Friedrich Hayek (1899 – 1992)
Nobel laureate in economics, social scientist and political theorist.
A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise. If Mrs. Thatcher said that free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom, while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot.
F. A. Hayek, probably the most prominent advocate of capitalism in the present period would not quite agree with Smith's notions of what is natural, but his defense of capitalism is indirect by reference to its linkage with liberty, and he explicitly rejected the idea that a legitimating concept of justice is relevant to the operations of a market system.
Liberalism is a doctrine about what the law ought to be, democracy a doctrine about the manner of determining the law. Liberalism regards it as desirable that only what the majority accepts should in fact be law, but it does not believe that this is therefore necessarily good law. Its aim, indeed, is to persuade the majority to observe certain principles. It accepts majority rule as a method of deciding, but not as an authority for what the decision ought to be. To the doctrinaire democrat the fact that the majority wants something is sufficient ground for regarding it as good; for him the will of the majority determines not only what is law but what is good law.
The chief point we must remember is that the great and rapid advance of the physical sciences took place in fields where it proved that explanation and prediction could be based on laws which accounted for the observed phenomena as functions of comparatively few variables either particular facts or relative frequencies of events.
Hayek has as fine and as powerful a mind as is to be found anywhere, and [his] "Constitution of Liberty" is one of the most thoughtful works of the last decades.
Order appears to the conservative as the result of the continuous attention of authority, which, for this purpose, must be allowed to do what is required by the particular circumstances and not be tied to rigid rule. A commitment to principles presupposes an understanding of the general forces by which the efforts of society are co-ordinated, but it is such a theory of society and especially of the economic mechanism that conservatism conspicuously lacks. So unproductive has conservatism been in producing a general conception of how a social order is maintained that its modern votaries, in trying to construct a theoretical foundation, invariably find themselves appealing almost exclusively to authors who regarded themselves as liberal.
Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics"
I admit I wasn't familiar with Hayek and von Mises as the time. But now that I've read them, I can see that this is essentially true.
This is not a dispute about whether planning is to be done or not. It is a dispute as to whether planning is to be done centrally, by one authority for the whole economic system, or is to be divided among many individuals.
It would scarcely be an exaggeration to say that the greatest danger to liberty today comes from the men who are most needed and most powerful in modern government, namely, the efficient expert administrators exclusively concerned with what they regards as the public good.
If the human intellect is allowed to impose a preconceived pattern on society, if our powers of reasoning are allowed to lay claim to a monopoly of creative effort
then we must not be surprised if society, as such, ceases to function as a creative force.
The peculiar character of the problem of a rational economic order is determined precisely by the fact that the knowledge of the 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 individuals possess. The economic problem of society is thus not merely a problem of how to allocate "given" resources if "given" is taken to mean given to a single mind which deliberately solves the problem set by these "data." It is rather a problem of how to secure the best use of resources known to any of the members of society, for ends whose relative importance only these individuals know. Or, to put it briefly, it is a problem of the utilization of knowledge which is not given to anyone in its totality.
We certainly do not regard it as right that the citizens of a large country should dominate those of a small adjoining country merely because they are more numerous.
Liberty not only means that the individual has both the opportunity and the burden of choice; it also means that he must bear the consequences of his actions
Liberty and responsibility are inseparable.
Nobody with open eyes can any longer doubt that the danger to personal freedom comes chiefly from the left.
Half the time I read [Hayek's The Sensory Order] with amazement at the extent of his reading and comprehension
he is right
most of the time.
I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it.
Over the years, I have again and again asked fellow believers in a free society how they managed to escape the contagion of their collectivist intellectual environment. No name has been mentioned more often as the source of enlightenment and understanding than Friedrich Hayek's
I, like the others, owe him a great debt
his powerful mind
his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society.
The [seminar in economic theory conducted by Hayek at the L.S.E. in the 1930s] was attended, it came to seem, by all of the economists of my generation Nicky [Kaldor], Thomas Balogh, L. K. Jah, Paul Rosenstein-Rodan, the list could be indefinitely extended. The urge to participate (and correct Hayek) was ruthlessly competitive.
Our faith in freedom does not rest on the foreseeable results in particular circumstances, but on the belief that it will, on balance, release more forces for the good than for the bad
Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom.
The conflict between what in its present mood the public expects science to achieve in satisfaction of popular hopes and what is really in its power is a serious matter because, even if the true scientists should all recognize the limitations of what they can do in the field of human affairs, so long as the public expects more there will always be some who will pretend, and perhaps honestly believe, that they can do more to meet popular demands than is really in their power. It is often difficult enough for the expert, and certainly in many instances impossible for the layman, to distinguish between legitimate and illegitimate claims advanced in the name of science.