Book Description
In this insightful study, Barbara M. Rowland analyses and critiques Friedrich Hayek's political philosophy. Beginning with a discussion of Hayek's sceptical epistemology and critical rationalism, the author explores his view of the evolution of civilization, his pessimism about human agency and an accompanying faith in the forces of cultural evolution. She goes on to offer a detailed examination of the inconsistencies in Hayek's philosophy with regard to individual liberty. She then argues for an expanded understanding of liberty and suggests new directions for a philosophy of individual liberty. ... Read more

Book Description
Friedrich A. Hayek is the fourth work in the Routledge Series of Critical Assessments of Contemporary Economists. The series presents a comprehensive selection of the critical literature commenting on the life and works of a major contemporary economist. Friedrich A. Hayek is one of the most important economists of the twentieth century. He played a key role as one of the premiere defenders of the free market, stressing the benefits of personal liberty and the market economy, and arguing against economic planning. As a result, his work is of major significance to philosophers and political thinkers as well as to economists. As a leading proponent of the Austrian School, Hayek wrote on the trade cycle, elaborating the work of von Mieses. He also examined monetary theory, and in the 1930s, was a vigorous opponent of Keynes.

Hayek was born in Vienna in 1899 and served as Director of the Austrian Institute of Economic Research. He was Professor ofEconomics at LSE, the University of Chicago, and the University of Freiburg, and was awarded the Nobel Prize for Economics in 1974. These volumes provide students of economics, politics, and philosophy with immediate access to Hayek's contributions and show how his work has been received and modified by others. ... Read more

Book Description
This digital document is an article from The Cato Journal, published by Cato Institute on January 1, 2002. The length of the article is 2991 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available in your Amazon.com Digital Locker immediately after purchase. You can view it with any web browser.

Citation Details
Title: Lange and Hayek revisited: lessons from Czech voucher privatization.(Oskar Lange, Friedrich A. von Hayek)(Statistical Data Included)
Author: Jan Hanousek
Publication: The Cato Journal (Refereed)
Date: January 1, 2002
Publisher: Cato Institute
Volume: 21Issue: 3Page: 491(8)

Article Type: Statistical Data Included

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Book Description
Hayek continues to have a huge influence and this collection charts the various responses to his work up to the present day, addressing the many and multifaceted contributions that he has made to the study of economics and to the social sciences as a whole.

Hayek's reputation has gone through a remarkable cycle. An eminent exponent of the Austrian theory of business cycles in the 1930s, he was worsted in the controversy over Keynes' Treatise on Money (1930). Following this defeat, Hayek retreated into capital theory, an esoteric branch of economics in which few economists then took an active interest. He gave up economics altogether after the war and turned to psychology, political philosophy, philosophy of law and the history of ideas. However, in 1974 he won the Nobel prize and returned to mainstream economics as a leading critic of Keynesianism andan advocate of free banking as the answer to inflation. Today Hayek reigns supreme as the kind of moral philosopher and political economist that economics has not seen since Adam Smith.
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Book Description

Customer Reviews (5)

Wide Ranging, Lively and Clear
This is one of the best non-fiction books I have read in a long time.I have no idea how I came to buy this - I rarely read biographies, consider myself left-wing, am a computer programmer who was educated as a physicist (so have no background in economics), and only vaguely recognise his name - so must assume someone recommended it to me.Whoever that person was: Thank-you!

I think there are two things that makes this such a good read.Most important is the subject matter - Hayek seems to have been a pretty smart chap who was interested by, and contributed to, a wide range of subjects, at a time (the latter 2/3s of the twentieth century) when a lot was happening.And because he kept shifting fields and, to some extent, revising his opinions, you get to watch the evolution of a wide range of disciplines.

So this book touches on subjects like scientific methodology; emergent behaviours; how money acts as a way to signal information; the foundations of economics (do you have to assume everyone is "perfectly greedy", for example?); models of consciousness; evolutionary biology and group selection - interesting problems that are relevant today, presented in a historical context that is extremely helpful in understanding their peculiarities.Maybe it sounds crazy (or stupid), but until I read this book I had no idea how history could be so useful, relevant and informative.

