The Essentials: F. A. Hayek

by admin on 04/10/2015 10:52 AM

FEE is happy to present the Essential series, five free ebooks collecting the key works of five great freedom philosophers: Leonard Read, Ludwig von Mises, Henry Hazlitt, F.A. Hayek, and Frédéric Bastiat. In each of these compact anthologies, you will find a powerful case for liberty.

But the ideas within are not mere fodder for debate. Like all great sages, these authors offer true wisdom that can inspire you and benefit you personally in your own life. Here is a discussion of just a few of the included works. We will review these to help us understand how the government intrusion into health care has decrease medical quality and decreased access.

The Essential F.A. Hayek

The distinguished economist F.A. Hayek (1899-1992) also noted the strong association among prosperity, freedom, and personal responsibility. In “The Moral Element in Free Enterprise” (included), he writes:

“Free societies have always been societies in which the belief in individual responsibility has been strong. They have allowed individuals to act on their knowledge and beliefs and have treated the results achieved as due to them. The aim was to make it worthwhile for people to act rationally and reasonably…”

The importance of individuals acting on their knowledge was the theme of Hayek’s groundbreaking article “The Use of Knowledge in Society” (included). Hayek asks, how are the innumerable scarce resources in a global economy to be used to best satisfy human wants? Of all the practically infinite possible ways of combining them, which is to be chosen?

Every tiny detail about the economy is relevant to this question. This includes every single preference of every single soul, and every relevant fact about every material resource. Existing knowledge about those myriad details is dispersed among billions of minds. How can all those bits of knowledge be integrated and utilized to inform the use of society’s resources? A central planning board could not possibly hope to gather and get a handle on so many bits, much less keep up with constant changes in knowledge and values. For a central planner to think otherwise would be “The Pretense of Knowledge” (which is the title of Hayek’s Nobel Prize acceptance speech, also included).

Hayek argues that the market price system is the only way that humanity has discovered to meaningfully cope with “the knowledge problem.” Every resource price is essentially the knowledge and values of millions of minds concerning that resource boiled down to a single number. All individuals can use these simple, yet information-rich prices to guide their economic choices. Describing what he calls the “marvel” of the market price system, Hayek writes:

“In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.”

Tables of Contents

The Essential F.A. Hayek

  1. The Case for Freedom
  2. The Use of Knowledge in Society
  3. The Pretense of Knowledge
  4. Intellectuals and Socialism
  5. The Moral Element in Free Enterprise
  6. Why I Am Not A Conservative

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Government is not the solution to our problems, government is the problem.

– Ronald Reagan

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