Friedrich von Hayek

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Nobel prizewinning (economics) student of Ludwig von Mises, and a major propagandist for libertarianism.

Friedrich von Hayek created a large and self-contradictory volume of writings over a long lifetime in several fields. Widely regarded as brilliant, nevertheless some of them were dreadfully wrong. For example, The Road To Serfdom, was as badly wrong as "Dow 36,000". His Business Cycle Theory is considered outright wrong, except by zealots.

Interpreting Hayek's work is comparable to interpreting the Bible: no interpreter can fully reconcile everything without resorting to the most ludicrous apologetics. Like the Bible, support for almost any position can be found. For example, Hayek included quite a number of non-libertarian statements and support for social welfare. Cynics would think those were made to mollify liberals, provide plausible deniability, or provide breathing room for the requirements of propaganda. And they come embedded in enough unclear verbiage that any particular implementation of them could be criticized for not meeting Hayek's requirements.

Given that Hayek was a propagandist, it would be difficult to take his works at face value, even if face value could be determined. But if you look at Hayek's actual jobs and how he devoted his energies, they were always in service to the rich and powerful, starting with the Vienna Landlords Association. Hayek never held an academic position that wasn't funded by the wealthy.

Greg Ransom seems to be the chief internet proponent of Hayek fundamentalism, and is usually quick to reply to any criticism of Hayek with weak arguments.


Debunking Austrian Economics 101 [More...]
More than 370 posts with meticulous references arranged in 46 categories from the blog "Social Democracy For The 21st Century: A Post Keynesian Perspective". An enormous scholarly resource for refuting numerous Austrian Economics claims. Highly recommended.
Hayekian (propaganda) (2 links)
Almost any reference to Hayek. A political viewpoint masquerading as economic science. A dog whistle signifying rejection of Keynesian ideas.
Against Hayek [More...]
"Hayek and his followers have grossly overestimated the difficulties of carrying out rational socialist planning. They have coupled this with an exaggerated idea of the effectiveness of the free market as an economic regulator."
Daniel Davies Watches The Hayekian Yahoos Attack The Late Tony Judt [More...]
Brad Delong describes the three Hayeks: the brilliant, bonkers, and wrong.
Defending Boilerplate Hayek [More...]
Some plausible advice on interpreting Hayek, once you understand that "The Great Society" is society run in the interests of the wealthy few. Starts with "Arguing Hayek can be unclear is arguing water can be wet."
Fanatical, Not Reasonable: A Short Correspondence Between Walter E. Block and Milton Friedman (on Friedrich Hayek ’s Road to Serfdom) [More...]
Milton Friedman did not like Walter Block's review of Friedrich von Hayek's The Road to Serfdom. Friedman is very harsh: "you are a fanatic who finds it absolutely impossible to understand the thinking of anybody other than himself." Block is a smarmy, absolutist gasbag in response.
Fascism (5 links)
Libertarians frequently have show strong support for fascists. Ludwig von Mises for Mussolini and Friedrich von Hayek for Pinochet come to mind immediately.
For years many of us suspected that Austrian economists were just peddling bullshit... now we have proof! [More...]
A picture is worth a thousand words: the best picture ever of Hayek.
Free Banking (1 link)
The idea of replacing central banks by allowing banks to issue their own currencies, with or without various backings. An idea revived by Friedrich von Hayek, with a literature of supposed historical examples. Free banking has many problems.
Friedrich Hayek Joins Ayn Rand as a Hypocritical User of Medicare [More...]
"This should put Hayek in some sort of libertariam circle of hell, along with Ayn Rand, who took Medicare and Social Security payments when she was diagnosed with lung cancer."
Grand Old Marxists [More...]
"[Ayn Rand and Hayek] relied on some of the same underlying assumptions as Marxism itself: that politics is a matter of one simple truth, that the state will eventually cease to matter, and that a vanguard of intellectuals is needed to bring about a utopia that can be known in advance." Paul Ryan relies on this nonsense.
Greg Ransom, self-appointed high priest of Hayek, gets smacked down as a troll in Crooked Timber. [More...]
Greg Ransom apparently watches for new Hayek mentions on blogs, and generally claims they all misrepresent Hayek. Except the ones he sides with.
Hayek Meets Information Theory. And Fails. [More...]
Modern economic theories of prices-as-information are seventy years out of date.
Hayek von Pinochet [More...]
