Hayek's Leading Ideas
Hayek represented the subjective approach of the free-market oriented Austrian School of Economics, distinguished by its methodological individualism. His economic analysis, therefore, rested upon the insight that every individual chooses and acts in pursuit of his purposes and in accordance with his perception of his options for achieving them. His early writings, as shown above, were in pure economic theory.
Hayek's trade cycle theory explained that overinvestment leads to scarcity of capital compelling a cutback in investment and even the abandonment of a part of the real capital produced because of the excessive investment rate.
His most important discovery was the "division of knowledge" and the spontaneous order. The spontaneous interaction of millions of individuals, each possessing unique information of which beneficial use might be made, created circumstances that cannot be conveyed to any central authority. A system of signals - the price system - was therefore the only mechanism that communicates information and enables people to adapt to circumstances of which they know nothing. The whole modern order and well-being rested on the possibility of adapting to processes that were unknown. It was not scientific knowledge which matters, but the unorganized particular knowledge of time and place.
While for most social philosophers the chief aim of politics consisted in setting up an ideal social order through utopian reforms, Hayek's main task was the finding of rules that enable men with different values and convictions to live together. These rules were established so as to permit each individual to fulfill his aims and to limit government action.
In his "Denationalization of Money" (1976) he convincingly argued that inflation could be avoided only if the monopolistic power of issuing money was taken away from government and state authorities and the task given to private industry to promote competition in currencies.
According to Hayek, cultural evolution was not a result of human reason consciously building institutions, but a process in which culture and reason developed concurrently. The spontaneous social order generated by individuals interacting according to these general rules was distinguished from the constructivist approach exemplified by socialist ideas, which interpreted all order as the product of conscious design.
Hayek's seminal work arose and developed from a comprehensive approach to various intellectual disciplines that condition and influence one another. Although there were only a few direct disciples in academia, Hayek's influence on pure economics, public policy, and social, political, and legal philosophy were tremendous.
Classical Liberalism
During the 1980s, Hayek's interdisciplinary theories gained wider dissemination, especially his opposition to the concept that publc institutions could be designed to meet human requirements and intentions. He preferred an almost laissez-faire approach in which public order evolved from specific ideas and actions. Thus, he was opposed to the highly-centralized economics of the various forms of socialism, which denied the economics of the marketplace.
British Prime Minister Margaret Thatcher, was greatly influenced by Hayek's ideas of personal liberty and market economics and based many of her government's conservative policies upon her interpretation of his concepts.
In 1991, Hayek published his final volume, Economic Freedom, in which he argued that political/economic coercion is the greatest threat to individual freedom and best achieved through the natural evolution of market forces.
Since Hayek's death in March 1992, there has been continuing debate concerning his interdisciplinary system. It was thought that he diminished the role of reason, and failed to reconcile the value of such liberal institutions as have evolved with their role as preservers and nurturers of reason and freedom. Library > People > Biographies
Hayek represented the subjective approach of the free-market oriented Austrian School of Economics, distinguished by its methodological individualism. His economic analysis, therefore, rested upon the insight that every individual chooses and acts in pursuit of his purposes and in accordance with his perception of his options for achieving them. His early writings, as shown above, were in pure economic theory.
Hayek's trade cycle theory explained that overinvestment leads to scarcity of capital compelling a cutback in investment and even the abandonment of a part of the real capital produced because of the excessive investment rate.
His most important discovery was the "division of knowledge" and the spontaneous order. The spontaneous interaction of millions of individuals, each possessing unique information of which beneficial use might be made, created circumstances that cannot be conveyed to any central authority. A system of signals - the price system - was therefore the only mechanism that communicates information and enables people to adapt to circumstances of which they know nothing. The whole modern order and well-being rested on the possibility of adapting to processes that were unknown. It was not scientific knowledge which matters, but the unorganized particular knowledge of time and place.
While for most social philosophers the chief aim of politics consisted in setting up an ideal social order through utopian reforms, Hayek's main task was the finding of rules that enable men with different values and convictions to live together. These rules were established so as to permit each individual to fulfill his aims and to limit government action.
In his "Denationalization of Money" (1976) he convincingly argued that inflation could be avoided only if the monopolistic power of issuing money was taken away from government and state authorities and the task given to private industry to promote competition in currencies.
According to Hayek, cultural evolution was not a result of human reason consciously building institutions, but a process in which culture and reason developed concurrently. The spontaneous social order generated by individuals interacting according to these general rules was distinguished from the constructivist approach exemplified by socialist ideas, which interpreted all order as the product of conscious design.
Hayek's seminal work arose and developed from a comprehensive approach to various intellectual disciplines that condition and influence one another. Although there were only a few direct disciples in academia, Hayek's influence on pure economics, public policy, and social, political, and legal philosophy were tremendous.
Classical Liberalism
During the 1980s, Hayek's interdisciplinary theories gained wider dissemination, especially his opposition to the concept that publc institutions could be designed to meet human requirements and intentions. He preferred an almost laissez-faire approach in which public order evolved from specific ideas and actions. Thus, he was opposed to the highly-centralized economics of the various forms of socialism, which denied the economics of the marketplace.
British Prime Minister Margaret Thatcher, was greatly influenced by Hayek's ideas of personal liberty and market economics and based many of her government's conservative policies upon her interpretation of his concepts.
In 1991, Hayek published his final volume, Economic Freedom, in which he argued that political/economic coercion is the greatest threat to individual freedom and best achieved through the natural evolution of market forces.
Since Hayek's death in March 1992, there has been continuing debate concerning his interdisciplinary system. It was thought that he diminished the role of reason, and failed to reconcile the value of such liberal institutions as have evolved with their role as preservers and nurturers of reason and freedom. Library > People > Biographies
No comments:
Post a Comment