F A Hayek, born on May 8th, 1899, was one of the major intellectual influences of the 20th Century. He was a leading proponent of the Austrian School of Economics, of its empirical, rather than its deductive, wing. For his academic work he was awarded the 1974 Nobel Prize in Economics, jointly with Gunnar Myrdal.
Hayek led the resurgence of classical liberalism after World War II, founding the Mont Pelerin Society in 1947 in company that included figures such as Milton Friedman and Karl Popper, in order to combat intellectually the collectivist and socialist mentality that was then so dominant. Several of Hayek’s works became best sellers outside of academe, including “The Road to Serfdom” in 1944 and “The Constitution of Liberty” in 1960.
He emphasized the limits to what people could know, claiming that societies which generate naturally contain more knowledge and wisdom than any that are dreamed up by intellectuals. He regarded the price system as part of a spontaneous order, rather like that of a language, and something created by human beings, but not designed by them. This was the notion of a “spontaneous order,” superior to a centrally planned order because it contained the inputs of millions, and had knowledge dispersed throughout it. It reacted faster than any system that needed to collect information in order to react to changing events. The spontaneous system did this naturally.
Hayek, as much as anyone, deserves credit for the spread of neoliberal and free trade ideas, and for the rise of opposition to central planning and controls. When Antony Fisher asked Hayek how he might help the cause, Hayek suggested he eschew politics and disseminate ideas instead. In response Fisher founded the Institute of Economic Affairs. Hayek was also a good friend to the Adam Smith Institute, serving as Chairman of its Academic Advisory Board. On his twice-yearly visits to meetings of the British Academy, of which he was a Fellow, he would visit the ASI and spend an afternoon in our company discussing ideas.
He received many honours in his lifetime. He was appointed a Companion of Honour in 1984 for "services to the study of economics,” and was awarded the Presidential Medal of Freedom in 1991 from President George H. Bush. His more lasting legacy is on thought, and it continues still, and will do so long into the future. He died in 1992, at the age of 92, having lived just long enough to see the Berlin Wall come down and the totalitarian socialist regimes of the Iron Curtain replaced by liberal and relatively free market societies instead.