The eighth of May marks the birthday of Friedrich August Hayek (1899 - 1992), the great economist and champion of freedom, innovation, and the removal of the obstacles to economic growth.
He is perhaps most famous as the author of the Road to Serfdom, published in 1944 and written while World War II raged. While it deals directly with the issues that led to that war, the same issues are vitally important today.
In fact, it could well be argued that the debates between the vision of Hayek and the vision of Keynes during the 1930s ended after the war with the triumph of the vision of Keynes. The implementation of Keynesian policies across most of Europe led directly to the slow-motion train wreck that has been taking place in the European Union for the past few years and which will no doubt continue for years to come.
In 1960, Hayek published The Constitution of Liberty, which some scholars believe to be his most important work (portions of which are available to read online via the link above). In it, although he wrote against the evils of socialism his entire life, he draws a contrast between his position and that of the "conservatism" that is usually seen as the opposite of socialism. He argues that simply being "conservative" in the sense of opposing change is a negative term -- he sought a position that was positive in terms of moving towards greater freedom, rather than simply resisting change for the principle of "conserving."
He called this active advocacy of economic liberty by the old term "liberalism," while acknowledging that this term has some problems in that it has been used to describe many who do not stand for economic freedom and that it can for this reason cause some confusion.
On page 521 of that work, he says:
Since the development during the last decades has been generally in a socialist direction, it may seem that both conservatives and liberals [and here he means the older understanding of "liberals"] have been mainly intent on retarding that movement. But the main point about liberalism is that it wants to go elsewhere, not to stand still. Though today the contrary impression may sometimes be caused by the fact that there was a time when liberalism was more widely accepted and some of its objectives closer to being achieved, it has never been a backward-looking doctrine. There has never been a time when liberal ideas were fully realized and liberalism did not look forward to further improvement of institutions. Liberalism is not averse to evolution and change; and where spontaneous change has been smothered by government control, it wants a great deal of change of policy. So far as much of current governmental action is concerned, there is in the present world very little reason for the liberal to wish to preserve things as they are. It would seem to the liberal, indeed, that what is most urgently needed in most parts of the world is a thorough sweeping-away of the obstacles to growth.
We would argue that these words, written in 1960, apply with equal force around the world today, and not just in Europe (where the lessons of rejecting the wisdom of Hayek are perhaps most on display at the current time).
It is certainly appropriate, on this 113th anniversary of his birth, to reflect upon his genius and consider its continuing importance.
