Wednesday, March 23, 2011

Thursday Thinker: F.A. Hayek

Each Thursday the AUSFL Blog will post a new short summary of an important figure in liberty, focusing on ones applicable to students at AU. First, F. A. Hayek. Thanks to AU junior Nick Zaiac, who is currently studying abroad in the London School of Economics and working as a Students for Liberty Campus Coordinator in the UK!

Who ?

Friedrich August von Hayek was an economist from Vienna and one of the forefathers of the Austrian School of economics. As a student, he studied under Austrian School forefathers Carl Menger and Friedrich von Wieser, and was later worked with Ludwig von Mises. He worked at the London School of Economics from 1931 to 1950, before working at the University of Chicago for the next 12 years. He won the Nobel Prize in 1974, and wrote a best-selling book, The Road to Serfdom. He did other important work on how prices reflect societal knowledge and also explained the idea of “spontaneous order”. He also wrote on business cycles and how the boom and bust arise. On top of all of this, his work was written in a lighter tone, meaning it was much easier for a general audience to understand than most economics books.

So why should you care?

Hayek’s ideas matter today. The current bust of the economy can in part be explained by his theories of the business cycle. His ideas about knowledge are an important way to understand the impact of regulations on the economy. The concept of spontaneous order can be used to explain how institutions emerge without the help of government.

If you read only one thing…

The Road to Serfdom is an excellent book and aimed at a more popular audience than most books on economics. It’s definitely worthwhile.

Extra Credit

To understand some of the differences between Hayekian and Keynesian theory check out this music video by Russ Roberts and John Papola. 

Next week: William Easterly

1 comment:

  1. Love that video! Should be part of everyone's introduction to Austrian business cycle. I was really impressed with how much actual economic information they got into a rap.