hayek did not ultimately ascribe much significance to the brain as an accurate (whatever, in this circumstance, accuracy would be) receptacle of reality. Reality, such as it is, is what brain makes of it.
    This Kantian ontological (theory of being) perspective had, in Hayek’s view, significant philosophical consequences or repercussions for epistemology. Since there is no ultimate reality apart from what brain makes of it, knowledge is not of ultimate essences but merely of mental states that themselves are liable to change during the lifetime of an organism or over the evolution of a species. Hayek’s ontology ultimately reduces the role of absolute knowledge absolutely.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • Hayek thought that the social sciences are capable of greater knowledge than the natural. He wrote in “The Facts of the Social Sciences” in 1943—after, significantly, his “Economics and Knowledge” essay, which he considered to have constituted his decisive breakthrough and departure from Mises (though Mises, as already noted, did not think this):“While at the world of nature we look from the outside, we look at the world of society from the inside.” Because we look at the world of society from, in Hayek’s view, the “inside,” we are capable of more knowledge of it than of the external world of nature.
    Similarly, Hayek considered the fundamental divide between the social and natural worlds not to be in kind of phenomena (notwithstanding that we experience the former from the inside and the latter from the outside), but in complexity. [...] From Hayek’s perspective, the natural sciences move from complexity to individual elements; the social sciences move from individual elements to complexity.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • Earlier in his career, Hayek referred to pattern prediction as “explanation of the principle.” His idea was that, as a result of the complexity of the social world, only general predictions of it are possible.
    His emphasis on prediction of the principle or pattern leaves out a great deal. It is not merely that only general predictions can be made—it is that predictions often can be made only of best-guess probabilities, not even of patterns or principles. As Hayek mentioned, patterns can sometimes be expressed numerically as ranges.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • The core ideas in Hayek’s metaphysical and methodological thought were, in the former, that reality is complex; and in the latter, that there should be some empirical corroboration for statements about events in the realm of nature.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • Hayek always followed Mises that “the pure logic of choice” of the economic calculus is strictly deductive, and thus it is possible to have axiomatic laws of individual action. However, where he did not follow Mises was in Hayek’s further belief that interpersonal activity is empirical from the perspective of the world outside of one’s sensory experience of one’s self and that the same fixity of axiomatic laws of human interaction as of individual human action is not possible. Individuals act on their understandings of the world, Hayek thought, and it is impossible to know what these are in other people with precision and complete accuracy.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 10. Epistemology, Psychology, and Methodology
  • Hayek embraced prediction as the criterion for scientific theories in “Degrees of Explanation.” This was, indeed, his definition of the hypothetico-deductive approach [...] Testable prediction was the core of Hayek’s conception of scientific methodology in the natural realm. He noted that “prediction and explanation are merely two aspects of the same process” and that for “the purposes of this article it would indeed make no important difference if instead of ‘degrees of explanation’ we spoke throughout of ‘degrees of prediction.’”
    At the same time, as Hayek maintained elsewhere, the facts of the social sciences do not lend themselves to the same degree of prediction, or explanation, as the facts of the natural sciences—it is for this reason that there are degrees of prediction or explanation. Prediction may be expressed numerically, moreover, “not as a unique value or magnitude but as a range,” narrow in the natural sciences and potentially very broad in the social sciences. In the social sciences, Hayek modified the conception of a numerical range to a “range of phenomena to expect.” This was his concept of pattern prediction, or explanation of the principle, broad, general predictions.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 14. Studies in Philosophy, Politics and Economics
  • Hayek’s work in philosophy can be considered from another perspective than its methodology. When Hayek wrote that his philosophical studies should precede his political studies, he meant that in order to explain the sort of political system he favored, it was necessary to have greater understanding of the transmission and communication of information and knowledge. This is why he wished to travel to Italy and Greece. He thought that he might understand nonverbal knowledge better in doing so and might better understand the role of institutions in transmitting knowledge and information.
    • Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 14. Studies in Philosophy, Politics and Economics
  • Nor does [Ebenstein's] book offer any real historical setting for Hayek's career. Although often naive in his political judgments, Hayek was intensely concerned with public issues throughout his life. Yet we learn virtually nothing of the development of his views on the affairs of the day. What did he make, for example, of the Dollfuss dictatorship in Austria, where his teacher Ludwig von Mises served its clerical predecessor under Monsignor Seipel, and where Hayek himself planned to return in the 1930s? Mr Ebenstein never even mentions these conservative authoritarian regimes of the period. In later years, he records Hayek's efforts to secure South Tyrol for Austria once again; his organisation of the Mont Pelerin Society, an influential post-war group of free-market intellectuals; his recommendation that West Germany, France and Britain sue for entry as states into the United States; his reception in Verwoerd's South Africa and his admiration for General Pinochet's achievements in Chile; his wish that Iran be bombed in 1979 and Argentina in 1982. Homages from Barry Goldwater, Margaret Thatcher, Ronald Reagan and Yegor Gaidar roll past (the only discordant note comes from Ayn Rand, once Alan Greenspan's muse: “As an example of our most pernicious enemy, I would name Hayek. That one is real poison.”; or again: “The kind who do more good to the communist cause than ours”). Yet no coherent picture of Hayek's political commitments ever emerges, still less their relation to such important works as “The Constitution of Liberty” (1960).
  • The great theme of his remarkable explorations in intellectual history is the danger of all constructivism, the belief that we can deliberately design social arrangements which will be better than those we unwittingly hit upon. Paradoxically, however, the drive of Hayek's own work is itself characteristically that of a rationalist construction. Admiring David Hume and detesting Auguste Comte, his genius was to marry the sceptical insights of the one to more than a touch of the compulsive rigour of the other.
  • 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)
  • What of Ronald Reagan and Margaret Thatcher and their battles against government control of the economy? Here Hayek surprises. He does not disapprove of Reagan and Thatcher, but he has no high opinion of modem politicians in general. He does, however, say that Reagan's and Thatcher's policies "are as reasonable as we can expect at this time. They are modest in their ambitions." Modesty. The capacity to understand that well-meaning politicians — and their advisers, the intellectuals — will only wreak mischief if they try to guide economic development: This antipolitical concept is at the heart of Hayek's theory of economic and social development.
    • Interview of F. A. Hayek, Forbes, May 15, 1989
  • There was someone who is clearly very important who also was not a member of the scientific commission, but whose career and trajectory was ultimately very important for the definition of contemporary neo-liberalism. This is the Austrian von Hayek. He came from Austria and from neo-liberalism; he emigrated at the time of, or just before, the Anschluss. He went to England and also to the United States. He was very clearly one of the inspirations of contemporary American liberalism, or of American anarcho-capitalism if you like, and he returned to Germany in 1962 where he was appointed professor at Freiburg, thus closing the circle.
    • Michel Foucault, The Birth of Biopolitics: Lectures at the College de France, 1978-1979, five (7 February 1979)
  • I’ve always thought, incidentally, that many of us should welcome the fact that...a particular policy idea we hold does have this adverse effect on the opinions of other people. I think this is a very good thing, because it means that those of us who hold our views have to be better to get recognized than people who hold the other views. And in the long run, what matters is the quality of people who propose the ideas and not their number and not their position. It is because it is the quality of these ideas that matters so much that Hayek’s ideas have been so wide-spread and have had such an influence, and that you are now seeing the rise in the scientific as well as in the other parts of the world of more people of this particular kind of persuasion....
    . . . I am one of those who has learned a great deal from Hayek. I hope he is as effective as I think he will be in his teaching in Germany, but I also hope that we will see him back here very often indeed.
    • Milton Friedman, impromptu remarks at the 1962 testimonial dinner, quoted in Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 13. The Chicago School of Economics and Milton Friedman
  • Friedrich Hayek's influence has been tremendous. His work is incorporated in the body of technical economic theory; has had a major influence on economic history, political philosophy and political science; has affected students of the law, of scientific methodology, and even of psychology.
  • 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).
  • In terms of his personal characteristics Hayek was a very complicated personality. He was by no means a simple person. He was very outgoing in one sense but at the same time I would say very private. He did not like criticism, but he never showed that he didn’t like criticism. His attitude under criticism . . . was to say “Well, that’s a very interesting thing. At the moment I’m busy, but I’ll write to you about it more later.” And then he never would!
    On the other hand, he wasn’t like von Mises. He wasn’t in tolerant at all. You cannot conceive of Hayek doing the kind of thing that Mises did when, for example, he wouldn’t talk to Machlup for three years because Machlup had come out for floating exchange rates at a Mont Pelerin meeting. Hayek did not do that. That was, I believe, because of the influence of the London School on him. He was very much tempered by the London School....
