Economists from the United Kingdom

"All economic activity is carried out through time. Every individual economic process occupies a certain time, and all linkages between economic processes necessarily involve longer or shorter periods of time."

"The attack on economics sprang rather from a dislike of the application of scientific methods to the investigation of social problems. The existence of a body of reasoning which prevented people from following their first impulsive reactions, and which compelled them to balance indirect effects, which could be seen only by exercising the intellect, against intense feeling caused by the direct observation of concrete suffering, then as now, occasioned intense resentment."

"The reasons why the adoption of a system of central planning necessarily produces a totalitarian system are fairly simple. Whoever controls the means must decide which ends they are to serve. As under modern conditions control of economic activity means control of the material means for practically all our ends, it means control over nearly all our activities. The nature of the detailed scale of values which must guide the planning makes it impossible that it should be determined by anything like democratic means. The director of the planned system would have to impose his scale of values, his hierarchy of ends, which, if it is to be sufficient to determine the plan, must include a definite order of rank in which the status of each person is laid down. If the plan is to succeed or the planner to appear successful, the people must be made to believe that the objectives chosen are the right ones. Every criticism of the plan or the ideology underlying it must be treated as sabotage. There can be no freedom of thought, no freedom of the Press, where it is necessary that everything should be governed by a single system of thought. In theory Socialism may wish to enhance freedom, but in practice every kind of collectivism consistently carried thought must produce the characteristic features which Fascism, Nazism, and Communism have in common. Totalitarianism is nothing but consistent collectivism, the ruthless execution of the principle that 'the whole comes before the individual' and the direction of all members of society by a single will supposed to represent the 'whole'."

"The treatment of the South Tirolese by the Italians, even before the advent of Fascism worse than anything known until then in modern times in any part of Western or Central Europe, has made the population more unwilling than ever to endure it further."

"Conservatism, though a necessary element in any stable society, is not a social program; in its paternalistic, nationalistic and power adoring tendencies it is often closer to socialism than true liberalism; and with its traditionalistic, anti-intellectual, and often mystical propensities it will never, except in short periods of disillusionment, appeal to the young and all those others who believe that some changes are desirable if this world is to become a better place."

"The more the state "plans" the more difficult planning becomes for the individual."

"The mechanism by which the interaction of democratic decisions and their implementation by the experts often produces results which nobody has desired is a subject which would deserve much more careful attention than it usually receives."

"Yet, though the French Revolution was so largely inspired by the ideal of the Rule of Law, it is questionable whether it really helped the advance towards that ideal. In its course too many different aspirations gained influence which it was difficult to reconcile with that ideal."

"What all this amounts to, then, is that the Rule of Law requires that administrative discretion in coercive action (i.e., in interfering with the person and property of the private citizen) must always be subject to review by an independent court which is not an instrument of, or even privy to, the aims of current governmental policy; that its review must in all such instances extend to the substance of the administrative act and not merely to the question whether it was infra or ultra vires; and that, if such a court finds that the rights of private citizens have been infringed, it will assess damages just as if the right of this person had been violated by another private citizen. This, in addition to the familiar requirements of generality, equality, and certainty of the law is really the crux of the matter, the decisive point on which it depends whether the Rule of Law prevails or not."

"I believe that the main lesson which our generation has learnt is that we must find a new limit for the activities of government, a limit which leaves ample scope for sensible experimentation but which secures the freedom of the individual as the mainspring of all social and political activity. The whole purpose of these lectures has been to suggest that we can find such a limit if we are willing to revive and develop the ancient ideal of the Rule of Law."

"[Apartheid law in South Africa] appears to be a clear and even extreme instance of that discrimination between different individuals which seems to me to be incompatible with the reign of liberty. The essence of what I said [in The Constitution of Liberty] was really the fact that the laws under which government can use coercion are equal for all responsible adult members of that society. Any kind of discrimination — be it on grounds of religion, political opinion, race, or whatever it is — seems to be incompatible with the idea of freedom under the law. Experience has shown that separate never is equal and cannot be equal."

"Since the value of freedom rests on the opportunities it provides for unforeseen and unpredictable actions, we will rarely know what we lose through a particular restriction of freedom."

"What I expect is that inflation will drive the Western countries into a planned economy via price controls. Nobody will dare to stop inflation because to discontinue inflation will inevitably cause extensive unemployment. So assuming inflation stops it will quickly be resumed. People will find they can't live with constantly rising prices and will try to control it by price controls and that of course is the end of the market system and the end of the free political order. So I think it will be via the attempt to regress the effects of a continued inflation that the free market and free institutions will disappear. It may still take ten years, but it doesn't matter much for me because in ten years I hope I shall be dead."

"Perhaps I'm unrealistic. As long as people do not fully realize the danger of inflation, they may well pressure for more inflation as a short-term remedy for evils. Though we may well be driven into more, until people have learned the lesson, but that means that inflation may still do more of a great deal of harm, before it will be cured."

"The sentence, 'stopping the printing presses,' is a figurative expression, because it is being done now by creating credit by the Federal Reserve System. But this is government action — all inflation is ultimately the result of activities which government determines and can control. And all inflations have been stopped in the past by the government stopping creating money, or preventing the central bank from creating more money. May I add just one thing? See, all inflations have been stopped by people who created or believed in a very naive form of the Quantity Theory, and acted on that. It may be wrong, but it is the only adequate theory effective to stop an inflation."

"May one who has devoted a large part of his life to the study of the history and the principles of liberalism point out that a party that keeps a socialist government in power clearly has lost all title to the name “Liberal”. Certainly no liberal can in future vote “Liberal”."

"I've always doubted that the socialists had a leg to stand on intellectually. They have improved their argument somehow, but once you begin to understand that prices are an instrument of communication and guidance which embody more information than we directly have, the whole idea that you can bring about the same order based on the division of labor by simple direction falls to the ground. Similarly, the idea [that] you can arrange for distributions of incomes which correspond to some conception of merit or need. If you need prices, including the prices of labor, to direct people to go where they are needed, you cannot have another distribution except the one from the market principle. I think that intellectually there is just nothing left of socialism."

"When will the British public at last learn to understand that there is no salvation for Britain until the special privileges granted to the trade unions by the Trade Disputes Act 1906 are revoked? ... There can indeed be little doubt to a detached observer that the privileges then granted to the trade unions have become the chief source of Britain's economic decline."

"What is at issue is not union membership but compulsory union membership and not the right to strike but the right to compel others to strike. There is no need for any other explanation of why the British economy is decaying and the German highly prosperous. The trade unions, being politically sacrosanct, have been allowed to destroy the British economy, and since even somebody as sympathetic to labour as Lady Wootton has told us that “it is in fact the business of a union to be anti-social”, it is high time that somebody had the courage to eradicate that cancer of the British economy."

"What struck me most in this conversation was a radical passion for truthfulness in everything (which I came to know as a characteristic vogue among the young Viennese intellectuals of the generation immediately preceding mine only in the following university years). This truthfulness became almost a fashion in that border group between the purely Jewish and the purely Gentile parts of the intelligentsia in which I came so much to move. It meant much more than truth in speech. One had to "live" truth and not tolerate any pretence in oneself or others. It sometimes produced outright rudeness and, certainly, unpleasantness. Every convention was dissected and every conventional form exposed as fraud. Wittgenstein merely carried this further in applying it to himself. I sometimes felt that he took a perverse pleasure in discovering falsehood in his own feelings and that he was constantly trying to purge himself of all fraud."

"The next time I met Ludwig Wittgenstein was in the spring of 1928 when the economist Dennis Robertson, who was taking me for a walk through the Fellows' Gardens of Trinity College, Cambridge, suddenly decided to change course because on the top of a little rise he perceived the form of the philosopher draped over a deckchair. He evidently stood rather in awe of him, and he did not wish to disturb him."

"I have arrived at the conviction that the neglect by economists to discuss seriously what is really the crucial problem of our time is due to a certain timidity about soiling their hands by going from purely scientific questions into value questions. This is a belief deliberately maintained by the other side because if they admitted that the issue is not a scientific question, they would have to admit that their science is antiquated and that, in academic circles, it occupies the position of astrology and not one that has any justification for serious consideration in scientific discussion. It seems to me that socialists today can preserve their position in academic economics merely by the pretense that the differences are entirely moral questions about which science cannot decide."