Much credit must also go (my "second reason") to the author - I think this is impressively well written.Caldwell is a very careful guide who takes pains not only to justify what he says, but also gently directs you through what could be a terribly confusing and complex journey by identifying common threads, summarizing discussions, and repeatedly placing everything within its proper context.Please write another book (how about Popper?)!

Are we having fun yet?
I do not know who the target audience was here, but it certainly was not me, and I am a big Hayek fan. This book is way over my head. Perhaps a doctorate in economics or philosophy would make this work easier to read, but I don't think the average intelligent, interested reader will want to struggle though this material. It never comes up for air.

An other opinion heard from
First off, I want to echo the other reviewers in my praise for the book.The background in economic history was valuable to me and helps put the work that Hayek did into perspective.Though it may be "academic" (any look at the philosophy behind economics is probably not for the same audience as more instrumental books -- like "How to be successful" or whatever).That being said the book is well written and if anyone is interested in the influence of positivism on economics, the division of psychology and economics into separate disciplines, the roots of socialism and other foundational material, this book presents that information in a logical, clear way.

It cautions at the beginning that Hayek's work was complex and interdependent.There is a tendancy to take a paragraph by Hayek from one place and use it as a representation of the whole, like the blind men and the elephant.I would suggest strongly that to call him foundational in the current US conversativism is probably wrong.One clue is that as an extra to the "Constitution of Liberty" there is an essay by Hayek called "Why I am not a conservative."

Hayek was fascinated with "knowledge" in the sense that somehow humans manage to coordiante activity and believe that we share knowledge, but in reality it is not possible.Each of sees what we see and we do not see what others see.Somehow, unconsciously, we have evolved a way of being able to use the knowledge of others as well as our own.

His argument against socialism was basically that it breaks some of the ways of knowing what others are doing.A standard definition of Economics is that it is about how people make decisions in conditions of scarcity.In other words, there is an assumption that there is never enough to go around.If you think about it, even people with virtually unlimited amounts of money still compete with each other for status and other such things.We are all often in a position that if we choose X, then we cannot have Y.

Hayek thinks that that decision should be left up to the individual.He says that the mistake that people who believe that scientific central planning make is that they believe there is more of a consensus that there is.Someone's choices wind up overriding other's choices.There is more to it than this, but this is the basis of the argument.It is simple and not really one that falls easily on a liberal/conservative spectrum.

It is, however, probably the source of the claim that he is "conservative."Maggie Thatcher was a fan of Hayek as was, apparently, Ronald Reagan. It can be construed that the opposite of governments actively trying manage economies is lazie fare, hands off, anything goes conservativism.But that would be a misreading of Hayek and simply because a conservative likes Hayek's arguments about one topic does not make Hayek a conservative.

There is another point where Hayek would probably diverge widely from current "conservatives."By popular demand the borders in the US are getting tighter.For instance, it is now difficult to come back and forth from Canada, foreign graduate students are looking elsewhere, the "conservative" governor of California (himself an Austrian and alledgedly a fan of Hayek) is supporting vigilanties to prevent border crossings from Mexico.It does not seem that this is condusive to "knowledge" in the sense that Hayek uses it, as something that is distributed throughout humanity.

Hayek's greatest interest was in how we each take our little snapshot of the world and interact with others to build stable social structures without any direction. It is not that someone decides that we should have a structure like such and such, we find that these structures are there and we can all recognize them. In a way, he is talking about the "invisible hand" of Adam Smith.Somehow we coordinate activity so that I can be writing this right now on a computer I got somewhere, a DSL connection and so on and I have not talked to the people involved with making it happen, they have not talked to each other and no one directed them to do it.