    • Milton Friedman, Friedman-Ebenstein interview in 1995, quoted in Alan Ebenstein's Hayek's Journey: The Mind of Friedrich Hayek (2003) Ch.11. The Constitution of Liberty
  • 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 philosophy] are magnificent, and I have nothing but great admiration for them. I really believe that he found his right vocation — his right specialization — with The Road to Serfdom.
    His earlier works were intended to be part of the literature of technical economics as a science, and, indeed, it was that characteristic of them that impressed Lionel Robbins and led Lionel to bring him from Austria to London. I never could understand why they were so impressed with the lectures that ended up as Prices and Production, and I still can’t . . . these very confused notions of periods of production, different orders of products, and so on.
    • Milton Friedman, Friedman-Ebenstein interview in 1995, quoted in Alan Ebenstein's Hayek's Journey: The Mind of Friedrich Hayek (2003) Ch.11. The Constitution of Liberty
  • I don’t think it’s one of Hayek’s better works. It’s awfully forced. It’s put into this form of, “I’m going to show you once and for all, by God, and after you hear this you’ll have no answer to me whatsoever.” It’s not up to Hayek at his best.
    • Milton Friedman, on The Fatal Conceit, Friedman-Ebenstein interview in 1995, quoted in Alan Ebenstein's Hayek's Journey: The Mind of Friedrich Hayek (2003) Ch. 18. “The Fatal Conceit”
  • 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.
  • 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).
  • Friedrich A. von Hayek, one of the strongest, and at times one of the few, economic voices advocating the reduction of government's role in the economy, is finally finding himself in the position of a Cassandra who suddenly that discovers people are listening.
    • John M. Geddes, "New Vogue for Critic of Keynes." The New York Times (May 07, 1979)
  • I recall vividly Hayek (who was a great economist but a poor policy analyst) commenting on the Pinochet overthrow of democratic government in Chile (Pinochet brought a gang of Chicago economists into town to implement the principles of laissez-faire markets, torturing and murdering thousands who had different ideas) commenting that he would prefer a [laissez-faire style] liberal dictatorship to an illiberal democracy.
  • 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).
  • 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.
  • The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek. … For Hayek, in short, the lesson of Austria and indeed the disaster of interwar Europe at large boiled down to this: don’t intervene, and don’t plan. Planning hands the initiative to those who would, in the end, destroy society (and the economy) to the benefit of the state.
    • Tony Judt, in Tony Judt and Timothy Snyder, Thinking the twentieth century (2012), Ch. 1. The Name Remains: Jewish Questioner
  • 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.
  • 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).
  • 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).
  • In the 20th century, three world wars facilitated a Communist revolution, a Fascist backlash and the subsequent collapse of both. The weakness of bureaucratic information flows (relative to market-based competitors) undermined Communist economies – a point emphasized by Frederick Hayek, the co-leader (with Murray Rothbard) of the fourth generation Austrian School of Economics. Flows of information and disinformation played pivotal roles in the First, Second and Third (that is, Cold) World Wars.
    • Robert Leeson, Introduction in Hayek: A Collaborative Biography, Part III, Fraud, Fascism and Free Market Religion (2015), edited by Robert Leeson
  • 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).
  • Friedrich A. von Hayek, winner of the Nobel Memorial Prize in Economic Science, says that on the whole he approves of the economic policy of the Reagan Administration.
    Yet, when he discusses particulars, Professor von Hayek - a conservative who is best known as an unrelenting opponent of Socialism and lesser forms of economic interventionism -sounds less than approving. He applauds the determination in Washington and London to stop inflation but laments that both Governments seek gradual progress. "You have to do it rapidly and drastically," he says.
    • "Business People; A Nobel Winner Assesses Reagan", The New York Times (December 1, 1982)
  • 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.
  • Our intellectual productivity is declining. Still, yours is admirable. You can still lecture (I cannot)....I know that you feel that you cannot do the work you used to do, and although you have told me and others about it, you kept it hidden from your observant friends—even though you complain to them of it, and draw their attention to it....
    But apart from the field of intellectual production, you have done so much for others. There are many former students you have encouraged and helped on their way. And there are many who, like myself, have been helped by you in the most critical stages of their development.
