Hayek:The Man and the Hero

...Ludwig von Mises had said similar things earlier, and many others would echo Hayek later, but none of that changed the fact that The Road to Serfdom marked a turning point...

...It was fitting that he lived to see the fall of the Berlin Wall and the end of the Soviet Union in his last years...

...Prosperous countries with few natural resources, such as Japan and Switzerland, are as common as poor countries with rich resources, such as Russia or Mexico...

...Whatever the reasons for Hayek's selection, the Nobel Prize not only boosted his visibility and his works, but also boosted his spirits at one of the low points in his life...

...How well it succeeds is another question...

...Why did unemployment reach 25 percent and Amnedican orporations as a whole operate in the red for two years in a row during the Great Depression of the 1930s...

...Hayek described Laski as "brilliantly intuitive and an inveterate liar," qualities behind popular successes in many fields...

...Nevertheless, Hayek was considered one of the leading scholars in the history of economic thought by George J. Stigler, the premier scholar in that subject...

...Hayek left his native Austria in 1931 to join the faculty of the London School of Economics when LSE was at the center of intellectual ferment and Hayek was at the peak of his fame as an economist...

...But the book's work had begun...

...As Ebenstein's biography puts it, "he was off the beaten path, much less the cutting edge, of technical economic thought...

...His vely eamples are drawn from around the world and from centuries of history, because the basei principles of economics are not lmfted to modem captalst socdeties and apply even to situations where no money m changes hands, such as caring for wounded soldir a on the balfld...

...Against this background, it came as a surprise to many-including Hayek himselfwhen he was awarded the Nobel Prize in economics in 1974...

...Hayek branched out into law and political philosophy, especially in his landmark books The Constitution of Freedom and Law, Legislation and Liberty...

...The focus of Bac Econommics is not on how individuals make money but on how whole societies create prosperity or poverty for their peoples by the way they organize their economies...

...The Hayek-Keynes rivalry was a centerpiece of the early 1930s but the rise of Keynesianism to utter dominance in England and around the world in the wake of The General Theory led to the permanent eclipse of Hayek as one of the leading economists of the time...

...Milton Friedman would come along later, as would the public choice school of economists and the law and economics movement...

...Why are people hungry in Moscow when there are vast amounts of some of the richest farmiand on the continent of Europe within easy driving distance...

...The same amount of knowledge was required in a market economy, but no given individual or council had to have command of all that knowledge in a system coordinated by individual price movements among millions of commodities and consumers, rather than by orders from above...

...Meanwhile, in economics, LSE was a rival to Cambridge University's economists and the tradition there that produced its most famous member, John Maynard Keynes, and his magnum opus of 1936, The General Theory of Employment, Interest and Money...

...More than personal minutiae is involved, however...

...He settled in England for the rest of that decade and all the way through World War II...

...Although Hayek was now famous again, perhaps more famous than ever before, his renown was no longer in economics, which was becoming ever more technical...

...But Hayek was the central pioneering figure in changing the course of thought in the twentieth century, which in turn changed the course of history...

...Born near the end of the nineteenth century and living into the last decade of the twentieth century, F. A. Hayek saw some of the most astonishing and dramatic events in history, as well as living through intellectual revolutions that changed the way human beings saw themselves and the world...

...He was for a time a socialist, which was especially ironic because he would later become the leading figure in discrediting socialism intellectually, decades before it finished discrediting itself in practice...

...Young Hayek grew up in turn-ofthe-century Vienna, capital of the Austro-Hungarian empire that epitomized Europe's old regime-a regime that would not survive the catastrophe of the First World War...

...Here Hayek went completely against the tide of the times by arguing that centrally planned economies could not handle the overwhelming amount of detailed knowledge that THE AMERICAN SPECTATOR N Summer Reading Issue 2001 122 would be required by anyone seeking to allocate resources and coordinate production efficiently...

...Here, in retrospect, we can see the beginning of Hayek's transformation from an economist to a social philosopher...

...The Nobel Prize made it impossible to forget the man who turned the tide of his times...

...Or that Hayek's standing as an economist was at its lowest ebb by the time he received the Nobel Prize in economics...