"I suggested before that the whole of economic history could be rewritten in terms of this gradual suppression of the primitive in­stincts by what we very mistakenly call “artificial” rules. Of course, they are not in the strict sense artificial. Nobody ever invented them. They were not the result of design. The new manners of conduct were not adopted because anybody thought they were better. They were adopted because somebody who acted on them profited from it and his group gained from it, and so these rules, without anybody under­ standing them—that is very important for the later part of my argu­ment—without anybody understanding in what way they benefited their community, gradually came to be generally accepted."

"There can be no doubt that our innate moral emotions and instincts were acquired in the hundreds of thousand years—probably half a million years—in which Homo sapiens lived in small hunting and gathering groups and developed a physiological constitution which governed his innate instincts. These instincts are still very strong in us. Yet civilization developed by our gradually learning cultural rules which were trans­mitted by teaching and which served largely to restrain and suppress some of those natural instincts."

"Nobody who has lived through the rise of the violent anti-Semitism which led to Hitler can refuse Mrs. Thatcher admiration for her courageous and outspoken warning. When I grew up in Vienna the established Jewish families were a generally respected group and all decent people would frown upon the occasional anti-Jewish outbursts of a few popular politicians. It was the sudden influx of large numbers of Galician and Polish Jews [during World War I] … which in a short period changed the attitude. They were too visibly different to be readily absorbed."

"A limited democracy might indeed be the best protector of individual liberty and be better than any other form of limited government, but an unlimited democracy is probably worse than any other form of unlimited government, because its government loses the power even to do what it thinks right if any group on which its majority depends thinks otherwise. If Mrs. Thatcher said that free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom, while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government of an unlimited democracy which cannot."

"I have certainly never contended that generally authoritarian governments are more likely to secure individual liberty than democratic ones, but rather the contrary. This does not mean, however, that in some historical circumstances personal liberty may not have been better protected under an authoritarian than democratic government. (...) More recently I have not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende. Nor have I heard any sensible person claim that in the principalities of Monaco or Lichtenstein, which I am told are not precisely democratic, personal liberty is smaller than anywhere else!"

"She was a very good-looking woman, and extremely intelligent. But she wasn’t really very female; she had too much of a male intelligence."

"I don’t have many strong dislikes. I admit that as a teacher—I have no racial prejudices in general—but there were certain types, and conspicuous among them the Near Eastern populations, which I still dislike because they are fundamentally dishonest. And I must say dishonesty is a thing I intensely dislike. It was a type which, in my childhood in Austria, was described as Levantine, typical of the people of the eastern Mediterranean. But I encountered it later, and I have a profound dislike for the typical Indian students at the London School of Economics, which I admit are all one type—Bengali moneylender sons. They are to me a detestable type, I admit, but not with any racial feeling. I have found a little of the same amongst the Egyptians —basically a lack of honesty in them. If I advise speaking about honesty, I think honesty is really the best expression of what I call the morals of a civilized society. Primitive man lacks a conception of honesty."

"The misconception that costs determined prices prevented economists for a long time from recognizing that it was prices which operated as the indispensable signals telling producers what costs it was worth expending on the production of the various commodities and services, and not the other way around. It was the costs which they had expended which determined the prices of things produced.It was this crucial insight which finally broke through and established itself about a hundred years ago through the so-called marginal revolution in economics.The chief insight gained by modern economists is that the market is essentially an ordering mechanism, growing up without anybody wholly understanding it, that enables us to utilize widely dispersed information about the significance of circumstances of which we are mostly ignorant. However, the various planners (and not only the planners in the socialist camp) and dirigists have still not yet grasped this."

"The social sciences building at the University of Chicago indeed still bears since it was built 40 years ago on its outside an inscription taken from the famous physicist Lord Kelvin: "When you cannot measure, your knowledge is meager and unsatisfactory." I will admit that that may be true, but it is certainly not scientific to insist on measurement where you don't know what your measurements mean. There are cases where measurements are not relevant. What has done much damage to microeconomics is striving for a pseudo-exactness by imitating methods of the physical sciences which have to deal with what are fundamentally much more simple phenomena. And the assumption that it is possible to ascertain all the relevant particular facts still completely dominates the alternative methods of dealing with our constitutional ignorance, which economists have tried to overcome. This of course, is what has come to be called macroeconomics as distinct from microeconomics."

"It seems to me more and more that the immense efforts which during the great popularity of macroeconomics over the last thirty or forty years have been devoted to it, were largely misspent, and that if we want to be useful in the future we shall have to be content to improve and spread the admittedly limited insights which microeconomics conveys.I believe it is only microeconomics which enables us to understand the crucial functions of the market process: that it enables us to make effective use of information about thousands of facts of which nobody can have full knowledge."

"What a free society offers to the individual is much more than what he would be able to do if only he were free."

"A society that does not recognize that each individual has values of his own which he is entitled to follow can have no respect for the dignity of the individual and cannot really know freedom."

"Freedom granted only when it is known beforehand that its effects will be beneficial is not freedom."

"Justice, like liberty and coercion, is a concept which, for the sake of clarity, ought to be confined to the deliberate treatment of men by other men."

"Conservatism proper is a legitimate, probably necessary, and certainly widespread attitude of opposition to drastic change. It has, since the French Revolution, for a century and a half played an important role in European politics. Until the rise of socialism its opposite was liberalism... There is nothing corresponding to this conflict in the history of the United States, because what in Europe was called ‘liberalism’ was here the common tradition on which the American polity had been built: thus the defender of the American tradition was a liberal in the European sense."

"The assurance of a certain minimum income for everyone, or a sort of floor below which nobody need fall even when he is unable to provide for himself, appears not only to be a wholly legitimate protection against a risk common to all, but a necessary part of the Great Society in which the individual no longer has specific claims on the members of the particular small group into which he was born."

"I must confess that if I had been consulted whether to establish a Nobel Prize in economics, I should have decidedly advised against it."

"I feared that such a prize, as I believe is true of the activities of some of the great scientific foundations, would tend to accentuate the swings of scientific fashion. This apprehension the selection committee has brilliantly refuted by awarding the prize to one whose views are as unfashionable as mine are."

"The Nobel Prize confers on an individual an authority which in economics no man ought to possess. This does not matter in the natural sciences. Here the influence exercised by an individual is chiefly an influence on his fellow experts; and they will soon cut him down to size if he exceeds his competence. But the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally. There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society — as the press tends to treat him till in the end he may himself be persuaded to believe."

"My whole concept of economics is based on the idea that we have to explain how prices operate as signals, telling people what they ought to do in particular circumstances. The approach to this problem has been blocked by a cost or labor theory of value, which assumes that prices are determined by the technical conditions of production only. The important question is to explain how the interaction of a great number of people, each possessing only limited knowledge, will bring about an order that could only be achieved by deliberate direction taken by somebody who has the combined knowledge of all these individuals. However, central planning cannot take direct account of particular circumstances of time and place. Additionally, every individual has important bits of information which cannot possibly be conveyed to a central authority in statistical form. In a system in which the knowledge of relevant data is dispersed among millions of agents, prices can act to coordinate the separate actions of different individuals. Given this context, it is intellectually not satisfactory to attempt to establish causal relations between aggregates or averages in the manner in which the discipline of macroeconomics has attempted to do. Individuals do not make decisions on the basis of partial knowledge of magnitudes such as the total amount of production, or the total quantity of money. Aggregative theorizing leads nowhere."

"I think the basic misconception is to speak of the so-called “best” allocation of resources. What is the best? In common economics it is defined as what would be if we knew everything. Economists operate with the fictitious assumption that all the relevant data is known, but this is totally unrealistic. Nobody knows all the data. What we have is widely dispersed knowledge, which cannot be concentrated in one mind. To call the situation—which would use all the knowledge available—“optimal” is nonsense because it is by definition a non-achievable solution. Our problem is not the full utilization of all knowledge but the best use we can achieve with any known institutional structure. In that sense, some oligopolistic (and even monopolistic situations), represent the best possible utilization of knowledge that we can achieve. Even the action of a monopolist can be extremely beneficial."