"Farrant et al demonstrate that Hayek’s support of Pinochet was not contingent or begrudging -- an alliance of convenience due to Pinochet’s embrace of free market economics -- but was rather the product of two longstanding ideas and commitments."
Hayek, Friedman, and the Illusions of Conservative Economics [More...]
Robert Solow's review of "The Great Persuasion: Reinventing Free Markets since the Depression" By Angus Burgin. His view of the Mont Pelerin Society's transition from the leadership of Friedrich von Hayek to Milton Friedman.
Hayek, the Common Law, and Fluid Drive [More...]
"Hayek’s confusion of customary and common law ultimately caused his argument for the law of liberty to crash."
Hayek, the Mind, and Spontaneous Order: A Critique [More...]
Richard Posner finds Hayek's refutation of universal central planning to be useless in real-world mixed economies. He points out Ronald Coase has shown that central planning works better than markets for some problems, hence firms (including governments.)
Hayek: The Iron Cage Of Liberty (book)
How 'Keynes' Became a Dirty Word [More...]
Noah Smith sez: If you use the word "Keynesian" as a synonym for "socialist," "progressive," or "liberal," well my friend, you’re doing it wrong. Hayek's propaganda, pushed over a period of a half century, has tarbrushed Keynes' ideas.
How Hayek’s Evolutionary Theory Disproves His Politics [More...]
"He was arguing with Stalin, not Norway."
How the New Classicals drank the Austrians' milkshake [More...]
"It seems to me that the Austrian School's demise came not because its ideas were rejected and marginalized, but because most of them were co-opted by mainstream macroeconomics [...] I'm pretty confident in saying that the paradigm of von Mises and Hayek is dead."
Is “Know It When I See It” Enough? [More...]
"Spontaneous orders arise out of planned, intentional actions, so the phenomenon of spontaneous order cannot counsel us against planned, intentional actions. Since constructivism is a component of spontaneous order, spontaneous order gives us no traction for a critique of planning."
Keynes versus Hayek (11 links)
There has been a continuous drumbeat of promotion for Hayek from conservatives and libertarians since the 1940's. Recently, there has been extensive propaganda use of Hayek's ideas to oppose Keynesian ideas. The propaganda often attempts to show two theories as equal in standing. But Keynes resoundingly defeated Hayek, despite recent libertarian historical revisionism.
Local Knowledge (5 links)
Another propaganda term popularized by Friedrich von Hayek. AKA metis. It distracts from the fact that knowledge exists at different levels. No one level of organization is the true possessor of all knowledge, and so no one level of decision making is sufficient. The federal/state/county/local governance system recognizes this truth. Big business has just as much a problem with "local knowledge" as "big government". Creative Destruction also throws away local knowledge.
Ludwig von Mises Explains (and Solves) Market Failure [More...]
David Glasner points out that Hayek was not a libertarian and Mises supported conscription and taxes. "[Mises] says that voluntary self-defense will not work. Why won’t it work? Because the market isn’t working."
Mad Marx: The Class Warrior [More...]
A good take on Mad Max, also featuring Rand and Hayek. The only big errors are that Rand wasn't smoking and Rand was much fatter.
Making Sense of Friedrich A. von Hayek [More...]
One of Brad DeLong's attempts to understand Hayek. "My hypothesis is that the explanation is theology: For Hayek, the market could never fail. For Hayek, the market could only be failed. And the only way it could be failed was if its apostles were not pure enough."
Masters of the Universe: Hayek, Friedman, and the Birth of Neoliberal Politics (book)
"Based on archival research and interviews with leading participants in the movement, Masters of the Universe traces the ascendancy of neoliberalism from the academy of interwar Europe to supremacy under Reagan and Thatcher and in the decades since."
Mises and Hayek Dehomogenized?: A Note on a Schism in Modern Austrian Economics [More...]
Some fratricidal minutiae of Austrian economics. "Both Misesians and Hayekians live in a fantasy world, with respect to the price system." You can skip the technical parts to appreciate the fanaticism of both sides.
Mont Pelerin Society (5 links)
An international organization founded by Friedrich von Hayek to promote neoliberalism. Where the Koch brothers found their kindred spirits. One of the many vast, right-wing Conspiracies.
On the Relevance of Hayek and Bastiat [More...]