...Baic Economics:A Ckw's GukIe to the Economy By Thomas Sowell List Price: $30.00 Laissez Faire Books Price: $24.00 You Save: $6.00 off list (20%) LAISSEZ FAIRE B(3 1-800-326-0996 Fax: 1-415-541-0597 custsvc(laissezfairebooks.com Ref #. A81 THE AMERICAN SPECTATOR 0 Summer Reading Issue 2001 123 GukIe to the Economy By Thomas Sowell List Price: $30.00 Laissez Faire Books Price: $24.00 You Save: $6.00 off list (20%) LAISSEZ FAIRE B(3 1-800-326-0996 Fax: 1-415-541-0597 custsvc(laissezfairebooks.com Ref #. A81 THE AMERICAN SPECTATOR 0 Summer Reading Issue 2001 123...

...These and other surprising facts emerge from the recent biography titled simply Friedrich Hayek: A Biography by Alan Ebenstein...

...The worldwide collapse of industrial economies during the Great Depression of the 1930s discredited market economies in the eyes of many intellectuals, while the glowing promises of the rising Soviet economy seemed to point to the wave of the future...

...No one would have expected any such outcome in 1944, when Hayek stood virtually alone and The Road to Serfdom sounded the first great discordant note to a chorus of collectivism among scholars, journalists, and political figures...

...This is an ambitious book, which attempts to be both a history of the man and of his ideas, all within the context of changing and dramatic times...

...Another rivalry of the 1930s was between Hayek and those who believed that a socialist economy was not only viable but more efficient than capitalism...

...Still, the weight and momentum of the story itself carry the reader along, despite any quibbles with the writer's performance...

...The courses he taught were not economics courses, but courses in intellectual history and political philosophy...

...Hayek was an officer in that war and, afterwards, a young man seeking an education and a social mission...

...And it would continue on its monumental mission...

...Thomas Sowell Hayek: The Man and the Hero ALAN EBENSTEIN'S FRIEDRICH HAYEK: A BIOGRAPHY ho would have thought that Friedrich A. Hayek had a closer friendship with John Maynard Keynes than with Milton Friedman...

...It was by no means widely accepted at the time but it produced a sensation in England and a scandal in the United States, where some publishers rejected it as an immoral challenge to "progress...

...Professor Soweil has taught economics at leading collegs and unvrsities acroesth country and now uses his yers of experience to bring economics to aght in a way that is both easy to absorb and hard to fogt...

...The rise of National Socialism-a name too easily forgotten in the contraction Nazi-made it impossible for him to repatriate...

...Ironically, he shared the prize with Gunnar Myrdal, who had also branched out from economics-and whose views and social vision were diametrically opposite from those of Hayek...

...In the world of its time, where faith in the virtues of socialism and government planning was unquestioned among the vast majority of the intelligentsia in England and beyond, Hayek's book began a counter-revolution that would culminate, decades later, in the privatizing of government-owned enterprises in much of the West and the collapse of Communism in the East...

...It is a great story, especially today, when there are trends and events that Why are homeless people sleeping on the sidel s on New York in the wkAntler, Wten the abandoned parellnt buildings in the city have four times as many dwelling unts s as there are homeless people in the city...

...All these very different-but equally puzzling and tdlitaedi grew out of a failurto understandand apply bac econom prin s. Explain princi for the general public in plain English, with nether graphs nor equation norjargon, is the goa and achievement of Bas Eco by Thoas Sowell...

...When Hayek joined the faculty of the University of Chicago in 1950, it was not as a member of the economics department but as a member of the interdisciplinary Committee on Social Thought...

...His biography chronicles the decline of references to Hayek in scholarly economics journals from third place in 1930-35 to eighth place in 1936-39 and then his dropping out of the top ten entirely in 1940-44...

...It also gave him some much-needed financial independence that added comfort to his remaining years...

...The decisive change for Hayekand for the world-was marked by the publication in 1944 of his revolutionary book, The Road to Serfdom...

...It was a time when leftist political science professor Harold Laski was teaching and indoctrinating foreign students from the British Empire, including some who would later lead their countries out of the British Empire and into the glittering vision of socialism that they had seen for the first time at LSE...