"There is no doubt, and in this I agree with Milton Friedman, that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation! So, once again, a badly programmed monetary policy prolonged the depression! So, once again, a badly programmed monetary policy prolonged the depression. One consequence of this policy was, of course, the fact that confidence was destroyed."

"It seems to me that the future of peaceful international relations and the safety of persons in foreign countries would have been much better served if, after the Iranian Government placed itself outside the community of nations by approving the holding captive of the personnel of the United States embassy, the United States Government had at once sent an ultimatum saying that, unless every single member of the embassy staff were within 48 hours handed over unharmed to representatives of the United States Government at some place outside Iran, bombs would be falling at an increasing rate at the seat of the Iranian Government."

"The newfangled word monetarism means of course no more than the good old “quantity theory of money”, as it was formulated in modern times by the late Professor Irving Fisher and reformulated by Professor Milton Friedman. Of this I said nearly 50 years ago in the first lecture I delivered in this country that “from a practical point of view, it would be one of the worst things which could befall us if the general public should ever again cease to believe in the elementary propositions of the quantity theory”. This was, however, unfortunately brought about by the seductive theories of Lord Keynes. I then said that it was in many respects a crude over-simplification, but the irrefutable chief content is still that inflation is always and everywhere the effect of an excessive supply of money and that it can be cured only by a restriction of its supply."

"The knowledge of facts is widely dispersed. We want to make use of knowledge possessed by millions of individual people, which they can only use if they are fed signals about the general situation. You can't reverse it you can't possibly concentrate this knowledge. The whole order of international cooperation has been built on such a signalling system, where signals tell you about facts which nobody knows concrete in their totality, and I may add such signals you cannot correct - you can not correct signals which inform you about circumstances you don't know."

"Both altruism and solidarity are very strong instincts which guided man in the small group. We were serving known other persons when his efforts were directed to the needs of familiar people. Now we have grown as rich as we are because we have replaced this by a system where we no longer work for the known needs of known other people, and no longer use the known assistance of other people, but where our effort is completely guided by price signals, which for the individual means that I must use my resources for the maximum success of what resources is sacrificed for the purpose, but the justification is not my benefit but in this way I benefit my fellow man most. So it does happen that so far as commercial activities economic activities are concerned we will benefit our fellow man most if we are guided solely by the striving for gain. We are then completely free how to use what we have earned and there of course the desire for being altruistic come in very strongly, but not in the ordering principle of our society."

"I did say in print, in February, 1929 that there was no hope for economic recovery in Europe before American interest rates came down. That wouldn’t be until the American boom collapsed — which was likely to happen within the next few months.And this did, in fact, happen in October 1929. What made me expect this, of course, was one of my main theoretical beliefs — that an inflationary boom cannot be maintained indefinitely. I was sure that a very unstable situation was created by the artificial prolongation of the boom in 1927, when the Federal Reserve tried to stave off a collapse by credit expansion."

"I don’t believe we’re in for a crash now. It's much more likely that government will just conceal the continuation of inflation by price controls. But if anything is worse than an open inflation, it’s a repressed inflation. What you’re likely to get is not a violent deflation but increasing stagnation of productivity."

"If the world as a whole returned to the gold standard there would be such fluctuations in the value of gold that it would very soon prove impractical. Today an international gold standard could only mean that a few countries would maintain a real gold standard. The other countries would hang on to the system through a gold exchange standard — where the currency isn't really redeemable in gold but the government attempts to keep a fixed rate between its currency and gold."

"If a big country like the United States did return to the gold standard, it would start a great deflation. Most likely the government couldn't stick to it for long. They'd switch the policy to some halfway measure like a gold exchange standard."

"The advice I would give is: If you have the courage to do so, don't feel patriotic in monetary matters. Choose the money which helps you best."

"When I look at the world, I sometimes feel that here in Germany one may still be in some sort of lifeboat that can hope to keep afloat when the rest of the world goes bust. German and Switzerland and perhaps Austria and Belgium have the few relatively stable currencies in the world."

"There is no salvation for Britain unless the special privileges granted to the trade unions in 1906 are revoked. The average level of real wages of British workers would undoubtedly be higher, and their chances of finding employment better, if the wages of different occupations were again determined by the market and all limitations on the work an individual is allowed to do were removed."

"It should surprise no one that the lost generation of British economists who had succumbed to the teachings of Lord Keynes should form a panicky mob when a reversal of the policies they had inspired reveals the damage they have done. ... Following their advice has induced a structure of employment that can be maintained only by accelerating inflation but will collapse only when it becomes a gallop and destroys any possibility of a rational use of resources. Nobody has ever claimed that so long as it is necessary to reduce inflation to get out of this vicious circle the effect can be anything but to destroy the particular employments created by past inflation. Only after inflation has been brought to a full stop can the market be expected to guide workers to jobs which can be maintained without accelerating inflation. All those who plead for “mild” inflation and oppose “too much” inflation are merely preparing the ground for a later depression."

"Well, I would say that, as long-term institutions, I am totally against dictatorships. But a dictatorship may be a necessary system for a transitional period. At times it is necessary for a country to have, for a time, some form or other of dictatorial power. As you will understand, it is possible for a dictator to govern in a liberal way. And it is also possible for a democracy to govern with a total lack of liberalism. Personally I prefer a liberal dictator to democratic government lacking liberalism. My personal impression — and this is valid for South America — is that in Chile, for example, we will witness a transition from a dictatorial government to a liberal government. And during this transition it may be necessary to maintain certain dictatorial powers, not as something permanent, but as a temporary arrangement."

"I cannot help but protest in the strongest possible terms against the cartoon on page 3 of your publication of the 30th of December equating the present governments of Poland and Chile. It can only be explained by complete ignorance of the facts or by the systematically promoted socialist calumnies of the present situation in Chile, which I had not expected the F.A.Z. to fall for. I believe that all the participants in the Mont Pelerin Society conference held a few weeks ago in Chile would agree with me that you owe the Chilean government a humble apology for such twisting of the facts. Any Pole lucky enough to escape to Chile could consider himself fortunate."

"The illiterate expression ‘given data’ constantly recurs in Lange. It appears to have an irresistable attraction to mathematical economists because it doubly assures them that they know what they do not know. It seems to bewitch them into making assertions about the real world for which they have no empirical justification whatever."

"What the planning authority would have to know would not be the mere totals but the distinct, peculiar conditions prevailing in each enterprise which affect the information about values transmitted through market prices but would be completely lost in any statistical information about quantities that might reach the authority from time to time."

"There mere idea that the planning authority could ever possess a complete inventory of the amounts and qualities of all the different materials and instruments of production of which the manager of a particular plant will know or be able to find out makes the whole proposal a somewhat comic fiction. Once this is recognised it becomes obvious that what prices ought to be can never be determined without relying on competitive markets."

"A reconsideration of the discussion in which I took an active part more than 40 years ago has left me with a rather depressing view of the somewhat shameful state of what has become an established part of economic science, the subject of 'economic systems'. It appears to me that in this subject political attractiveness has been preserved by the flimsiest of arguments. The kindest thing one can say is that some well-meaning people have allowed themselves to be deceived by the vague and thoughtless language commonly used by specialists in the theory of these issues."

"These morals, or better this moral tradition, is the result of an evolution which occurred parallel to, and yet distinct from both biological evolution on the one hand, and the evolution of our intellect on the other hand."

"On the scale on which [tax cutting] is being tried, I'm a little apprehensive. I'm all for reduction of government expenditures but to anticipate it by reducing the rate of taxation before you have reduced expenditure is a very risky thing to do."

"My life has been dominated by my differences with John Maynard Keynes. That turns almost wholly on the - I believe, false - conviction that there is a simple relationship between aggregate demand for consumer goods and the volume of employment. Keynes was one of the most intelligent people I knew but he understood very little economics. He must not be blamed for his disciples. He knew the danger of inflation."

"[Milton Friedman] believes in an oversimplified quantitative relationship between a measurable quantity of money and the price level. You must leave it to the discretion of the central bank to so adjust the supply of ultimate cash reserves as to keep the price level stable."