Hayek is interested in the rules that make that happen.Now we talk of complex adaptive systems and the idea of "spontaneous order" is widely studied to day. Current work on "connectionist networks" now mention Hayek.He was way ahead of his time.

I also want to point out that even though some call him "the father of libertarianism" he was not against governments making rules that cause markets to function better, for instance, regulation against monopoly.Libertarians were up in arms against the threatened breakup of Microsoft, something Hayek would not have been against in principle.

I hope more people will read this book.It is remarkable how many ideas we think are brand new have been around for a while.This book helped me understand how they got sidelined.It is really a lively book, filled with people as well as ideas, which is important, because sometimes politics trumps insight.Hayek's remarkable ideas are just beginning to be widely noticed and recognizing what is happening is an exciting benefit of this book.

Amazing bio of an amazing thinker!
Tasked with the need to understand a contemporary, conservative thinker in a doctoral course on social justice, I was enriched by the professor's suggestion that I focus on Hayek. In due course I came upon this book by Caldwell. I wish to echo the earlier reviewers praise - this book is everything an intellectual history should be. The reader will become intimately familiar with the historical antecedents to Hayek, the academic, cultural, and historical milieu in which he worked, and the likely future his ideas will have.

I approached this book as a complete novice. I had never heard of Hayek, and frankly, reading this book stretched my 18 hours of undergraduate economics about as far as they could be stretched, but I was left with an astonishing respect for this economist turned political theorist. How is it possible that Hayek could have escaped my notice for 50 years?

One hundred and thirty pages are devoted, not to Hayek, but to Austrian school economics (i.e. - subjective value, marginalism, entrepreneurship) and its founder Carl Menger. Caldwell introduces key figures in the Austrian school at length (Bohm-Bawerk, Wieser, and Mises) as well as the chief protagonists of the school (German historical, socialism).

Into this fray comes Hayek, an ambitious but not a particularly aggressive academic. Any attempt at summarizing Hayek's thought is easily criticized, but from my personal perspective, Hayek seems to have been a master at synthesis. He linked what today would be called cognitive psychology with philosophy to produce an epistemology that is foundational to all his subsequent work. Further, he linked this epistemology with social evolution to explain social advance, social stability, and social institutions and values.

Epistemologically, Hayek understood human beings to possess a subjective ignorance. He denounced the "rational economic man" as a fiction, but asserted the importance of the free market supply/demand pricing mechanism. Without this pricing mechanism, economic planning was doomed to inefficiency and competitive disadvantage while the individual was cast adrift without any objective anchors with which to make decisions. Without the freedom to pursue subjective goals, however ignorant, there was no individual liberty.

It was from the random and chaotic subjectively ignorant decisions of the individual that social institutions evolved (i.e. - order out of chaos). The fittest of these social constructs prevail over time and form the framework of stability essential for the maintenance of a free marketplace and for the subjective projection of future value.

Hayek was awarded a Nobel Prize for economics in 1974 and the American Medal of Freedom in 1992 by then president George Bush, Sr. After spending a semester reading about this man and his ideas, I have become convinced that Hayek is a foundational thinker undergirding the conservative resurgence in America during the past 40 years. It is unlikely that there will ever be a finer intellectual biography than that provided by Caldwell. Everyone interested in social policy, social justice, and contemporary trends should become familiar with this book.

One last warning, Caldwell writes as an academic for academics. Footnotes abound, and there are four appendices directed at specialists. A lay reader will frequently realize that he cannot appreciate all of the subtle points that Caldwell is making. Despite these facts, this is a readable book worth the effort.

