Friedrich August Von Hayek

Friedrich Hayek by Rodrigo Moynihan, National Portrait Gallery, London

Friedrich Hayek by Rodrigo Moynihan, National Portrait Gallery, London

Friedrich August Von Hayek (pronounced HI-YACK) was born in Vienna in 1899 to an academic family. His grandfather was a companion of Eugen Böhm von Bawerk, one of the pioneers of the Austrian School of Economics. When Hayek was growing up, reading was one of his main hobbies.  

Then, World War I happened. He joined the Austrian army and fought on the Italian front. Hayek later described WWI as, “… a battle in which eleven different languages were spoken. It’s bound to draw your attention to the problems of political organization.”

After the war, Hayek started his education at the University of Vienna, and earned two doctorates: one in law (1921) and another one in economics and political science (1923).

Upon graduation, Hayek was hired by Ludwig von Mises in the Austrian Institute of Economic Research. At the time, hyperinflation was destroying economies of Germany and Austria to the extent that workers would demand half their daily pay at lunchtime so they could go out and buy necessities before the price of these goods would double or triple during the afternoon.

4 years later, in 1927, Hayek became the director of the Mises Institute, a position which he held until he left Austria to become a professor at the London School of Economics and stayed there till 1949. He met John Maynard Keynes in London. Their friendship lasted despite all the severe disagreements between these two economic minds.

After the World War II, he was not optimistic about the future of liberty in the world. Therefore, he organized a conference and invited some of the intellectuals of that era, such as Milton Friedman, Ludwig von Mises, Karl Popper and Frank Knight to discuss the state and fate of classical liberalism. The conference was convened on April 10, 1947 in Mont Pelerin in Swiss. Although it was meant to be a one-time thing, the participants decided to continue the meetings, and the Mont Pelerin Society was formed. 

Hayek was an advocate of the Austrian School of Economic Thought, while he also collaborated with Chicago and Ordo Schools of Economics. All these Schools, along with London School of Economics were the main opponents of the Keynesian School of Economic Thought.

Friedrich Hayek receiving his Nobel Prize in 1974 / AP-Photo

In 1974, he shared the Nobel Prize in Economics with the Swedish economist Gunnar Myrdal. The funny thing here is that these two economists are completely different from each other in every possible aspect. Myrdal was one of the pioneers of the Keynes monetary theory and also one of the leading theoreticians of the Swedish Social Democracy, while Hayek was a strong critic of any idea related to socialism.

In his Nobel Prize speech, he asserted that, “… I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it. It is that the Nobel Prize confers on an individual an authority which in economics no man ought to possess.”

Hayek died in 1992 in Freiburg, Germany. He was an agnostic since he was 15.

 

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Further reading

Friedrich Hayek | Mises Institute

Friedrich A. Hayek (1899-1992)

The clash between Keynes and Hayek defined modern economics

The Dream of the Mont Pelerin Society

The Intellectuals and Socialism by Hayek

Hayek on the Socialist Roots of Nazism

Myrdal and von Hayek Share a Nobel

Friedrich August von Hayek – Banquet Speech

Friedrich August Hayek

 

 

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