Hayek's essay "would have been greatly strengthened if he’d acknowledged the limits of markets in coordinating dispersed knowledge". "Bastiat is right within the confines of his own examples, but really the real world throws up so many confounding factors that there is no need to invoke him in contemporary debate."
Ruizismus among the Austrians [More...]
David Warsh points out that conservatives are puffing the reputation of Hayek far beyond what is realistic. He identifies this as due to political interest. "But the fact remains that Hayek just didn’t contribute very much to the development of technical economics."
Socialist Calculation Debate (7 links)
A debate about how a socialist economy would be able to allocate resources between goals without resort to capitalism. The debate tends to ignore the fact that Communist and wartime command economies did very well with centralized planning. Not to mention Walmart. This is a zombie issue: it was decisively settled by the idea of market socialism (now instantiated as Social Wealth Funds) because markets are not exclusive to capitalism.
Some Problems with Spontaneous Order [More...]
"It is not possible to distinguish in principle, either descriptively or normatively, between spontaneous and constructed orders. Instead, the difference depends entirely on the observer’s frame of reference." A convincing explanation of how Hayek pulls a hand-waving fast one.
Spontaneous Order (9 links)
Use of "spontaneous order" by libertarians is a propaganda term popularized by Friedrich von Hayek. It is meant to imply that no design is needed to create the order, while distracting from the fact that real human environments have major designs such as property and other institutions. Any environment will have a spontaneous order, whether or not any part of it is designed, coerced, or planned. Often these are (or result in) Unexpected Consequences. Nor are spontaneous orders likely to be maxima.
The Crisis of Public Reason [More...]
Phil Agre provides one of the most compact insights into modern public discourse ever written. And wallops Hayek in the process.
The Curse Of TINA [More...]
How think tanks arose (in Britain) to "become a branch of the PR industry whose aim is to do the very opposite -- to endlessly prop up and reinforce today's accepted political wisdom." Points out how Hayek described their function as selling second hand ideas.
The Road to Serfdom (book, online) (4 links)
(1944) Friedrich von Hayek's comically failed prediction of the coming totalitarian socialist state in western nations.
The Road to Serfdom (Comic Book) [More...]
Friedrich von Hayek's propaganda simplified for the masses. A comically failed prediction of the coming totalitarian socialist state in western nations.
The Strange Case of Dr Hayek and Mr Hayek [More...]
An excellent overview of Hayek's life and career, giving good weight to his failures and inconsistencies. There is also a long appendix about the socialist calculation debate.
The ‘Mirage’ of Social Justice: Hayek Against (and For) Rawls [More...]
An academic paper which argues that Hayek is a closet Rawlsian / egalitarian liberal who reaches inegalitarian conclusions only via equivocation and implausible empirical claims.
Thomas Paine’s “Agrarian Justice” and the Origins of Social Insurance [More...]
Thomas Paine proposed the first realistic plan to abolish poverty on a nationwide scale, a universal social insurance system comprising old-age pensions and disability support, and universal stakeholder grants for young adults. Compared to Condorcet, Locke, Spencer, Rawls and especially Hayek.
Unmade, Amoral Orders Composed of Made, Moral Orders? A Response to John Hasnas [More...]
"Hayek has given insufficient ground for distinguishing a constructed from a spontaneous order. Indeed, the basic problem is that Hayek incorporates constructed orders into his definition of spontaneous orders, resulting in a sort of logical nesting doll or fun-house mirror in which any action can qualify as constructed or spontaneous depending on how one frames the issue."
What was the Greatest Mistake of Lionel Robbins’s Life? [More...]
Lionel Robbins (who brought Hayek to LSE) recanted his opposition to Keynes and support of Austrian business cycle theory, considering it the greatest error of his career.
Why libertarians apologize for autocracy [More...]
Ludwig von Mises, Friedrich von Hayek, Milton Friedman, the Cato Institute and Hans-Hermann Hoppe all have expressed preferences for autocratic rule instead of democratic rule.
Why the Worst Get on Top -- in Economics and as CEOs [More...]
"Hayek’s critique of democratic government has proven to be the most monstrous blood libel of the post-World War II era -- falsely declaring that democratic government must end in tyranny and the mass murder of its own people."
Yet Another Note on Mont Pelerin: Thinking Some More About Bob Solow’s View… [More...]
Brad DeLong sees a good Hayek, a bad Hayek, and a political economy Hayek. The three are inconsistent. He (citing Solow) compares their faults to those of Milton Friedman.