Caldwell, B. Hayek's Challenge
On the plane to and from the Southern Economic Association meetings in San Antonio (including a 3 hour delay in Dallas on the way home) in November I had the opportunity to read the best book written in Austrian economics in a generation -- Bruce Caldwell's Hayek's Challenge (University of Chicago Press, 2003). Caldwell, as to be expected, is a master historian of thought and constructs a narrative of Hayek's evolution of as a thinker that is simply better than any alternative account. And, in the process, Caldwell tells the story of the development of Austrian economics from Menger to today better than I have ever seen. This is a phenomenal work of scholarship and a beautifully written book. The book represents the history of economics as it should be written --- a subtle treatment of economic doctrine, contextualization of the evolution of argument within its broader history of philosophical, political and economic debates, and engagingly written. As far as economics goes, this book is a page turner. It is nothing short of a brilliant. Bruce Caldwell has written, in my opinion, the best book in economics for 2003. ... Read more

Customer Reviews (2)

Hayek's contribution to psychology (not merely a Nobel laureate in economics)
The archives at the Hoover Institution in Stanford house the original manuscript in German that Hayek wrote when he was torn between pursuing psychology or economics. Decades later, that manuscript was published as The Sensory Order. Although this is the less known piece by Hayek among economists, it is considered by many pioneers in cognitive science (such as Gerald Edelman, see Neural Darwinism) as foundational in the development of this interdisciplinary study and the examinations into artificial intelligence. The principal thesis of Hayek's piece is that perception cannot be accounted for by means of physical laws, since the effect of sensory stimulus is the first aspect of the complex order of perception. Next, the mind maps the order of the external stimulus. This perceptual experience, however, is not identical to any other from a similar external stimulus since each has its own character in relation to the associations that the mind assigns to any particular sensory experience. Our perception of external objects are, Hayek writes, "never of all the properties which a particular can be said to possess objectively, not even only some of the properties which these objects in fact possess physically, but always on certain aspects, relations to other kinds of objects which we assign to all elements of the classes in which we place the perceived objects." This observation thus anticipates the monist framework presented by Maurice Merleau-Ponty in his Phenomenology of Perception. This fascinating book is a must read for anyone interested in the mind.

Neglected masterpiece
Although Hayek's influence on economics and political science has been profound, his work in psychology, of which this book is the sole product, is still relatively unknown.This is unfortunate, not only because Hayek is a great psychologist, in the same league as Helmholtz, Fechner, and Freud, but also because his more influential work is often based on the conceptual framework established in The Sensory Order.I can think of several reasons for the neglect of this book.First, it is not easy to read.Despite a lucid style, the ideas contained are so complex and expressed in so compressed a form that several readings are required to fully appreciate them.Second, the ideas are so revolutionary that we still fail to grasp their implications, though even Hayek himself, it should be said, failed to address them adequately. Hebb's Organization of Behavior, the first explicit proposal of Hebbian learning and cell assemblies, and Gallistel's Organization of Action, a compilation of classic works on motor coordination, contained similar ideas, but they are nowhere as original and profound as this book. ... Read more

Customer Reviews (1)

The Economics of Planning Starts Here
This book is not widely known, but it is very important. Chapter three is its centerpiece: Economic Calculation in the Socialist Commonwealth, by Ludwig von Mises. The Mises essay effectively launched the Socialist Calculation Debate. The fundamental point here is simple. Rational planning of production in a modern economy requires market prices for capital goods and labor. By modern economy I mean an exchange economy with extensive division of labor and highly varied final goods. This is not a problem of simple or primitive economies. The details of this argument. Prices serve as a means of communication in coordinating the production of many goods through complex and lengthy stages.

Chapters two and four get less attention because the names of the authors are less known. This is unfortunate, especially for chapter two (by N Pierson). Chapters one and five are the editor's introduction and conclusion. These are not simple end-caps to the book. In chapter one the editor (Hayek) sorts out a number of basic issues. In chapter five the editor makes a forceful case against the proposals of HD Dickinson.

The essay by Enrico Barone is where it belongs, as an appendice. Barone's essay is a good example of how to avoid the real problems of economics. Barone focuses mainly on static equilibrium conditions. Since the truly insurmountable problems of socialism are dynamic, Barone could not understand them with his method.

