![[Translate to EN:] Friedrich August von Hayek](/fileadmin/content/hayek-stiftung-friedrich-august-von-hayek.jpg "Friedrich August von Hayek")
Friedrich August von Hayek, born on May 8, 1899 in Vienna, studied law and political science in his home town. He taught at the London School of Economics from 1931. In 1950, Hayek moved to the University of Chicago. It was here that he wrote his epoch-making work “The Constitution of Liberty” (1960) on the foundations of a liberal social order.
From 1962, Hayek taught at the University of Freiburg im Breisgau. It was during this time that he developed his concept of competition as a discovery process. After his retirement, he completed the trilogy “Law, Legislation and Liberty” (1973, 1976, 1979), which is regarded as his most important work. In 1974 he was awarded the Nobel Prize for Economics. Hayek died in Freiburg on March 23, 1992.
Friedrich August von Hayek set essential new accents in the modern economic theory of Ordnungspolitik, as worked out by the Freiburg School.
In particular, he expanded that approach into a comprehensive theory of the functional conditions of the market order and of the prerequisites of a free social order in general.
Like no other academic of the 20th century, he promoted and influenced research in the following areas:
Freedom
Preservation and protection of the freedom of the individual have to be the unconditional objective of all government policy and, therefore, must also define the restraints on such policy.
Market Economy
Only the market economy is a free economic order, for only in the market economy can human beings set their own goals and pursue these through actions of their own choice. Furthermore, the market economy, better than any other known economic order, creates general prosperity and promotes an efficient allocation of resources.
Competition
The main problem in the coordination of individual economic actions is that knowledge about relevant economic matters is very limited and dispersed among many individuals. An economic order will, therefore, be the more successful, the better it makes such individual knowledge accessible to others and the more it helps to discover new knowledge. In the market economy competition causes individuals to use their individual skills and their specific knowledge in an especially intensive manner, and induces them to acquire and to utilize new knowledge as quickly as possible: Competition is a discovery procedure.
Social Progress
Social progress relies essentially on dynamic ventures of individuals to modify existing conditions and on the capacity of citizens to react flexibly and quickly to changed circumstances. In this respect, the most important incentives are competition and the prospect of individual profit. A society that eliminates competition or that socializes profits destroys its own dynamic evolution. In the long run this leads to a paralysis of all progress and to social decline.
Democracy
Modern democracies are exploited by lobbies that pursue special interests at the expense of society as a whole. Politicians are frequently defenceless, because they are dependent on these special interest groups in order to gain a majority for their own political goals. The result is an impenetrable tangleof privilege and discrimination. This erosion of the democratic principle can only be stopped by a fundamental reform of democracy: Government must be deprived of those instruments of power whereby it can serve special interests.
Some of Friedrich August von Hayek's most important works on economic theory, political philosophy and jurisprudence are
“The Road to Serfdom” (1944): In this book, Hayek argues that centralized economic planning and state interventionism can ultimately lead to the suppression of individual freedoms and tyranny. He warns of the dangers of socialism and argues in favor of a free market economy.
“The Constitution of Liberty” (1960): This work is a comprehensive examination of the principles of freedom and the liberal constitutional state. Hayek discusses the importance of individual freedom, the role of law and the limits of state power.
“Law, Legislation and Liberty” (1973-1979): This three-volume work deals with the foundations of law and society. Hayek distinguishes between “rules of just conduct” and “legislation” and examines the effects on freedom and prosperity.
“Prices and Production” (1931): This is one of his early works in which Hayek sets out his views on business cycle theory and analyzes the role of prices and production structures in the economy.
“The Sensory Order” (1952): In this lesser-known work, Hayek deals with the theory of mind and cognition. He examines how the brain processes and organizes information.
To act on the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess, is likely to do much harm.
Friedrich August von Hayek, from his speech “The Pretence of Knowledge”
on the occasion of the award of the Nobel Prize in Economic Sciences, 1974