Friedrich A. Hayek: Difference between revisions

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====Rationally Designed vs Spontaneous Orders====
[[Image:Hayek.jpg|thumb|Description]]


====The Market as a Spontaneous Order====


====Hayek on the Use of Knowledge in Society====
====Biography====


Friedrich A. Hayek has proven to be one of the most exceptional classical liberal political economists.  His research incorporates the fusion between Politics, Philosophy, and Economics.  As a philosopher he sought answers relating to the nature of the mind.  While as an economist he sought to integrate technical economics and philosophy in order to explore the political behavior of free people.   


====
# '''BACKGROUND'''
#* Born on May 8, 1899 in Vienna
#* Earned doctorates from University of Vienna
#* Shares a Nobel Prize with Gunnar Myrdal
# '''CONTRIBUTIONS'''
#* '''Monetary Theory and the Trade Cycle:''' Reevaluated the capital structure of an economy and how it can be affected by credit policy and expansion.
#* '''Hayek-Keynes Debate:''' Monetary economics debate where Hayek expressed that understanding interest rates and capital structure play a key role in the market economy.  He argues that Keynes focuses on how the economist examines the industrial structure rather than how free individuals would examine the structure.
#* '''Collectivist Economic Planning:''' Series of essays focused on the issues of socialism.
#* '''The Road to Serfdom:'''  Redefining Liberal Society and the problems of socialism through observations of Nazi Germany.
#* '''The Counter-Revolution of Science:''' Collection of essays that explores philosophical trends, which prejudices individuals from efficiently analyzing systematic economy issues.
#*      '''The Constitution of Liberty:''' Work in Classical liberal political philosophy that went against constructivist rationalism. 


====


----


 
[[Hayek & The Socialist Calculation Debate]] || [[Friedrich A. Hayek]] || [[Ludwig Von Mises]] || [[What is Socialist Calculation Debate?]] || [[Critiques of the Socialist Calculation Debate]] || [[Knowledge Problem]] || [[The impact of Hayek's 1945 paper]] || [[Authors' View]] || [[Questions to Ask]] || [[Sources Cited]]
 
Hayek considers that human values can be
 
- genetically determined (innate)
 
- products of rational thought
 
- the result of cultural evolution
 
 
 
 
 
Hayek considers that the market economy is a clear example of spontaneous order. The market is not simply a guide or a communication tool, but a complex mechanism which allows participants to spontaneously adopt their actions to circumstances and events they previously had no knowledge of. The market is not a social institution but a “value-free result of the Logic of Choice” (Hayek Revisited), which not only makes use of the existing knowledge market participants have but continuously generates new knowledge. Thus, although market players might employ rationalism to plan their actions, they cannot coordinate their actions solely on previously planned strategies; rather, they have to adapt to the actions of the other players in order to gain the highest payoffs. The market operates as a mode of coordination and information is being transmitted through a series of general mechanisms (i.e. the price mechanism).
 
 
Hayek agues that the role of the government and other legal institution has to be limited solely to implementing legislation that allows the market to work efficiently (i.e. laws of property, contract and tort). Any other intervention might result in '''[[unfavourable outcomes]]'''. Hayek  thus strongly advocates the fact that rules constructed through the process of spontaneous order are significantly more effective than those constructed through a rational process:
''“It is unlikely that any individual would succeed in rationally constructing rules which would be more effective for their purpose than those which have been gradually evolved”'' (The Constitution of Liberty, 66).
 
He strongly disapproves with the idea of central economic planning adopted by communist countries, which he calls a "fatal  conceit" '''[[cite 3]]'''. As
 
 
Hayek argues that spontaneous rules are a result of human action but not human design and evolve through a process of cultural evolution, whose outgrowths lie between instinct and reason (Bouckaret 34).
 
''“I want to call attention to what does indeed lie between instinct and reason, and which on that account is often overlooked just because it is assumed that there is nothing between the two. That is, I am chiefly concerned with cultural and moral evolution, evolution of the extended order, which is on the one hand…beyond instinct and often opposed to it, and which is, on the other hand…, incapable of being created or designed by reason.......Just as instinct is older then custom and tradition, so then are the latter older than reason: custon and tradition stand between instinct and reason – logically, psychologically, temporally"'' (The Fatal Conceit: The Errors of Socialism, 23).

Latest revision as of 16:42, 5 December 2007

Description


Biography

Friedrich A. Hayek has proven to be one of the most exceptional classical liberal political economists. His research incorporates the fusion between Politics, Philosophy, and Economics. As a philosopher he sought answers relating to the nature of the mind. While as an economist he sought to integrate technical economics and philosophy in order to explore the political behavior of free people.

  1. BACKGROUND
    • Born on May 8, 1899 in Vienna
    • Earned doctorates from University of Vienna
    • Shares a Nobel Prize with Gunnar Myrdal
  2. CONTRIBUTIONS
    • Monetary Theory and the Trade Cycle: Reevaluated the capital structure of an economy and how it can be affected by credit policy and expansion.
    • Hayek-Keynes Debate: Monetary economics debate where Hayek expressed that understanding interest rates and capital structure play a key role in the market economy. He argues that Keynes focuses on how the economist examines the industrial structure rather than how free individuals would examine the structure.
    • Collectivist Economic Planning: Series of essays focused on the issues of socialism.
    • The Road to Serfdom: Redefining Liberal Society and the problems of socialism through observations of Nazi Germany.
    • The Counter-Revolution of Science: Collection of essays that explores philosophical trends, which prejudices individuals from efficiently analyzing systematic economy issues.
    • The Constitution of Liberty: Work in Classical liberal political philosophy that went against constructivist rationalism.


Hayek & The Socialist Calculation Debate || Friedrich A. Hayek || Ludwig Von Mises || What is Socialist Calculation Debate? || Critiques of the Socialist Calculation Debate || Knowledge Problem || The impact of Hayek's 1945 paper || Authors' View || Questions to Ask || Sources Cited

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