Born in 1899 Vienna
Studied with Ludwig von Mises
Moved to London, then to Chicago and
finally to Germany.
Won the Nobel prize in 1974
Business Cycle Theory
Hayek said “busts” were caused by bad
central bank policy.
If the bank lowered interest rates too much,
credit would be too easy to get.
People would make bad business
assumptions, and the hollowness of these
would eventually be discovered, resulting in
Hayek’s view of free markets and
Hayek said that the problem of communism
was that knowledge is diffuse. Central
planning assumes the planners know
everything necessary to run society. They
Free markets allow people to each make
decisions based on their area of expertise,
resulting in a “spontaneous” order.
“The peculiar character of the problem of a
rational economic order is determined precisely by
the fact that the knowledge of 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
---Hayek, The Use of Knowledge in Society
Hayek had many followers among the new
conservatives of the 1980s.
Margaret Thatcher said his The Road to Serfdom
was “what we believe.”
Ronald Reagan appointed many Hayekians to high
George H.W. Bush gave him the presidential
medal of freedom.
Jimmy Wales, the founder of Wikipedia,
has said that Hayek’s ideas of diffuse
knowledge inspired him to create an
encyclopedia anyone can edit.
Hayek NY Times Obit by Sylvia Nasar
Thatcher’s People by John Ranelagh
Jimmy Wales interview on Youtube
‘The Use of Knowledge in Society,” by F.A. Hayek
Hayek biography from Mises.org, by Peter G. Klein
Hayek article on econlib.org