Some Thoughts on Hayek

I was not always fond of Hayek. I remember in my Rothbardian stage, I hated Hayek. I fell for the typical Rothbardian view that Hayek was the less Austrian of the main Austrians, or he was a statist in disguise, etc etc. I remember reading Hoppe’s article, ‘Why Mises (and not Hayek)’, and agreeing with Hoppe that Hayek was a type of social democrat. Of course I highly disagree with that view now, but this is not to say that I agree with Hayek on everything. I will probably do a separate post critiquing that Rothbardian position but that will be a while from now, since I do want to finish The Constitution of Liberty and do a chapter by chapter summary.

It was not until I read Lachmann that I did find an appreciation for Hayek. I think it is safe to say that Hayekian ideas were the starting blocks to radical subjectivism (and maybe there is even a case to consider radical subjectivsts as radical Hayekians). Lachmann clearly appreciated Hayekian treatment of capital, and found Hayek to be a key inspiration in the  field of capital. In The Maintenance of Capital, Hayek concluded that capital could not be measurable due to expectations. This claim on capital was stated far before the Cambridge debates on capital, which concluded that capital was not measurable, but for different reasons than that of the subjectivist perspective. George Shackle, in the acknowledgements of  Epistemics and Economics, credits Hayek for being an early inspiration, especially on the topic of knowledge, which Shackle cites Hayek’s awesome paper Economics and Knowledge.

The wonderful thing about those two papers (The Maintenance of Capital and Economics and Knowledge) is that modern economic theory can very well still benefit from them, but mainly because modern economic theory has not really grasped the importance of knowledge, expectations, and capital in economics. Hayek still has a role in modern economic theory and I hope it is known soon. Happy Birthday Prof. Hayek


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