Friedrich Hayek was a renowned Austrian economist born in Vienna in 1899. He earned significant fame for an impressive variety of contributions in such diverse fields as economics, psychology, and political philosophy. His economic ideas came from the Austrian School in economics. They focused on the fact that knowledge is limited in nature. Hayek became especially famous for defending free market capitalism. He is today still remembered as among the most effective critics of the socialist idea that was mostly consensus during his life time.
A man of many specialties, Friedrich Hayek has been called an ultimate Renaissance man for the twentieth century. His substantial and discipline changing contributions impacted economics, psychology, and political sciences. These fields often find an idea is surpassed by expansions on the creators’ original theories. Yet with von Hayek, a number of his important contributions were so eye opening that many scholars still read them to this day over fifty years after he envisioned and wrote them down.
A significant number of graduate students in economics today read and study his articles which he wrote in the decades of the 30’s and 40’s. Even now many of the insights they still draw from his writings are ground breaking in their disciplines. Author Daniel Yergin has claimed that Hayek was the foremost economist of the second half of the 1900s in his book entitled Commanding Heights.
Friedrich Hayek turned out to be the most famous articulator and defender of the Austrian Economics school of thought. This is most ironic as he stands out as the only important recent member of this school that could call Austria his birthplace where he was raised. Following World War I, von Hayek earned twin doctorate degrees in political science and law from the University of Vienna. He then joined up with Ludwig von Mise in his private seminar with other young up and coming economists.
By 1927, von Hayek had taken on the director position at the newly established Austrian Institute for Business Cycle Research. He received an invitation from Lionel Robbins in the early 1930s and accepted a faculty position at the famed London School of Economics where he remained for 18 years, eventually earning British citizenship in 1938.
In this important time, Friedrich Hayek worked on Austrian theories of monetarism, capital, and business cycles. He believed in an important connection and relationship between the three topics. Von Hayek believed that the market happened spontaneously as an unplanned entity. Though no one designed it, it grew slowly but steadily because of human interaction. Despite this, the market did not function perfectly anywhere.
In 1974, Friedrich Hayek received the greatest honor of his life by co-wining the Nobel Prize in Economics. He and partner Gunnar Myrdal won this famous prize because of their “pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of interdependence of economic, social, and institutional phenomena.”
Friedrich Hayek died on March 23 in 1992. Following his death, several of the universities at which he had taught over the years honored him with tributes, by naming halls and auditoriums after him. In a field where economic theories come and go all the time, his are still revered as especially insightful and diligently learned half a century after he created them.