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Book Review: The Collected Works of F.A. Hayek, Volume 4


The Collected Works of F.A. Hayek, Volume 4: The Fortunes of Liberalism, Essays on Austrian Economics and the Ideal of Freedom (Chicago: The University of Chicago, 1992); 279 pages; $29.95.

Classical liberalism has been under attack for practically all of the 20th century. After a hundred years of liberalism’s triumphs and victories in freeing the individual from the power of the state, political and economic collectivism began a counterattack in the last decades of the 19th century that unleashed two world wars, enabled socialism and the planned economy to be imposed over a large portion of the globe, and made possible the establishing of the welfare and interventionist states in the democratic West.

Friedrich A. Hayek was one of the most important voices opposing this trend. The University of Chicago Press has begun the publishing of the collected works of Professor Hayek. Volume 4, The Fortunes of Liberalism, is devoted to his “Essays on Austrian Economics and the Ideal of Freedom,” some of which have either not been published before or appear here in English for the first time.

In his essay “The Economics of the 1920s as Seen from Vienna,” Hayek presents an overview of the personalities and the ideas of the members of the Austrian School in the period between the world wars. And he explains some of those features in the Austrian approach that distinguished it from the economics found in England and the United States.

This is followed by a series of articles on the Austrian School of Economics in general and separate appreciations of Carl Menger (the founder of the Austrian School), Friedrich von Wieser (who first explained cost as a foregone opportunity), Ludwig von Mises, Joseph Schumpeter, Richard Strigi (who developed Austrian capital theory), Ernst Mach, and Ludwig Wittgenstein.

In these essays, Hayek not only provides insightful analyses of these scholars’ ideas, but offers a ram and fascinating picture of the culture and the intellectual world in central Europe during a period that is now long gone. In particular, the lengthy chapter on Ludwig von Mises (which brings together the various articles that Hayek had written about his mentor during the last half-century) demonstrates the profound impact that Mises’s contributions had on several generations of economists on both sides of the Atlantic — and just how much of Hayek’s own ideas owed to the influence of his teacher and friend.

The second part of the volume is devoted to essays on the revival and importance of classical liberalism in the post-World War 11 era, particularly in Germany. His article “The Rediscovery of Freedom: Personal Recollections” explains the process by which economic and political collectivism gained ascendancy in Germany and details how a handful of individuals made a difference in sustaining an understanding of the free society and the market economy for Germany’s recovery after 1945. Hayek details the influence of such men as Walter Eucken and Wilhelm Ropke in returning Germany to the path of limited government and free enterprise.

Hayek’s own influence, in helping to revive the philosophy of freedom after 1945 is appreciated in his “Opening Address to a Conference at Mont Pelerin,” which inaugurated the Mont Pelerin Society in 1947, an association of scholars from around the world devoted to the preservation of economic and political liberty. And his article “Historians and the Future of Europe,” demonstrates the importance of revisionist history in setting the record straight in opposition to the leftist historians who have tried for a hundred years to prove that all evils in the world have been caused by the market economy.

What has been a hallmark of all of Hayek’s writings is its interdisciplinary character. And these essays show this again. In Hayek’s mind, a defense of liberty could never be based purely on economic arguments alone. The case for economic freedom always had to be placed in the wider context of the use and value of freedom for individual and social improvement in general.

For example, Hayek was adamant that all lasting improvements in the morality of men required freedom. As he pointed out in his essay “The Moral Element in Free Enterprise” (not included in this volume), “It is … an old discovery that morals and moral values will grow only in an environment of freedom, and that, in general, moral standards of people and classes are high only where they long enjoyed freedom — and proportional to the amount of freedom they possessed.”

Hayek also insisted that men could not be trained or prepared for freedom and moral conduct before being given liberty: “It is true that a free society lacking a moral foundation would be a very unpleasant society in which to live. But it would even so be better than a society which is unfree and immoral; and it at least offers the hope of a gradual emergence of moral convictions which an unfree society prevents.”

Hayek, unfortunately, is now gone. But luckily he continues to speak to us in this collection. And we should want to listen, because what he has to say will have value for the preservation of the how society long after we ourselves, his listeners, are gone.

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    Dr. Richard M. Ebeling is the BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel. He was formerly professor of Economics at Northwood University, president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).