The term "libertarianism"is distasteful to people who think seriously about politics. Both Dr. F.A. Hayek and your servant have gone out of their way, from time to time, to declare that they refuse to be tagged with this label.
Russell Kirk, "A Dispassionate Assessment of Libertarians"
On Hayek… in my view, there are four Hayeks, one good, and three of varying degrees of badness:
  1. The good Hayek of the price system as a discovery and information transmission mechanism, of the importance of entrepreneurship, and of private property and the rechstaat as guarantees of individual liberty.
  2. The bad Hayek who prefers Augusto Pinochet to Helmut Schmidt.
  3. The worse Hayek who had his head completely up his posterior on economic policy during the Great Depression.
  4. The worst-of-all Hayek. The one who when Keynes praises the Road to Serfdom and pronounces himself in "not just agreement, but deeply moved agreement with it" responds "no you are not!"
    Brad DeLong, "Daniel Kuehn: Maynard, Fred, Gus and Ralph on the History of Macroeconomics".
Your tone is that of a theologian examining scripture, not a social scientist tackling existing institutions to improve them, or an open-minded analyst of partial improvements. You treat Hayek as if he didn’t understand the simple largely a priori principles of economic analysis that constitute your armory. Truth to tell, he was trying to analyze a far more complex reality than you are prepared to admit exists. There are indeed market failures, externalities, conflicts of “ultimate” values, ruled out by logic but not by imperfect human understanding. Every question does not have a simple logical answer.
Milton Friedman on Walter Block, "Fanatical, Not Reasonable: A Short Correspondence Between Walter E. Block and Milton Friedman (on Friedrich Hayek ’s Road to Serfdom)"
[Hayek] is not evaluating a mixed system, in which there is a degree of personal freedom but also a degree of imposed order. A mixed system is what we and our peer nations have, and I have not been able to figure out what help Hayek offers for evaluating such a system.
Richard Posner, "Hayek, the Mind, and Spontaneous Order: A Critique"
Hayek's greatest failure is his neglect of the problem of private power. All his efforts go into the denunciation of state power, but he has little to say about private coercion.
Andrew Gamble, "Hayek: The Iron Cage Of Liberty"
[T]he market, as Hayek says, processes information and on that basis, determines, for example, the best way to organize production. But applying this logic shows that hierarchical economic planning may not be such a bad thing at least when combined with markets. The boundary of the firm -- how big it will be -- is determined by the answer to the question, should this component be produced inhouse or purchased? But this is also the boundary between organizing things according to the market or according to the hierarchical structure of command that has led capitalist firms to be termed (ironically) as ‘mini-planned economies.” The ‘verdict of the market’ in this case is that both markets and hierarchies have a place in the economy!
Sam Bowles, "How Hayek’s Evolutionary Theory Disproves His Politics"
[T]he information revolution in economics that Hayek kicked off well over a half century ago, ended up pointing to a larger public role both in rectifying market failures and in addressing the problem of unaccountable power exercised by employers over employees.
Sam Bowles, "How Hayek’s Evolutionary Theory Disproves His Politics"
The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45 [Hayek provided historical background up to page 45; after that came his theoretical model]... It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam...
John Maynard Keynes, criticizing Hayek's "Prices and Production" in "The Pure Theory of Money: A Reply to Dr. Hayek".
On the natural interpretation, shared by everyone in mainstream economics from Samuelson to Stigler, this book [ The Road to Serfdom ], which argued that the policies advocated by the British Labour Party in 1944 would lead to a totalitarian dictatorship, was a piece of misprediction comparable to Glassman and Hassett's Dow 36000. So what is going on in the minds of the buyers? Are they crazy? Do they actually think that Hayek was proven right after all? Is there a defensible interpretation of Hayek that makes sense? The answers are "Yes", "Yes" and "No".
John Quiggin, Hayek's Zombie Idea
Both Misesians and Hayekians live in a fantasy world, with respect to the price system. Both are dependent on the notion of universally flexible prices created by the dynamics of supply and demand curves, tending towards their market-clearing values. Both have failed to grasp the widespread reality and significance of fixprice markets and price administration.