"The social product which is now maintaining a human population of this world four or five hundred times as large as that which man could achieve in the natural hunting and gathering stage is owed only to the division of labor, skills, and knowledge. This division could never have been designed or planned, but it arose through and is now maintained by the guiding service of competitive market prices and wages that tell each person where its efforts can make the largest contribution to the total. These self-generating signals, which inform the individuals about the combined efforts of thousands of events of which they can have no direct information, bring about an adaptation of the individual efforts to the unknown. No central direction could achieve this adaptation because the knowledge of all the facts of which the market takes account is spread among thousands and cannot be known to any central authority. It is, of course, impossible to improve signals when one does not know what determines them. Wealth, which social justice would like to distribute as a reward for merit and need, is, therefore, due to the circumstance that the direction of individual efforts is guided by a choice between returns which depends largely on accidental circumstances of time and place and is effected but not conclusively determined by what the individual can know or do. Thus, the wealth which the advocates of social justice want to redistribute would not exist if social justice reigned. Social justice is a fraud, a promise to distribute what one would not have if one followed its bidding. Wealth just would not be there or would rapidly disappear if the ordering by the principles of the market that now guide its production were replaced by some others which would give to each that to which he imagines himself to be entitled."

"We have found a method of creating an order of human co–operation which far exceeds the limits of our knowledge. We are led to do things by circumstances of which we are largely unaware. We do not know the needs which we satisfy, nor do we know the sources of the things which we get. We stand in an enormous framework into which we fit ourselves by obeying certain rules of conduct that we have never made and never understood, but which have their reason."

"We do not owe our morals to our intelligence: we owe them to the fact that some groups uncomprehendingly accepted certain rules of conduct — the rules of private property, of honesty, and of the family — that enabled the groups practising them to prosper, multiply, and gradually to displace the others."

"Our morality itself is the result of a process of cultural selection. Those things survive which enable the species to multiply."

"I believe you will be shocked by my stating this so bluntly because we are still guided instinctively by those inherited "natural" emotions. But I think we must recognize that we have become a worldwide, peaceful, and prosperous society by having learned to disregard those natural instincts and to follow instead certain abstract rules of honesty—rules establishing private property and ultimately codified in the form of private law. It is the rules of property and contract on which the growth of a worldwide, peaceful, and prosperous society was based. All these are traditional rules that evolved by a process of selection, which made those groups who followed the new rules more prosperous than other groups, and which thus came gradually to govern the civilised part of the world. Those communities who adopted the new rules and, in doing so, infringed upon deeply embedded natural feelings became the successful ones, the ones who multiplied because they were more prosperous and were able to attract people from other groups."

"In a sense, we all are socialists. We are still governed by feelings that are based on what was necessary in the small group of known people among whom each had to aim at fulfilling the needs of persons he knew; where he had to collaborate with a definite group of fellows, who were given to him and whom he could not choose, to pursue common purposes. Our instincts still tell us to strive to serve the known needs of known people and that our pleasure in life is derived from the consciousness that we follow a set of common purposes with people whom we know and who share our environment."

"Our whole modern society, based on a far-ranging division of labour, is, however, essentially dependent on two factors that conflict with our natural instincts. The first is the assumption, implicit but not understood, that we can do more good to unknown people if we follow the impersonal signals of the market, which enable us to serve the needs of people whom we do not know and to make use of opportunities and facilities with which we have no direct acquaintance. The second is that for this purpose we can follow our own individual aims with freely chosen associates and are not bound to serve the concrete ends of the group into which we were born."

"I don't know what monetarism is. If monetarism just means a good old-fashioned quantity theory, of course it has not failed. If it means the particular version of Milton Friedman, I think it has because he imagines that he can achieve — ascertain — a clear quantity relationship between a measurable quantity of money and the price level. I don't think that is possible. In fact, just about 40 years ago in the opening sentences of my book, Prices and Production, I wrote that it would be a great misfortune if people ever cease to believe in the quantity theory of money. It would be even worse ever to believe it literally. And that's exactly what Milton Friedman does."

"The human groups have been selected for the effects of their habitual practices, effects of which the individuals were not and could not be aware. Customs are mostly group properties, beneficial only if they are common properties of its individual members but referring to reciprocal action. Morals have not only been designed by man, but man also usually does not understand their reason."

"All the paradigms of culturally evolved institutions, morals, exchange, and money refer to such practices whose benefits transcend the individuals who practice them in the particular instances. The result is that whole groups may be helped by them to expand into what I shall call extended orders, through the effects of practices of which the individuals are not aware. Such practices can lead to the formation of orderly structures far exceeding the perception of those whose actions produce them. They make possible the adaptation of such actions to unknown circumstances and lead to the formation of an indefinitely expansible order which can develop only through group selection, that is, a selection of groups for common attributes possessed by them."

"It is no exaggeration to say that the central aim of socialism is to discredit those traditional morals which keep us alive."

"And since any inflation, however modest at first, can help employment only so long as it accelerates, adopted as a means of reducing unemployment, it will do so for any length of time only while it accelerates. "Mild" steady inflation cannot help—it can lead only to outright inflation. That inflation at a constant rate soon ceases to have any stimulating effect, and in the end merely leaves us with a backlog of delayed adaptations, is the conclusive argument against the "mild" inflation represented as beneficial even in standard economics textbooks."

"It seems to me that my original plan is right, but I am afraid that I’ve come to the conclusion that politically, it is completely Utopian. Governments will never allow monetary competition, and even bankers do not understand the idea because they have all grown up in the system which is so completely dependent on central banks. So I think we need a roundabout way. After all, in the modern world, currency is no longer the most important money. Credit and credit cards are substitutes. While governments can stop people from issuing money, they can hardly stop them from opening accounts in something unless they introduce a complete system of exchange control. I do not expect that any bank will understand this idea. But I hope that one of the big dealers in raw materials will be prepared to open accounts which will be redeemable in so much of current moneys as are necessary to buy this list of raw materials. Through these accounts he can make his unit—call it the “solid”—the standard unit without it ever being used in circulation. People very soon will begin to keep their accounts in “solids”—the only thing which is trustworthy. Although it’s a thing where many people can compete, most of them will probably choose the same list of raw materials. If one major firm will start this, others will imitate it. So I think we can forget about existing money and existing banks, and gradually open a system of accounts which will displace the government money."

"I don't like criticizing Milton Friedman not only because he is an old friend but because, outside of monetary theory, we are in complete agreement. Our general views on what is desired and what is not are almost identical until we get on to money. But if I told him what I said before, that I very much doubt whether monetary policy has ever done anything good, he would disagree. He personally is convinced that a good monetary policy is a foundation for everything."

"I don't believe that we shall ever have a good money again before we take the thing out of the hands of government, and since we can't take them violently out of the hands of government, all we can do is by some sly roundabout way introduce something they can't stop."

"Those who suffer from this monopoly should form a libertarian anti-labour union movement of workers directed against what has long become a deceptive farce favouring an elite that has gained dominance in a party wrongly claiming to represent the interest of all workers. Once it is recognized that the unions prevent people from getting jobs, such a movement may readily spread."

"The socialist argument continues despite its many defeats―on the impossibility of economic calculation under collectivism, the fallacious claims for the use of markets under socialism, the incompatibility of liberty and state direction of the economy, and many others. The argument is being won by the new liberals of the late 20th century. But many people still do not understand it. And most on the Left continue to resist it."

"Our basic problem is that we have three levels, I would say, of moral beliefs. We have the first instance, our intuitive moral feelings which are adapted to the small, person-to-person society where we act for people whom we know and are served by people whom we know. Then, we have a society governed by moral traditions which, unlike what modern rationalists believe, are not intellectual discoveries of men who designed them, but as a result of a persons, which I now prefer to describe as term of 'group selection.' Those groups who had accidentally developed such as the tradition of private property and the family who did succeed, but never understood this. So we owe our present extended order of human cooperation very largely to a moral tradition which the intellectual does not approve of, because it has never been intellectually designed and it has to compete with a third level of moral beliefs, those which the morals which the intellectuals designed in the hope that they can better satisfy man's instincts than the traditional morals to do. And we live in a world where three moral traditions are in constant conflict, the innate ones, the traditional ones, and the intellectually designed ones, and ultimately, all our political conflicts of this time can be reduced as affected by a conflict between free moral tradition of a different nature, not only of different content."

