Friedrich August von Hayek (1899-1992) was a Viennese economist, jurist and philosopher of the Austrian School. Especially known for receiving the Nobel Prize in 1974, Hayek was a strong advocate of liberalism and critic of the planned economy andsocialism .
Biographical Notes
Friedrich August von Hayek was born in Vienna in 1899. After fighting in World War I he earned a doctorate in law and economics . He was a student of Ludwig von Mises, whose book Socialism made him abandon left positions to embrace liberalism. Later he got a chair at the London School of Economics thanks to Lionel Robbins, another Mises student. In London he embarked on a constant debate with JM Keynes that catapulted him to fame.
He later worked at the University of Chicago, at the University of Freiburg and at the University of Salzburg, where he retired in 1977. In 1974 he would receive the Nobel Prize in Economics “for his pioneering work in the theory of money and economic fluctuations and his pioneering analyzes of the interdependence of economic, social and institutional phenomena. ”
After his retirement he dedicated himself to travel spreading his ideas. He would die in 1992 in Freiburg and would be buried in Vienna.
Main contributions
Von Hayek’s main contribution was his theory of the economic cycle . The Viennese blames the cycles on the actions of the government, specifically the central banks. Through their expansive monetary policies , central banks cause, in addition to inflation , the increase in bad investments, especially in capital goods , and the underproduction of consumer goods . These policies will generate the need for adjustment, which occurs in the form of depressions. His theory was especially appreciated after predicting the Great Depression , but was abandoned with the emergence of Keynes General Theory .
The other recurring theme in his work is the critique of socialism and the planned economy. In this sense he developed the theorem of the impossibility of socialism, previously raised by Mises. He emphasizes his contribution as far as the paper that fulfills the information, and the prices like transmitters of this one, in the free market, developed in his article The Use of the Knowledge in the Society . Broadly speaking, Friedrich Hayek criticizes that in the absence of prices socialist planners would not have access to the information they provide about preferencesand individual knowledge, since it is subjective, dispersed and difficult to articulate information. He also criticized socialism on the philosophical level for its incompatibility with individual freedom.
