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Friedrich Hayek
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Friedrich Hayek
Born 8 May 1899
Vienna, Cisleithania, Austria-Hungary
Died 23 March 1992 (aged 92)
Freiburg im Breisgau, Baden-Württemberg, Germany
Nationality
Austrian British
Institution
1962–68 University of Freiburg
1950–62 University of Chicago
1931–50 LSE
Field
Economics Political science Law Philosophy Psychology
School or tradition
Austrian School
Alma mater
University of Vienna
(Dr. jur. 1921, Dr. rer. pol 1923)
Influences
Acton Böhm-Bawerk Burke Eucken Ferguson Fetter Hume Locke E. Mach Mandeville Menger Mill Mises Popper Sidney A. Smith Spann Tocqueville Tucker Wieser Wittgenstein
Influenced
Coase Erhard Foucault D. Friedman M. Friedman H. Hazlitt Hicks Laffer Lerner Ostrom Paul Popper Rothbard Selgin V. Smith Sowell Stigler Timberlake White Yayla Yeager
Contributions
Economic calculation problem
Catallaxy
Dispersed knowledge
Price signal
Spontaneous order
Hayek–Hebb model
Awards
1974 Nobel Memorial Prize in Economic Sciences
1984 CH
1991 Presidential Medal of Freedom
Signature
Information at IDEAS / RePEc
Friedrich Hayek CH (German: [ˈfʁiːdʁɪç ˈaʊ̯ɡʊst ˈhaɪ̯ɛk]; 8 May 1899 – 23 March 1992), born in Austria-Hungary as Friedrich August von Hayek and frequently referred to as F. A. Hayek, was an Austrian and British economist and philosopher best known for his defence of classical liberalism. 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".[1]
Hayek was a major social theorist and political philosopher of the twentieth century,[2][3] and his account of how changing prices communicate information which enables individuals to co-ordinate their plans is widely regarded as an important achievement in economics.[4]
Hayek served in World War I and said that his experience in the war and his desire to help avoid the mistakes that had led to the war led him to his career. Hayek lived in Austria, Great Britain, the United States and Germany, and became a British subject in 1938. He spent most of his academic life at the London School of Economics (LSE), the University of Chicago, and the University of Freiburg.
In 1984, he was appointed a member of the Order of the Companions of Honour by Queen Elizabeth II on the advice of Prime Minister Margaret Thatcher for his "services to the study of economics".[5] He was the first recipient of the Hanns Martin Schleyer Prize in 1984.[6] He also received the US Presidential Medal of Freedom in 1991 from President George H. W. Bush.[7] In 2011, his article "The Use of Knowledge in Society" was selected as one of the top 20 articles published in The American Economic Review during its first 100 years.[8]
Early lifeEdit
Friedrich August von Hayek was born in Vienna to August von Hayek and Felicitas née von Juraschek. Friedrich's father, from whom he received his middle name, was also born in Vienna in 1871. He was a medical doctor employed by the municipal ministry of health, with passion in botany, in which he wrote a number of monographs. August von Hayek was also a part-time botany lecturer at the University of Vienna. Friedrich's mother was born in 1875 to a wealthy, conservative, land-owning family. As her mother died several years prior to Friedrich's birth, Felicitas gained a significant inheritance which provided as much as half of her and August's income during the early years of their marriage. Hayek was the oldest of three brothers, Heinrich (1900–69) and Erich (1904–86), who were one-and-a-half and five years younger than him.[9]
His father's career as a university professor influenced Friedrich's goals later in life.[10] Both of his grandfathers, who lived long enough for Friedrich to know them, were scholars. Franz von Juraschek was a leading economist in Austria-Hungary and a close friend of Eugen Böhm von Bawerk, one of the founders of the Austrian School of Economics. Von Juraschek was a statistician and was later employed by the Austrian government. Friedrich's paternal gradfather, Gustav Edler von Hayek, taught natural sciences at the Imperial Realobergymnasium (secondary school) in Vienna. He wrote systematic works in biology, some of which are relatively well known.[11]
On his mother's side, Hayek was second cousin to the philosopher Ludwig Wittgenstein. His mother often played with Wittgenstein's sisters, and had known Ludwig well. As a result of their family relationship, Hayek became one of the first to read Wittgenstein's Tractatus Logico-Philosophicus when the book was published in its original German edition in 1921. Although Hayek met Wittgenstein on only a few occasions, Hayek said that Wittgenstein's philosophy and methods of analysis had a profound influence on his own life and thought.[12] In his later years, Hayek recalled a discussion of philosophy with Wittgenstein, when both were officers during World War I.[13] After Wittgenstein's death, Hayek had intended to write a biography of Wittgenstein and worked on collecting family materials; and he later assisted biographers of Wittgenstein.[14]
At his father's suggestion, Hayek, as a teenager, read the genetic and evolutionary works of Hugo de Vries and the philosophical works of Ludwig Feuerbach.[15] In school Hayek was much taken by one instructor's lectures on Aristotle's ethics.