"I mean, it became particularly acute because Keynes, against his intentions, had stimulated the development of macroeconomics. And I was convinced that not only his particular conclusions, but the whole foundation of macroeconomics was wrong. So I wanted to demonstrate that we had to return to microeconomics, that this whole prejudice supported by the natural scientists that could deduce anything from measurable magnitudes, the effects of aggregates and averages, came to fascinate me much more. I felt in a way, that the thing which I am now prepared to do, I don’t know as there’s anybody else who can do this particular task. And I rather hoped that what I had done in capital theory would be continued by others. This was a new opening which was much more fascinating. The other would have meant working for a result which I already knew, but had to prove it. Which was very dull. The other thing was an open problem: How does economics really look like when you recognize it as the prototype of a new kind of science of complex phenomena which could not employ the simple model of mechanics or physics, but had to deal with what then I described as mere pattern predictions, certain limited prediction. That was so much more fascinating as an intellectual problem."

"Altruism is an instinct we've inherited from the small society where we knew for whom we work, whom we serve. When you pass from this, as I like to call it, 'concrete society', where we are guided by what we see, to the abstract society which far transcends our range of vision, it becomes necessary that we are guided not by the knowledge of the effect of what we do, but by some abstract symbols. Now, the only symbol which tells us where we can make the best contribution is profit. And in fact by pursuing profit, we are as altruistic as we can possibly be, because we extend our concern to people who are beyond our range of personal conception. This is a condition which makes it possible to produce what I call an extended order, an order which is not determined by our aim, by our knowing what are the most urgent needs, but by an impersonal mechanism which by a system of communication puts a label on certain things which is fully impersonal."

"I am now profoundly convinced of what I had only hinted at before, namely, that the struggle between the advocates of a free society and the advocates of the socialist system is not a moral but an intellectual conflict. Thus socialists have been led by a very peculiar development to revive certain primitive instincts and feelings which in the course of hundreds of years had been practically suppressed by commercial or mercantile morals, which by the middle of the last century had come to govern the world economy."

"Questions about the influence of socialism are increasingly more difficult to answer as the word socialism has so many meanings. The idea that the inequalities of incomes can be greatly reduced has come to be recognized as largely impractical. Practically all endeavours at just distribution express more or less arbitrary conceptions of what is just and the central idea of Marxian socialism of a rationalisation of the means of production has been largely abandoned as technically impracticable. I believe that in general the idea of justice is more closely met by a freely competitive market than by any deliberate allocation of income to some imagined ideal of the kind."

"You cannot successfully use your technical knowledge unless you are a fairly educated person, and, in particular, have some knowledge of the whole field of the social sciences as well as some knowledge of history and philosophy. Of course real competence in some particular field comes first. Unless you really know your economics or whatever your special field is, you will be simply a fraud. But if you know economics and nothing else, you will be a bane to mankind, good, perhaps, for writing articles for other economists to read, but for nothing else."

"An evil fate befall German efforts to defend the ideal of liberty in general and in the field of economics in particular, with the result that today I am almost the only survivor of a generation that set out in the wake of the First World War to devote all its energies to the preservation of a civilised society, a generation that set itself the task to build a better society in a systematic fashion and to learn to understand, and to some extent defend, a tradition that had civilised the world."

"Life at Cambridge during those war years was to me particularly congenial, and it completed the process of thorough absorption in English life which, from the beginning, I had found very easy. Somehow the whole mood and intellectual atmosphere of the country had at once proved extraordinarily attractive to me, and the conditions of a war in which all my sympathies were with the English greatly speeded up the process of becoming thoroughly at home—much more than in my native Austria from which I had already become somewhat estranged during the conditions of the 1920s. While neither on my early visit to the United States nor during my later stay there or still later in Germany did I feel that I really belonged there, English ways of life seemed so naturally to accord with all my instincts and dispositions that, if it had not been for very special circumstances, I should never have wished to leave the country again. And of all the forms of life, that at one of the colleges of the old universities...still seems to me the most attractive. The evenings at the High Table and the Combinations Room at King's are among the pleasantest recollections of my life, and some of the older men I came then to know well, especially J.H.Clapham, remained, while they lived, dear friends."

"Since only actions aimed at perceived benefit to others were, to Aristotle's mind, morally approved, actions solely for personal gain must be bad. That commercial considerations may not have affected the daily activities of most people does not mean however that over any prolonged period their very lives did not depend on the functioning of a trade that enabled them to buy essentials. That production for gain which Aristotle denounced as unnatural had -- long before his time -- already become the foundation of an extended order far transcending the known needs of other persons."

"Whereas, in fact, specialised students, even after generations of effort, find it exceedingly difficult to explain such matters, and cannot agree on what are the causes or what will be the effects of particular events. The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design. To the naive mind that can conceive of order only as the product of deliberate arrangement, it may seem absurd that in complex conditions order, and adaptation to the unknown, can be achieved more effectively by decentralizing decisions and that a division of authority will actually extend the possibility of overall order. Yet that decentralization actually leads to more information being taken into account."

"If craftsmen and blacksmiths were feared for transforming material substance, if traders were feared for transforming such intangible qualities as value, how much more will the banker be feared for the transformations he effects with the most abstract and immaterial of all economic institutions? Thus we reach the climax of the progressive replacement of the perceivable and concrete by abstract concepts shaping rules guiding activity: money and its institutions seem to be beyond the boundary of laudable and understandable physical efforts of creation, in a realm where the comprehension of the concrete ceases and incomprehensible abstractions rule."

"The most important player on Ronald Reagan's economic team is Ronald Reagan. The person most responsible for creating the economic program that came to be known as Reaganomics is Reagan himself. For over twenty years he observed the American economy, read and studied the writings of some of the best economists in the world, including the giants of the free market economy — Ludwig von Mises, Friedrich Hayek and Milton Friedman — and he spoke and wrote on the economy, going through the rigorous mental discipline of explaining his thoughts to others. Over the years he made all the key decisions on the economic strategies he finally embraced. He always felt comfortable with his knowledge of the field and he was in command all the way."

"At Chicago, Hayek put aside his more technical economic work for the development of a social and political theory that became in time the most ambitious and complete synthesis to emerge from the ranks of the post-war Right. Among its themes — the overriding significance of the rule of law, the need for social inequality, the function of unreflective tradition, the value of a leisured class — were many cultivated by Strauss across the campus. Neither thinker, however, ever referred to the other. Did temperamental antagonism, or intellectual indifference, dictate the silence? Whatever the case, latent tensions of outlook between them were to find expression in due course. Schmitt, on the other hand, was never far from Hayek's mind – standing for the prime example of a skilled jurist whose sophistry helped to destroy the rule of law in Germany, yet a political theorist whose stark definitions of the nature of sovereignty and the logic of party, at any rate, had to be accepted."

"Oakeshott, whose technical theory afforded no space for the nation-state, since collective solidarity was not a principle of civil association, had – as might be expected – nothing to say about the problems of a supra-national one. Asked his view of Britain’s entry into the EEC in the early sixties, Noel Annan reports, he replied: 'I do not find it necessary to hold opinions on such matters.' Hayek, on the other hand, held firm and far-seeing ones. As early as 1939, he argued in his prophetic essay "The Economic Conditions of Inter-State Federalism" that transcendence of national sovereignty in a supra-national framework should be of natural advantage to a free economy, since the higher the plane on which its structural parameters were set – that is, the remoter from local faction and interest – the more insulated they would be from popular passion. In other words: the less immediately democratic the machinery of decision, the safer it was likely to be for the reproduction of capital. Of course, this was less a logical deduction than an empirical wager – that the task of constructing a supra-national popular sovereignty, capable of determining the social path of a supra-national economy, would prove impossible. That calculation has yet to be confounded, as the terms of union agreed at Maastricht – a central monetary authority for Europe, without any commensurate elected assembly – show."

