Important Economists of the Austrian School
Friedrich August von Hayek
Friedrich August von Hayek is in all likelihood the most prominent representative of the Austrian School of Economics, which can be at least partially explained by him having won the Nobel Prize in Economics in 1974. This prize was awarded to him for his early work “Prices and Production”, in which he demonstrated the harmful influences of governmental monetary policy on the stable development of an economy.
He gained much attention though with his 1944 classic “The Road to Serfdom”, in which he examined the tendency of state planning to reinforce itself and slowly but surely transform interventionist economies into totalitarian and dictatorial systems. The book remained on the bestseller lists for months and is justifiably a well-read classic even today, having experienced another major rise in sales following the Great Recession.
Hayek turned his attention in later works increasingly to political philosophy. In “The Constitution of Liberty” he meticulously demonstrated how a nation-state should function on the basis of individual liberty, while still leaving a limited role for state action. However, it is crucially important that a strong and durable constitution limits the potential scope of governmental activity in a durable and predictable fashion. In “Law, Legislation and Liberty” Hayek develops a theory of cultural evolution and shows how certain elements of biological evolution influence the way we behave in economic contexts even today. In that sense he is a noteworthy founding thinker in the field of evolutionary economics. Hayek’s influence stretches worldwide: after his studies and work in Vienna, he taught in London, Chicago, Freiburg and Salzburg. Furthermore, he founded the prestigious Mont Pèlerin Society in 1947, which is one of the most important organizations for the dissemination of liberal ideas still today.