In 1917, Hayek joined an artillery regiment in the Austro-Hungarian Army and fought on the Italian front. Much of Hayek's combat experience was spent as a spotter in an aeroplane. Hayek suffered damage to his hearing in his left ear during the war,[16] and was decorated for bravery. During this time Hayek also survived the 1918 flu pandemic.[17]
Hayek then decided to pursue an academic career, determined to help avoid the mistakes that had led to the war. Hayek said of his experience, "The decisive influence was really World War I. It's bound to draw your attention to the problems of political organization." He vowed to work for a better world.[18]
Education and careerEdit
At the University of Vienna, Hayek earned doctorates in law and political science in 1921 and 1923 respectively; and he also studied philosophy, psychology, and economics. For a short time, when the University of Vienna closed, Hayek studied in Constantin von Monakow's Institute of Brain Anatomy, where Hayek spent much of his time staining brain cells. Hayek's time in Monakow's lab, and his deep interest in the work of Ernst Mach, inspired Hayek's first intellectual project, eventually published as The Sensory Order (1952). It located connective learning at the physical and neurological levels, rejecting the "sense data" associationism[clarification needed] of the empiricists and logical positivists. Hayek presented his work to the private seminar he had created with Herbert Furth called the Geistkreis.[19]
During Hayek's years at the University of Vienna, Carl Menger's work on the explanatory strategy of social science and Friedrich von Wieser's commanding presence in the classroom left a lasting influence on him.[20] Upon the completion of his examinations, Hayek was hired by Ludwig von Mises on the recommendation of Wieser as a specialist for the Austrian government working on the legal and economic details of the Treaty of Saint Germain. Between 1923 and 1924 Hayek worked as a research assistant to Prof. Jeremiah Jenks of New York University, compiling macroeconomic data on the American economy and the operations of the US Federal Reserve.[21]
Initially sympathetic to Wieser's democratic socialism, Hayek's economic thinking shifted away from socialism and toward the classical liberalism of Carl Menger after reading von Mises' book Socialism. It was sometime after reading Socialism that Hayek began attending von Mises' private seminars, joining several of his university friends, including Fritz Machlup, Alfred Schutz, Felix Kaufmann, and Gottfried Haberler, who were also participating in Hayek's own, more general, private seminar. It was during this time that he also encountered and befriended noted political philosopher Eric Voegelin, with whom he retained a long-standing relationship.[22]
With the help of Mises, in the late 1920s Hayek founded and served as director of the Austrian Institute for Business Cycle Research, before joining the faculty of the London School of Economics (LSE) in 1931 at the behest of Lionel Robbins. Upon his arrival in London, Hayek was quickly recognised as one of the leading economic theorists in the world, and his development of the economics of processes in time and the co-ordination function of prices inspired the ground-breaking work of John Hicks, Abba Lerner, and many others in the development of modern microeconomics.[23]
In 1932, Hayek suggested that private investment in the public markets was a better road to wealth and economic co-ordination in Britain than government spending programs, as argued in a letter he co-signed with Lionel Robbins and others in an exchange of letters with John Maynard Keynes in The Times.[24][25] The nearly decade long deflationary depression in Britain dating from Churchill's decision in 1925 to return Britain to the gold standard at the old pre-war, pre-inflationary par was the public policy backdrop for Hayek's single public engagement with Keynes over British monetary and fiscal policy, otherwise Hayek and Keynes agreed on many theoretical matters, and their economic disagreements were fundamentally theoretical, having to do almost exclusively with the relation of the economics of extending the length of production to the economics of labour inputs.
Economists who studied with Hayek at the LSE in the 1930s and