"There was from the beginning a third vision of what European integration should mean, distinct from either federalist or inter-governmentalist conceptions of the Community. Its far-sighted theorist was Hayek, who even before the Second World War had envisaged a constitutional structure raised sufficiently high above the nations composing it to exclude the danger of any popular sovereignty below impinging on it. In the nation-state, electorates were perpetually subject to dirigiste and redistributive temptations, encroaching on the rights of property in the name of democracy. But once heterogeneous populations were assembled in an inter-state federation, as he called it, they would not be able to re-create the united will that was prone to such ruinous interventions. Under an impartial authority, beyond the reach of political ignorance or envy, the spontaneous order of a market economy could finally unfold without interference [...] With the abrupt deterioration in the global economic climate in the 1970s, and the general neo-liberal turn that followed in the 1980s, Hayekian doctrine was rediscovered throughout the West. The leading edge of the change came in the UK and US, with the arrival of Thatcher and Reagan. Continental Europe never produced comparably radical regimes, but the ideological atmosphere shifted steadily in the same direction. The collapse of the Soviet bloc sealed the transformation of working assumptions. By the 1990s, the Commission was openly committed to privatisation as a principle, pressed without embarrassment on candidate countries along with other democratic niceties. Its most powerful arm had become the Competition Directorate, striking out at public sector monopolies in Western and Eastern Europe alike. In Frankfurt the Central Bank conformed perfectly with Hayek’s prewar prescriptions. What was originally the least prominent strand in the weave of European integration had become the dominant pattern. Federalism stymied, inter-governmentalism corroded, what had emerged was neither the rudiments of a European democracy controlled by its citizens, nor the formation of a European directory guided by its powers, but a vast zone of increasingly unbound market exchange, much closer to a European ‘catallaxy’ as Hayek had conceived it."

"[Estonian Prime Minister] Mart Laar came to my office the other day to recount his country's remarkable transformation. He described a nation of people wh are harder-working, more virtuous — yes, more virtuous, because the market punishes immorality — and more hopeful about the future than they've ever been in their history. I asked Mr. Laar where his government got the idea for these reforms. Do you know what he replied? He said, "We read Milton Friedman and F. A. Hayek"."

"Yes. I read that paper carefully a few years ago and think it is incoherent because he stresses the idea people can only know their local thing. He doesn’t ever answer why the system’s price conveys the correct global information. In the Walras/Pareto story you do wind up with the correct information—subject to the appropriate assumptions—but Hayek doesn’t like that story. There are cases in game theory where local connections can actually cause a faster diffusion of ideas, and a faster convergence to Nash equilibrium than reactions to the population as a whole, but that’s not in Hayek."

"People sometimes say that they don’t know what they think until they’ve said it, you know. But mind you, even as a graduate student, I’ve never thought that utility theory implies consciousness. Of course you discover things and learn about your own preferences. This is a point that I haven’t explored and that I probably should study more. It seems especially important from the point of view of innovation. By the way, what has always bothered me about Hayek is that all this local knowledge has to be transmitted before the process of social interaction can generate any new knowledge, but he doesn’t show us how that is going to happen."

"Right after we published our first findings, we started getting letters from all over the country saying, "You know, all you guys have done is rediscover Austrian economics" … I admit I wasn't familiar with Hayek and von Mises as the time. But now that I've read them, I can see that this is essentially true."

"As the title of his 1941 book indicates, the theory of capital lay at the heart of his theory of the cycle. The reason is that he attributes the cycle not to changes in aggregate demand, or even to changes in the quantity of capital, but to changes in the structure of production and hence the structure of the capital stock. In this, his theory was highly unusual: one of the reasons for his failure to engage more effectively with Keynes was the latter’s inability to see how the theory of capital could be of any importance for the cycle. Because the theory of capital is so central, and because it is so complex, it needs to be explained carefully. After that, the rest of his theory falls into place comparatively easily."

"F. A. Hayek, probably the most prominent advocate of capitalism in the present period would not quite agree with Smith's notions of what is natural, but his defense of capitalism is indirect by reference to its linkage with liberty, and he explicitly rejected the idea that a legitimating concept of justice is relevant to the operations of a market system."

"It may not be amiss to seen in my calculations of comparative productivity [between entrepreneurial economics and communist economies] verification of a prescient forecast [made by Hayek in 1935 in his essay "The Present State of the Debate".]."

"There were many Hayeks: Hayek, the political scientist; Hayek, the economist; Hayek, the philosopher of social science; Hayek, the psychologist. Even in these different roles, he played many parts."

"Why did his interest in the concept of spontaneous order and the history of the doctrine of unintended social consequences undergo very little development after the 1960s? All of his political writings are in fact amazingly repetitious, exploring a small number of big themes which, however, are not further refined or extended in new contexts. As organizing concepts, they held, I am convinced, enormous potentialities but nevertheless Hayek himself failed to realize them."

"Hayek’s research programme is grounded in the teaching of Adam Smith and Carl Menger, who sought to understand social order not as the result of conscious design, but as the unintended consequences of individual human action. In addition to the emphasis on spontaneous order, Hayek learned from Menger that individual human action is guided by the subjective valuations of individuals, and that the relevant valuation that individuals make is on the marginal unit of the good or service that is the object of deliberation. Throughout Hayek’s career the puzzle of how a social system can transform the individual subjective perceptions of some into useful information for others so they may co-ordinate their actions to produce an overall social order which yields benefits far greater than any individual in the system intended was at the centre of his research efforts."

"Hayek’s reasons for holding that planning cannot work are not limited to the problem that the information required for the task of coordinating the plans of a multitude of individuals is too vast to organize effectively. The knowledge utilized within the market by entrepreneurs does not exist outside that local context and thus cannot even be organized in principle. It is not that planners would face a complex computational task; it is that they face an impossible task, because the knowledge required is not accessible to them no matter what technological developments may come along to ease the computational burden."

"I did not call him "Fritz." To me he remained always "Professor Hayek," despite his own graciousness in treating me as a peer. I shall not attempt to evaluate Professor Hayek's monumental contribution to our understanding of the events of this turbulent century, to the influence of his ideas on these events themselves or even to the development of economic theory in a strictly scientific sense."

"In some of their implicit modeling of political behavior aimed at furthering special group or class interests, the Marxists seemed to be closet associates of public choice, even as they rejected methodological individualism. But how was the basic Marxist critique of politics, as observed, to be transformed into the idealized politics of the benevolent and omniscient superstate? This question was simply left glaringly unanswered. And the debates of the 1930s were considered by confused economists of the time to have been won by the socialists rather than by their opponents, Ludwig von Mises and Friedrich Hayek. Both sides, to an extent, neglected the relevance of incentives in motivating human action, including political action."

"I did fully learn from Hayek the distinction between what I later called moral community and moral order and moral anarchy – this is about the sense that our genetic predisposition is all for the insider tribe."

"An essential difference between Hayek and Friedman here was that Hayek was in many ways a dark thinker. If you read Hayek in the 1930s and 1940s, the thinks the world is coming apart. Certainly Hayek's response to the Great Depression was not one that imbued with a great deal of optimism. He thought that to a certain extent you just have to wait things out; if you try to intervene to solve the problem you'll only exacerbate it. Whereas Friedman was this tremendous optimist. Friedman was always emphasizing--he said that what Hayek and Robbins got wrong when they were responding to the Great Depression was precisely that: that they said you shouldn't do anything. He thought that part of what he was doing in monetary theory was to try to come up with a way to say that there was a solution, something that could be done that would prevent this kind of problem. A kind of counternarrative to Keynes. And he always emphasized--instead of dwelling on the catastrophic situation that the world was in, he always emphasized the ways in which those catastrophes could be solved by the market. And so when you reach this moment of deep pessimism that I think a lot of people associated with organizations like the Tea Party felt, Hayek in many ways feels more consonant with that set of views."

"Hayek was no opponent of theory; indeed, he frequently defended it from its historicist detractors. But he also understood the limitations of theory."

"I grant that there is one big defect in the neoclassical approach to imperfect knowledge. But it is a defect that Austrians almost never mention! The problem: Do the probabilities that people assign fit the facts? At least as researchers, most economists assume that beliefs about the world are on average correct. But empirically, this is often not so. Flying is much safer statistically than driving, but many people refuse to accept the fact. A large field known as behavioral economics documents such biases. Or to take more policy-relevant beliefs: Basic economics shows us the benefits of free trade, but few non-economists recognize them. I have a series of papers on systematically biased beliefs about economics that explores this topic. Now what is Prof. Boettke going to tell you? I suspect that he is going to say that merely focusing on people’s erroneous beliefs “makes me an Austrian." I call this the “Hayek said the sky is blue" tactic. If you say the sky is blue, that makes you an Austrian because Hayek defended the sky-is-blue thesis back in the 30s. Hayek talked a bit about mistaken beliefs; therefore anyone who ventures within a thousand intellectual miles of this topic is a “Hayekian.” This is ridiculous. By this standard not only does Hayek get credit for ideas that he did not anticipate; he gets credit for ideas that preceded his birth! Hayek made some contributions here - though frankly he was very repetitious. But he did little to advance modern rational expectations theorizing, and even less to anticipate its empirical weaknesses. Would I have done any better? Probably not, but if I hadn’t done a lot more I wouldn’t want my posthumous admirers showering me with undeserved credit. (Well, maybe I would, but I wouldn’t deserve it)."