Collectivist Economic Planning is important for two reasons. It is a book of historic importance. This book was a critical part of the history of twentieth century economic thought. It is important also because it contains a set of timeless theoretical insights into the workings of socialism (along with the 1922 book Socialism, an Economic and Sociological Analysis). While the average reader will find this book uninteresting, those serious about political economy should read it cover to cover. ... Read more

Customer Reviews (2)

Good Overview of the Keynes-Hayek Episode
The reviewer Mr. Brady attempts to dismiss the work of Hayek because of his failure to adequately distinguish between fixed and circulating capital, in addition to paying insufficient attention to the role of uncertainty.
This observation is admittedly partly true.When Hayek began his work on business cycle theory, he paid very close attention to equilibrium analysis, believing that any explanation of downturns would have to include equilibrium statics if it hoped at all to be tenable.Hayek brought this belief over with him to the LSE and used it to criticize the theories of Maynard Keynes, who failed to incorporate a robust theory of capital structure into his account of economic disruption(according to Hayek).But if Mr. Brady bothered at all to read the excellent introduction to this volume by Bruce Caldwell, all of this would be clear.Hayek increasingly came to abandon equilibrium analysis in favor of a theoretical view that consistently embraced subjectivism and uncertainty.It is on this point that I wish Mr. Brady would have extended his last sentence into a fuller discussion of the fundamental differences of Mr. Keynes and Mr. Hayek with respect to their overall economic outlook given their beliefs in ineradicale uncertainty.Hayek does seem to place excessive faith in the capabilities of the market system, but Keynes, while justifiably remaining sceptical, demands repeated acts of government intervention as the means of avoiding the errors that attend the arena of uncertainty.These two positions are interesting, if only because their discovery of the uncertainty principle led them to adopt positions that occupied two extremes.I believe Keynes was right in attacking neoclassical economics and its program of economic efficiency in the absence of government regulation.But it in no way follows that a theory of chaos and confusion (uncertainty) should commit us to a position or policy of rigid rule-making.Such activity may very well exacerbate this perpetual state of ignorance that we find ourselves in daily.Keynes, with his emphasis on uncertainty, cannot have his cake and eat it too.A consistent application of uncertainty would, in my view, seem to distance us from both a commitment to laissez-faire and government regulation.


Anyway, if the above paragraph interests anyone, then this is a book that is worth reading.The debates between Hayek, Keynes and Sraffa are fascinating, and shed considerable light on some of the most fundamental questions of economic theory.Bruce Caldwell's introduction is worth the price of the book alone.

The difference between fixed and circulating capital is fundamental
This particular volume of Hayek's collected works covers the very important exchanges between Hayek and Keynes over Keynes's theories of investment and capital originally put forth in 1930 in the Treatise on Money(two volumes).Keynes's General Theory(1936) approaches to investment and capital are the same as in the TM except for Keynes's decision togreatly emphasize the importance of the uncertainty of the information and knowledge base(or,in Ellsberg's terminology,the ambiguity of such information and knowledge) in economic decision making concerning future events(about investment in fixed capital subject to technological change and obsolescence) where the probabilities are both unreliable and unclear.Keynes and Hayek have completely oppositepositions concerning the differences between fixed capital,subject to the impact of uncertainty in decision making,and circulating capital,subject to the impact of risk,but not uncertainty.Hayek is very clear-there is no fundamental difference between fixed capital and circulating capital:"To over-emphasize the distinction between fixed and circulating capital,which is, at best,merely one of degree,and not by any means of fundamental importance,is a common trait of English economic theory and has probably contributed more than any other cause to the unsatisfactory state of the English theory of capital at the present time".(Hayek,p.177;see also pp.86,99-100,103-108,168-170,etc.).Hayek's misbelief that he could present a theory of capital that abstracts from uncertainty is in direct contradiction to Keynes's theories that argue[for a modern ,mathematical treatment of Keynes's theories,see any article or book by Dixit and Pindyck on the "real options" approach to investment projects that are fixed(sunk ,durable capital)]that uncertainty and/or ambiguity is fundamental and any attempt to abstract from it can only result in a very special theory applicable in conditions where there is no uncertainty.This book shows the immense gulf that separated Keynes and Hayek intellectually.While Hayek would later acknowledge the importance of uncertainty after the appearance of the General Theory,uncertainty has NO impact at all in the final conclusions reached by Hayek concerning investment and the business cycle.Since uncertainty makes absolutely no difference in the final decision outcome,there is no difference at all between Hayek and a neoclassical economics based on the Ramsey,De Finetti,and Savage subjective approach to decision making. ... Read more