    • Karl Popper, on Friedrich Hayek, in 1974, in Hayek Archive 2-6, Hoover Institution, Stanford University, quoted in Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 15. Karl Popper
  • I have created myself a kind of generational gulf between you and myself. Although you were only 3 years old when I was born, you became, as I now realize, a kind of father figure....[E]ven now, when I am 82, and we have been friends for so many years, you still are! And, strangely enough, you yourself...described your feelings towards me as those towards a young man who has made good.
    • Karl Popper, on Friedrich Hayek, in 1984, in Hacohen, Popper, quoted in Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 15. Karl Popper
  • I should like to mention that I did not know Hayek’s book (The Road to Serfdom) when I wrote mine; in fact, my book was finished about six months before his. All I knew was a little pamphlet “Freedom and the Economic System,” in which he advocates “Planning for Freedom.”...The acknowledgement in my book refers to his practical help rather than to his influence; but since I wrote my book, I have read Hayek’s book (and several excellent articles), and I can only say that I have learned a very great deal from it. A few leftists here in England are in the same position ....Hayek, who I had seen only four or five times before, has been really wonderful to me in his many repeated approaches to various publishers, and I understand from the people here in the School [the London School of Economics] that he is always so. His interest in my book was mainly due to the fact that he too is hoping for a common basis of discussion for socialists and liberals.
    • Karl Popper, on Friedrich Hayek, in 1984, In Notturno, “Popper’s Critique,” quoted in Alan Ebenstein, Hayek's Journey: The Mind of Friedrich Hayek (2003), Ch. 15. Karl Popper

  • 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.
  • Hayek’s analysis, with its theory of ‘real’ economic equilibrium, rests on the concept of ‘period of production’ and the thesis that the ‘capital intensity’ of production processes is a decreasing function of the interest rate. This thesis comes in for destructive criticism from Sraffa in chapters 6 and 12 of his 1960 book, but in the 1932 article his attention focuses on Hayek’s monetary analysis.
    [...] We may well imagine Hayek’s dismay faced with a position such as Sraffa’s must have seemed to him. Here we are, in a world where monetary factors exert an evident influence on real variables, and where the marginalist theory of value is universally accepted. What, then, could the outcome possibly be of rejecting out of hand what seemed to be the only possible way to reconcile faithfulness to the theoretical foundations of marginalism with the realities of unemployment and cyclic trends in the economy? Today it appears quite clear to us that what to Hayek seemed like nihilism on Sraffa’s side (much like the attitude shown towards Marshallian theory in the 1930 article) was simply rejection of the marginalist approach –not as a ‘leap into the dark’, but in favour of the reconstruction of political economy based on the alternative approach of the classical school.
    • Alessandro Roncaglia, Piero Sraffa: His life, thought and cultural heritage (2000), Ch. 1. Piero Sraffa
  • 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.
    • Alan Ryan, 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’s warning was dead wrong. Most rich countries tried some form of Keynes’s policies in the 1950s, '60s, and '70s, and while they didn’t always work as advertised, they most definitely did not lead to totalitarianism. Yet somehow Hayek’s meme entered our collective consciousness. On blogs and in the financial media, where politics and economics mix freely, self-described "Austrians" kept using the word "Keynesian" as a political epithet, the way National Review writers or Fox News anchors use the word "liberal."
  • 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.)
    • Robert Solow, "Hayek, Friedman, and the Illusions of Conservative Economics", New Republic (December 6, 2012).
  • 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.
  • Mrs. Hayek, I want you each day in the future to address your husband and inquire what his progress has been in what I consider to be one of the most interesting and intriguing fields, the evolution of the work of scholars.
    • George Stigler, at a going-away party in Hayek’s honor at the University of Chicago in 1962, Hayek Archive 116.10., Hoover Institution, Stanford University
  • 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.
  • 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 .."
  • Myrdal was certainly committed to democracy, even in developmental contexts, and firmly opposed to empires. Democratic or otherwise, he was highly pessimistic—in retrospect excessively so—about the prospects for international economic development. Hayek had no problem with “transitional” authoritarianism, as in Pinochet’s Chile, with which he was associated. Hayek, an Austrian aristocrat teaching in London, and Myrdal, a Social Democrat who attempted to rally his fellow Swedes against Hitler, were united and defined by their anti-Nazism.
    • Thomas Timberg, “William Easterly’s The Tyranny of Experts: The Undoubted Merits of Individual Liberty, Individual Initiative and Democracy” (2014)
  • 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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