"I've long since lost all patience with Hayek. His original, true ideas could have been five good blog posts, his errors and bizarre obsessions are numerous, and his writing style insults every person who ever tried to write a decent sentence."

"In fact, a large part of what we think of as economic activity is designed to accomplish what high transaction costs would otherwise prevent or to reduce transaction costs so that individuals can negotiate freely and we can take advantage of that diffused knowledge of which Friedrich Hayek has told us."

"I will be discussing what happened in economics in England, but these were times when, to a very considerable extent, this was what happened in economics. The first episode I will discuss is local, but the economists involved were among the best in the world. In February 1931, Friedrich Hayek gave a series of public lectures entitled 'Prices and Production' at the London School of Economics … They were undoubtably the most successful set of public lectures given at LSE during my time there, even surpassing the brilliant lectures Jacob Viner gave on international trade theory. The audience, notwithstanding the difficulties of understanding Hayek, was enthralled. What was said seemed to us of great importance and made us see things of which we had previously been unaware. After hearing these lectures, we knew why there was a depression. Most students of economics at LSE and many members of the staff became Hayekians or, at any rate, incorporated elements of Hayek's approach in their own thinking. With the arrogance of youth, I myself expounded the Hayekian analysis to the faculty and students at Columbia University in the fall of 1931."

"For all his brilliance, Hayek didn’t — at the critical time — have a good enough understanding of the dangers of deflation. He didn’t fully realize the extent of sticky wages and prices and, more deeply, he didn’t see that ongoing deflation would render the “calculation problem” of a market economy more difficult. Hayek stressed that a market calculates value in a way that a central planner cannot — but lying behind this ability to calculate is some basic macroeconomic stability. At the key moments, Hayek did not offer the proper recipe for that stability."

"The basic problem is that there are three Hayeks:the--absolutely brilliant--price-system-as-information-aggregator Hayek. the--absolutely bonkers--business-cycle "liquidationist" Hayek. the--absolutely wrong--social-democracy-is-evil Hayek.The first was a genius. The second was a moron--his could never make his arguments cohere either conceptually or empirically, but he kept doubling down on them and wound up in infinite reputational bankruptcy. The third was wrong--I would say blinded ex ante by ideology, others would say proved wrong ex post by events.The problem is that the modern-day Hayekians are by-and-large uninterested in the good Hayek (1), and interested only in the bad Hayeks (2) and (3)..."

"Hayek says that the problem with classical liberalism was that it was not pure enough. The government needed to restrict itself to establishing the rule of law and to using antitrust to break up monopolies. It was the overreach of the government beyond those limits, via central banking and social democracy, that caused all the trouble. A democratic government needs to limit itself to rule of law and antitrust–and perhaps soup kitchens and shelters. And what if democracy turns out not to produce a government that limits itself to those activities? Then, Hayek says, so much the worse for democracy. A Pinochet is then called for to, in a Lykourgan moment, minimalize the state. After social democracy has been leveled and the rubble cleared away, then–perhaps–a limited range of issues can be discussed and debated by a–limited–restored democracy, with some kind of group of right-wing army officers descended from latifundistas Council of Guardians in the background to ensure that property remains sacred and protected, and the government small enough to fit in a bathtub. […] Hayek was formed in Austria. From his perspective the property and enterprise respecting Imperial Habsburg government of Franz Josef eager to make no waves, to hold what it has, and to keep the lid off the pressure cooker appears not unattractive. This is especially so when you contrasted would be really existing authoritarian alternatives: anti-Semitic populist demagogue mayors of Vienna; nationalist Serbian or Croatian politicians interested in maintaining popular legitimacy by waging class war or ethnic war; separatists who seek independence and then one man, one vote, one time. An “authoritarian” after the manner of Franz Josef looks quite attractive in this context–and if you convince yourself but they are as dedicated to small government neoliberalism as you are, and that the Lykourgan moment of the form will be followed by soft rule and popular assent, so much the better. And if the popular assent is not forthcoming? Then Hayek can blame the socialists, and say it is their fault for not understanding how good a deal they are offered."

"Hayek and Marx are similar in their research programs concerning the dynamics of capitalism, its cycles, and the way in which money is vital to capitalism. They both worked a long time to master the problem, but failed to arrive at a neat solution. Hence they both abandoned the program and went on to other, more urgent, concerns. But along the way, they both left a trail of great insights and unsettled debates."

"The human mind, Hayek says, is not just limited in its ability to synthesize a vast array of concrete facts, it is also limited in its ability to give a deductively sound ground to ethics. Here is where the tension develops, for he also wants to give a reasoned moral defense of the free market. He is an intellectual skeptic who wants to give political philosophy a secure intellectual foundation. It is thus not too surprising that what results is confused and contradictory."

"Hayek gave the best exposition ever of the unpopular ideas of economic freedom that somehow triumph anyway, alleviating far more national and global poverty than more fashionable Scandinavia-envy and grandiose plans to "make poverty history.""

"Hayek did not talk about it at the time, but his warnings about the drift toward top-down planning were perhaps most relevant of all in the so-called Third World. It is the misfortune of the field called development economics that it was born at the moment of maximum doubt about individual liberty. As a result, economists conceived of development from the beginning—and to a frightening extent still do today—as a top-down process run by development experts operating on a blank slate."

"Nor does his book offer any real historical setting for Hayek's career. Although often naive in his political judgments, Hayek was intensely concerned with public issues throughout his life. Yet we learn virtually nothing of the development of his views on the affairs of the day. What did he make, for example, of the Dollfuss dictatorship in Austria, where his teacher Ludwig von Mises served its clerical predecessor under Monsignor Seipel, and where Hayek himself planned to return in the 1930s? Mr Ebenstein never even mentions these conservative authoritarian regimes of the period. In later years, he records Hayek's efforts to secure South Tyrol for Austria once again; his organisation of the Mont Pelerin Society, an influential post-war group of free-market intellectuals; his recommendation that West Germany, France and Britain sue for entry as states into the United States; his reception in Verwoerd's South Africa and his admiration for General Pinochet's achievements in Chile; his wish that Iran be bombed in 1979 and Argentina in 1982. Homages from Barry Goldwater, Margaret Thatcher, Ronald Reagan and Yegor Gaidar roll past (the only discordant note comes from Ayn Rand, once Alan Greenspan's muse: "As an example of our most pernicious enemy, I would name Hayek. That one is real poison."; or again: "The kind who do more good to the communist cause than ours"). Yet no coherent picture of Hayek's political commitments ever emerges, still less their relation to such important works as “The Constitution of Liberty” (1960)."

"The great theme of his remarkable explorations in intellectual history is the danger of all constructivism, the belief that we can deliberately design social arrangements which will be better than those we unwittingly hit upon. Paradoxically, however, the drive of Hayek's own work is itself characteristically that of a rationalist construction. Admiring David Hume and detesting Auguste Comte, his genius was to marry the sceptical insights of the one to more than a touch of the compulsive rigour of the other."

"The investigation of this problem — How is spontaneous order possible? — is sometimes referred to as the 'Hayek programme'."

"I think that permanence and stability are the cardinal virtues of the legal rules that make private innovation and public progress possible. To my mind there is no doubt that a legal regime that embraced private property and freedom of contract is the only one that in practice can offer that permanence and stability … In reaching this conclusion, I have been heavily influenced by the work of Friedrich Hayek."