Book Description
A classic work in political philosophy, intellectual and cultural history, and economics, THE ROAD TO SERFDOM has inspired politicians, scholars, and general readers for half a century.Originally published in 1944 - when Eleanor Roosevelt supported the efforts of Stalin and Albert Einstein subscribed to the socialist program - it was seen as heretical for its warning against state control over the means of production. For Hayek, the collectivist idea of giving government more economic control led not to Utopia but to Nazi Germany and fascist Italy. Since then, it has established itself alongside the works of de Tocqueville, Mill and Orwell for its warning on the tradeoff between individual liberty and government authority.

"This book has become a true classic: essential reading for everyone who is seriously interested in politics in the broadest and least partisan sense..." (From Milton Friedman's Introduction) ... Read more

Customer Reviews (1)

When democracy becomes dominated by a collectivist creed, democracy will inevitably destroy itself
F. A. Hayek (1899-1992), recipient of the Medal of Freedom in 1991 and co-winner of the Nobel Memorial Prize in Economics in 1974, was a pioneer in monetary theory and the principal proponent of libertarianism in the twentieth century.In this book written in 1944, Hayek expertly refutes socialist schemes and shows the utter peril that socialism poses to individual freedom.We were warned in the 19th century by one of my favorite historians, Lord Acton, "that socialism is slavery".Hayek expertly points out throughout the book how democracy is no safeguard to economic freedom.He does this by pointing out the command economy structure that was instituted in Great Britain to show how individual freedom was stolen from the individual by the "economic interventionists" in the government. One of Hayek's most prescient quotes is; "When democracy becomes dominated by a collectivist creed, democracy will inevitably destroy itself."Hayek points to how most politicians feel they need to use government to plan the economy of a nation."Planning is a synonym for socialism and a small step away from communism.He ably refutes Keynesian theory throughout the book.This is an easy to read and understand book that should be read by all who wonder what role the government should have on our economic choices.

As a retired Army officer and student of political philosophy, I recommend this book to anyone who is interested in political philosophy, economic theory, and history.
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Book Description

First published in 1969

Customer Reviews (1)

Economics re-visted
This collecion of essays provides critical insight into the pitfall of economic reality by helping the reader remember how little value economic analysis is without sufficient fact supporting theory - it provides the reader a framework to build solid arguments without manufature of theoretical proofs. The collection is well suited for use as a graduate level economic studies course reader. ... Read more

Customer Reviews (1)

Are You a Good Swimmer?
Hayek uses flawless logic to prove that Keynesian economics, which is touted today as our own modern monetary policy, is inflationary economics.The end result of this application can only be a situation which is worse than the one it was intended to remedy.Hayek proves that individualsacting independently are unable to provide the consistent statisticalinformation necessary on which to base an ordered economy.Hayek thenexplains how Keynes' pursuit of a perfect monetary policy will never berealizedbecause artificial intervention can only produce inflationism. Hayek's focus throughout the book on the temporary fix versus long-termconsequences now has me watching our present government and its monetarydecisions in a new light.In 1979, Hayek showed what is happening todaywith perfect clarity.Every act of intervention brings about a need formore.Hence, his title "A Tiger by the Tail".Once we havegrabbed a hold we cannot let go and are inevitabily dependent upon thegovernment to bail us out and keep us afloat.If you read this book, youdon't have to believe...just be a good swimmer. ... Read more