Hayek is alive and well, and he has a lot to say. Special guests from the US and Europe were invited to the Hayek Institut, on November 7, for an all-day private conference on salient themes in Bruce Caldwell’s (Duke University) and Hansjörg Klausinger’s (WU Wien) newly at The University of Chicago Press published biography on F. A. Hayek, Hayek: A Life, 1899-1950. The 800+ page tome is but the first volume detailing an incredibly rich life. And its depth of analysis was matched by the all-day discussion.
Professor Klausinger was in attendance to summarize some of the book’s themes, especially those pertaining to Hayek’s personal life. The aloof economist was of the lower nobility (hardly the aristocrat his detractors portray him as). He grew up in a family of academics and scientists, with a deep respect for the vocation of the scholar. And yet he could break free of his family’s influence when it conflicted with his deepest convictions: Hayek never bought into his family’s tacit anti-Semitism; he freely circulated amongst purely Christian, purely Jewish, and mixed circles. The first volume concludes in 1950 as this watershed year witnessed Hayek’s move from the London School of Economics to the University of Chicago as well as his divorce from his first wife, followed by his second marriage.
What followed was a rigorous conference, chaired by Hayek Institut President and Oesterreichische National Bank Vice-President Barbara Kolm. The format derived from the famous Liberty Fund conferences, where the participants weighed in on three key components of Hayek’s thought and interwove them with debates today: Hayek, Keynes, and monetary policy; socialism and knowledge; and Hayek’s groundbreaking work The Road to Serfdom.
Some of Hayek’s noteworthy later ideas, such as the primacy of theory over statistics and the foundational role played by methodological individualism, were already present in his early economic works. Looming over parts of the discussion was the recently felled government of former UK Prime Minister Liz Truss, whose manifold differences from Iron Lady Margaret Thatcher were on display. Had Ms. Truss done as Ms. Thatcher and read Hayek’s works, she may still be in power. The ECB and its monetary policy were also hot topics of discussion, particularly as prudent bank policy seems increasingly to have given way to political whimsies. Hayek’s early works emphasize the avoidance of deficit spending as a therapy to economic downturns, since such policies distort the market and lay the foundations for the next, larger economic crisis.
On socialism and knowledge Hayek’s criticisms of a centrally planned economy remain as fruitful today as when he first expounded them in the 1930s. Principally, socialism adheres to the pretense of knowledge, that we know more about individual preferences than we really do, and that a more rational and just economy can be designed top-down. As one participant pointed out, one of the most telling pieces of evidence disproving the socialist pretense of knowledge is Mao Zedong’s “Great Leap Forward,” in which some 40-45 million people starved to death. No one comes close to proposing a repeat of Mao’s tragic experiment, though government expenditure as a percentage of GDP indicates that many countries are slouching towards central planning, and the negative ramifications of this are felt especially by businesses and entrepreneurs in Europe.
The seminar concluded with a heated and fruitful discussion of the work that catapulted Hayek to world fame: The Road to Serfdom. For Hayek, the USSR and fascism/Nazism represented two sides of the same coin: socialism and the repudiation of democracy. The book should not, however, be misconstrued as a prediction of the future, but rather as a warning should people rely too much on government solutions. Another problem, as many participants pointed out, is getting the message across to people who are uninterested or increasingly satisfied with their respective echo chambers. Think tanks and educators must operate on multiple levels: the deep philosophical level, various forms of media, and fostering networks between policymakers, businesspeople, and academics. The task is difficult, but not hopeless. Reasoned debate, much as what took place on November 7 at the Hayek Institut, is precisely what will safeguard individual liberty and prosperity.