Monday, January 12, 2004

Ludwig the Lionheart and Murray the Magnificent...Coming Soon in the Boston Globe?

Virginia Postrel on F.A. Hayek...

But why no mention of Hayek's teacher? Ludwig von Mises: originator of the ideas that won Hayek a nobel prize.

Friedrich the Great

Dismissed by critics as a free-market extremist, economist Friedrich Hayek is gaining new attention as a forerunner of cognitive psychology, information theory, even postmodernism. A reintroduction to one of the most important thinkers you've barely heard of.

By Virginia Postrel

AT A RECENT think-tank luncheon in Raleigh, economist Bruce J. Caldwell chatted with a local lawyer active in Democratic party circles. The man asked Caldwell what his new book was about. "It's an intellectual biography of Friedrich Hayek," replied Caldwell, a professor at the University of North Carolina, Greensboro. He got a blank look. "He was an economist. A libertarian economist."

What an understatement.

Hayek, who died in 1992, was not just any economist. He won the Nobel Prize in economics in 1974. His 1945 article, "The Use of Knowledge in Society," is a touchstone work on the role of prices in coordinating dispersed information. His 1944 bestseller "The Road to Serfdom" helped catalyze the free-market political movement in the United States and continues to sell thousands of copies a year.

Economist Milton Friedman calls him "the most important social thinker of the 20th century." Hayek's most significant contribution, he explains, "was to make clear how our present complex social structure is not the result of the intended actions of individuals but of the unintended consequences of individual interactions over a long period of time, the product of social evolution, not of deliberate planning."

Indeed, Hayek is increasingly recognized as one of the 20th century's most profound and important theorists, one whose work included political theory, philosophy of science, even cognitive psychology. Citing the "proof of time," Encyclopedia Britannica recently commissioned Caldwell to replace its formulaic 250-word Hayek profile with a nuanced discussion more than 10 times as long. Harvard has added him to the syllabus of Social Studies 10, its rigorous introductory social theory course.

Hayek is fairly well known in Britain, where he spent much of his life, because of his influence on MargaretThatcher. In the United States, however, well-educated, intellectually curious people who nod at mentions of Max Weber, Hannah Arendt, or Michel Foucault have barely heard of him.

Politics has a lot to do with that ignorance. Hayek drew on the traditions of 18th- and 19th-century liberal thought, leading critics to dismiss him as a man of the past. He defended competitive markets against the champions of central planning, noting that supposedly "irrational" customs, traditions, and institutions often embody the hard-won knowledge of experience. He advocated cosmopolitan individualism in an age of nationalism and collectivism.

But Hayek turned out to be ahead of his time, not behind it. Arguing with the social engineers of the mid-20th century, he grappled with problems equally relevant to the 21st century. He anticipated today's rage for biological metaphors and evolutionary analysis, today's fragmented and specialized markets, today's emphasis on the legal institutions needed to make markets work, even today's multicultural challenges.

Hayek's 1952 book, "The Sensory Order," often considered his most difficult work, foreshadowed theories of cognitive science developed decades later. "Hayek posited spontaneous order in the brain arising out of distributed networks of simple units (neurons) exchanging local signals," says Harvard psychologist Steven Pinker. "Hayek was way ahead of his time in pushing this idea. It became popular in cognitive science, beginning in the mid-1980s, under the names `connectionism' and `parallel distributed processing.' Remarkably, Hayek is never cited."

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