Written to be Presented at a Banquet in Hayek’s Honor, Chicago, May 24, 1962. Reprinted from Mises.org
I am sorry that a combination of causes — geography, my busy schedule and no less my age — make it impossible for me to attend this gathering. If I were able to be present, I would have said a few words on Professor Hayek and his achievements. As conditions are, I have to put these remarks in writing and am grateful to our friends who will present them for me.
To appreciate duly Doctor Hayek’s achievements, one must take into account political, economic and ideological conditions as they prevailed in Europe, and especially in Vienna, at the time the first World War came to an end.
For centuries, the peoples of Europe had longed for liberty and tried to get rid of tyrannical rulers and to establish representative government. All reasonable men asked for the substitution of the rule of law for the arbitrary rule of hereditary princes and oligarchies. This general acceptance of the freedom principle was so firmly rooted that even the Marxian parties were forced to make to it verbal concessions. They called their parties social-democratic parties. This reference to democracy was, of course, mere eyewash, as the Marxian pundits were fully aware of the fact that socialism does not mean freedom of the individual but his complete subjection to the orders of the planning authority. But the millions who voted the socialist ticket were convinced that the “withering away” of the state meant unrestricted freedom for everybody and did not know how to interpret the mystic term “dictatorship of the proletariat.”
But now there was again a dictator at work, a man who — in the wake of Cromwell and of Napoleon — dispelled the parliament freely elected by adult suffrage and mercilessly liquidated all those who dared to oppose him. This new dictator claimed supreme unlimited power not only in his own country but in all countries. And thousands and thousands of the self-styled intellectuals of all nations were enthusiastically supporting his claim.
Only people who had lived in Central Europe in those critical years between the fall of the Russian Tsardom and the final catastrophe of the Central-European currencies know how difficult it was at that time for a young man not to surrender to communism or to one of the other dictatorial parties that soon sprang up as poor imitations of the Russian model. Friedrich von Hayek was one of this small group of dissidents who refused to join in what Julien Benda pertinently called the Treason of the Intellectuals. At the School of Law and Social Sciences at the University of Vienna, he was a hardworking student and in due time got the doctorate. Then, an opportunity was offered to him to spend one year and several months in New York as secretary of Professor Jeremiah Jenks, of New York University, an eminent expert in the field of international monetary policies.
Some time after his return to Vienna, he was entrusted with the management of a newly founded scientific institution, the Austrian Institute of Business Cycle Research. He did a brilliant job in this field, not only as an economist but also as a statistician and an administrator. But in all these years, his main interest was economic studies. He was one of the group of young men who participated in the work and the discussions of my Privat-Seminar at the University of Vienna. He published several excellent essays on problems of money, prices and the trade cycle.
Political conditions in Austria made it rather questionable whether he would ever be appointed to a full professorship at an Austrian University. But England was, at that time, still free from prejudice against the free market economy. Thus, in 1931, Hayek was named Tooke Professor of Economic Science and Statistics at the University of London. Relieved from the administrative responsibilities that had shortened the time he could devote to scientific work in Vienna, he could now publish a number of eminent contributions to economic theory and their application to economic policies. He was soon quite properly considered as one of the foremost economists of our age.
The economist is not merely a theorist whose work is of direct interest only to other economists and is seldom read and understood by people outside the professional clan. As he deals with the effects of economic policies, he is by necessity always in the midst of the controversies that center around the policies and thereby the fate of the nations. Whether he likes it or not, he is forced to fight for his ideas and to defend them against vicious attacks.
Doctor Hayek has published many important books and essays and his name will be remembered as one of the great economists. But what made him known overnight to all people in the Western orbit, was a slim book published in 1944, The Road to Serfdom.
The nations of the West were then fighting the German and Italian dictatorships, the Nazis and the Fascists, in the name of liberty and the rights of man. As they saw it, their adversaries were slaves, while they themselves were resolutely dedicated to the preservation of the great ideals of individualism. But Hayek uncovered the illusory nature of this interpretation. He showed that all those features of the Nazi economic system that appeared as reprehensible in the eyes of the British and, for that matter, of their Western allies, were precisely the necessary outcome of policies which the “left” the self-styled Progressives, the planners, the socialists and, in the U.S., the New Dealers — were aiming at. While fighting totalitarianism, the British and their allies waxed enthusiastic over plans for transforming their own countries into totalitarian outfits and were proceeding farther and farther on this road to serfdom.
Within a few weeks, the small book became a bestseller and was translated into all civilized languages. Many people are kind enough to call me one of the fathers of the renaissance of classical nineteenth century ideas of freedom. I wonder whether they are right. But there is no doubt that Professor Hayek with his Road to Serfdom paved the way for an international organization of the friends of freedom. It was his initiative that led, in 1947, to the establishment of the Mont Pelerin Society, in which eminent libertarians from all countries this side of the Iron Curtain cooperate.
Having devoted thirty years to the study of the problems of economic theory and the epistemology of the social sciences and having done pioneer work in the treatment of many of these problems, Professor Hayek turned to the general philosophy of freedom. The result of his studies is the monumental treatise the Constitution of Liberty, published more than two years ago. It is the fruit of the years he spent in this country as Professor at the University of Chicago. It is a very characteristic fact that this Austrian-born scion of the Austrian School of Economics, who taught for many years at London, wrote his book on liberty in the country of Jefferson and Thoreau.
We are not losing Professor Hayek entirely. He will henceforth teach at a German University, but we are certain that from time to time he will come back for lectures and conferences to this country. And we are certain that, on these visits, he will have much more to say about epistemology, about capital and capitalism, about money, banking and the trade cycle, and, first of all, also about liberty. In this expectation, we may take it as a good omen that the name of the city of his future sphere of activity is Freiburg. “Frei” — that means free.
We do not consider tonight’s gathering a farewell party. We do not say “good-bye,” we say “till next time.”