Lord Keynes (pseudonym), "Mises and Hayek Dehomogenized?: A Note on a Schism in Modern Austrian Economics"
There are other reasons to think that Hayek went too far in his opposition to progressive tax rates. First, he assumed that earned income accurately measures the value of the incremental contribution to social output. But Hayek overlooked that much of earned income reflects either rents that are unnecessary to call forth the efforts required to earn that income, in which case increasing the marginal tax rate on such earnings does not diminish effort and output. We also know as a result of a classic 1971 paper by Jack Hirshleifer that earned incomes often do not correspond to net social output. For example, incomes earned by stock and commodity traders reflect only in part incremental contributions to social output; they also reflect losses incurred by other traders... Insofar as earned incomes reflect not incremental contributions to social output but income transfers from other individuals, raising taxes on those incomes can actually increase aggregate output.
David Glasner, "Neo- and Other Liberalisms"
Professor Hayek... does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.
George Orwell, "Review by Orwell: The Road to Serfdom by F.A. Hayek / The Mirror of the Past by K. Zilliacus "
This is a point that Hayek and his libertarian followers fail to see: the Common Law may be a work of dispersed judges, but it would not have come into being in the first place, or been enforced, without a strong centralized state.
Francis Fukuyama, "The Origins of Political Order: From Prehuman Times to the French Revolution", p. 260.
The most effective way of making people accept the validity of the values they are to serve is to persuade them that they are really the same as those which they ... have always held, but which were not properly understood or recognized before. The people are made to transfer their allegiance from the old gods to the new under the pretense that the new gods really are what their sound instinct had always told them but what before they had only dimly seen. And the most effective way to this end is to use the old words but change their meaning.... Few traits of totalitarian regimes are at the same time so confusing to the superficial observer and yet so characteristic of the whole intellectual climate as the complete perversion of language, the change of meaning of the words by which the ideals of the new regimes are expressed.... If one has not one's self experienced this process, it is difficult to appreciate the magnitude of this change of the meaning of words, the confusion it causes, and the barriers to any rational discussion which it creates... And the confusion becomes worse because this change of meaning of words describing political ideals is not a single event but a continuous process, a technique employed consciously or unconsciously to direct the people. Gradually, as this process continues, the whole language becomes despoiled, and words become empty shells deprived of any definite meaning, as capable of denoting one thing as its opposite and used solely for the emotional associations which still adhere to them.
The Road to Serfdom, p. 157-159.
Where, as in the case of sickness and accident, neither the desire to avoid such calamities nor the efforts to overcome their consequences are as a rule weakened by the provision of assistance — where, in short, we deal with genuinely insurable risks — the case for the state’s helping to organise a comprehensive system of social insurance is very strong…. Wherever communal action can mitigate disasters against which the individual can neither attempt to guard himself nor make provision for the consequences, such communal action should undoubtedly be taken.
Friedrich von Hayek, "The Road to Serfdom" p. 134.
Hayek supported social insurance, even in The Road to Serfdom [...] He made clear that compulsory contributions to a system of social insurance were compatible with a free society. Hayek rejected laissez-faire capitalism and insisted that a free society was also compatible with various forms of economic regulation [...]
Elizabeth Anderson, "Thomas Paine’s “Agrarian Justice” and the Origins of Social Insurance"
It is scarcely an exaggeration to say that the modern gurus of libertarian economics – Friedman, Mises, Hayek, and their followers – were and are all basically intellectual McCarthyites, motivated by a visceral hatred of communism and, by association, of all forms of socialism. Their virulent loathing has driven them to embrace with uncritical enthusiasm the opposite doctrine. But it was the vices of nineteenth-century laisser-faire that inspired communism and socialism in the first place!
Angus Sibley, "What’s wrong with Milton Friedman’s economics?"
Hayek’s critique of democratic government has proven to be the most monstrous blood libel of the post-World War II era -- falsely declaring that democratic government must end in tyranny and the mass murder of its own people.
Bill Black, "Why the Worst Get on Top -- in Economics and as CEOs"
Economists claim that their work should be evaluated based on predictive success. Von Hayek was made a Nobel Laureate in 1974, three decades after his prediction that democratic states were headed to tyranny and mass murder of their own citizens. In those three decades of experience in the nations he focused on (Western Europe, the U.S., Canada, Australia, and New Zealand) – and the forty years since his award – this happened in zero nations. He is batting zero for 70 years in roughly 30 nations with, collectively, thousands of elections. What he claimed was inevitable has never occurred.
Bill Black, "Why the Worst Get on Top -- in Economics and as CEOs"