"Though Hayek clearly allows for the possibility of a retreat from socialism, whether of the hot (command planning) or cold (welfare state) variety, and planning, Hayek’s critics, apparently taking Hayek at his word, use 'inevitability' to refer to the outcome (a totalitarian polity) that, according to Hayek, is supposedly generated by the cumulative logic inherent to interventionist policy and welfare state practices. Though taking care to note that a change in policy may occur, Hayek apparently considers the logic of intervention as primarily nudging policy in one direction, necessitating ever-further government intervention."

"Hayek frequently argued that any failure to adequately mend our ways—abandon “our” supposed infatuation with “social justice” and other “high ideals”—would inexorably put us in the hands of the devil. Arguably, “we”—Obama and company clearly included—have yet to change our ways."

"Much as Hayek’s penchant for claiming that "bad" interventionist policy will ineluctably drive us along the road to serfdom—ultimately culminating in full-blown command planning and political tyranny— is clearly apparent in his 1940s writings, the very same sentiments pervade the third part of The Constitution of Liberty."

"Hayek was never blind to the potential difficulties inherent in this political synthesis, nor dismissive of the serious criticisms of capitalist society and liberal theory presented by thinkers of the left. He explicitly disavowed the ideal of laissez faire and distanced himself from the sort of free market utopianism common among more extreme libertarians. He thought it foolish to pretend that capitalism always rewards those who work the hardest or are otherwise deserving, advocated a minimal social safety net for those incapable of supporting themselves in the market, and had no objection to government taking on tasks far beyond those defining the "minimal state" of Nozick’s libertarianism, so long as this did not result in monopoly and private firms were allowed to compete with government for provision of the services in question. Like Marx, he believed that liberal capitalist society has a tendency to produce alienation, insofar as the impersonal rules of conduct upon which it rests necessarily eschew any reference to a common social end or purpose, and thus cannot satisfy the deepest human yearnings for solidarity. Unlike Marx, he also thought we nevertheless simply have no alternative to capitalism if we want to maintain the level of individual autonomy and material prosperity that are the most prized characteristics of modernity, and that it is naive and dangerous to pretend otherwise."

"What of Ronald Reagan and Margaret Thatcher and their battles against government control of the economy? Here Hayek surprises. He does not disapprove of Reagan and Thatcher, but he has no high opinion of modem politicians in general. He does, however, say that Reagan's and Thatcher's policies "are as reasonable as we can expect at this time. They are modest in their ambitions." Modesty. The capacity to understand that well-meaning politicians — and their advisers, the intellectuals — will only wreak mischief if they try to guide economic development: This antipolitical concept is at the heart of Hayek's theory of economic and social development."

"There was someone who is clearly very important who also was not a member of the scientific commission, but whose career and trajectory was ultimately very important for the definition of contemporary neo-liberalism. This is the Austrian von Hayek. He came from Austria and from neo-liberalism; he emigrated at the time of, or just before, the Anschluss. He went to England and also to the United States. He was very clearly one of the inspirations of contemporary American liberalism, or of American anarcho-capitalism if you like, and he returned to Germany in 1962 where he was appointed professor at Freiburg, thus closing the circle."

"I’ve always thought, incidentally, that many of us should welcome the fact that...a particular policy idea we hold does have this adverse effect on the opinions of other people. I think this is a very good thing, because it means that those of us who hold our views have to be better to get recognized than people who hold the other views. And in the long run, what matters is the quality of people who propose the ideas and not their number and not their position. It is because it is the quality of these ideas that matters so much that Hayek’s ideas have been so wide-spread and have had such an influence, and that you are now seeing the rise in the scientific as well as in the other parts of the world of more people of this particular kind of persuasion.... ... I am one of those who has learned a great deal from Hayek. I hope he is as effective as I think he will be in his teaching in Germany, but I also hope that we will see him back here very often indeed."

"Friedrich Hayek's influence has been tremendous. His work is incorporated in the body of technical economic theory; has had a major influence on economic history, political philosophy and political science; has affected students of the law, of scientific methodology, and even of psychology."

"Over the years, I have again and again asked fellow believers in a free society how they managed to escape the contagion of their collectivist intellectual environment. No name has been mentioned more often as the source of enlightenment and understanding than Friedrich Hayek's … I, like the others, owe him a great debt … his powerful mind … his lucid and always principled exposition have helped to broaden and deepen my understanding of the meaning and the requisites of a free society."

"In terms of his personal characteristics, Hayek was a very complicated personality. He was by no means a simple person. He was very outgoing in one sense but at the same time very private. He did not like criticism, but he never showed that he didn’t like criticism. His attitude under criticism, as I found, was to say: "Well, that’s a very interesting thing. At the moment, I’m busy, but I’ll write to you about it more later." And then he never would! On the other hand, he wasn’t like von Mises. He wasn’t intolerant at all. You cannot conceive of Hayek doing the kind of thing that Mises did, when, for example, he wouldn’t talk to Machlup for three years because Machlup had come out for floating exchange rates at a Mont Pelerin meeting. Hayek did not do that. That was, I believe, because of the influence of the London School on him. He was very much tempered by the London School."

"Let me emphasize. I am an enormous admirer of Hayek, but not for his economics. That, again, is subject to misunderstanding. It depends on what you mean by economics. I’m not talking about his understanding of economics, his application of economics to the real world, or anything like that, but his contributions to the science of economics, not to economic practice, not to anything else. I think Prices and Production was a very flawed book. I think his capital theory book is unreadable. I cannot say I’ve read it. [laughter] It’s very unreadable. On the other hand, The Road to Serfdom is one of the great books of our time. His writings in [political theory] are magnificent, and I have nothing but great admiration for them. I really believe that he found his right vocation—his right specialization—with The Road to Serfdom. His earlier works were intended to be part of the literature of technical economics as a science, and, indeed, it was that characteristic of them that impressed Lionel Robbins and led Lionel to bring him from Austria to London. I never could understand why they were so impressed [at the London School of Economics] with the lectures that ended up as Prices and Production, and I still can’t.... these very confused notions of periods of production, different orders of products, and so on."

"There is no figure who had more of an influence, no person had more of an influence on the intellectuals behind the Iron Curtain than Friedrich Hayek. His books were translated and published by the underground and black market editions, read widely, and undoubtedly influenced the climate of opinion that ultimately brought about the collapse of the Soviet Union."

"The [seminar in economic theory conducted by Hayek at the L.S.E. in the 1930s] was attended, it came to seem, by all of the economists of my generation — Nicky [Kaldor], Thomas Balogh, L. K. Jah, Paul Rosenstein-Rodan, the list could be indefinitely extended. The urge to participate (and correct Hayek) was ruthlessly competitive."

"Sixty-two years ago I spent a year in what is known at Harvard as the other Cambridge. It was then in the high pulse of the Keynesian Revolution. Economic discussion was constant, intense, but London also called; once a week I came up to seminars here at the London School of Economics. A major attraction was Friedrich von Hayek, the noted conservative, author of A Road to Serfdom, his widely read analysis of the disastrous but emerging welfare state. He, however, was only slightly heard. The two hours were given over, all but exclusively, to telling him he was wrong. I found myself in support of this correction; it was education by the rebuke of error. (I trust that will not be the tendency on this pleasant and, for me, nostalgic occasion.) Over the years I’ve often presented myself to ardent conservatives as a student of von Hayek; it has added in an agreeable way to their normal confusion."

"Hayek's greatest failure is his neglect of the problem of private power. All his efforts go into the denunciation of state power, but he has little to say about private coercion."

"Hayek's attempt to delegitimize one side of the Western tradition is one of the most significant ideological closures in his work. It prevents him from seeing the close ties which exist between liberalism and socialism."

"Hayek’s lasting achievement was to focus attention on the limited and fragmented nature of knowledge in modern societies and the need for social and economic theorists to make that the cornerstone of their thinking. Yet in some ways he remained trapped in the rationalism he was so keen to reject. If our reason is so feeble, and if knowledge is necessarily imperfect and dispersed, how do we know this to be true? To make that claim Hayek has to take up the privileged status of observer that he is so critical of in constructivist rationalism. If he were not prepared to do so he could not justify his project of social and economic theory at all. Despite his denunciation of the ills of scientism and constructivism, Hayek is closer to the rationalism he criticizes than he might like to acknowledge."

"Hayek was an acute social theorist, but also an ideologue. He developed one of the most sophisticated theories of markets in social science, but he was also a market fundamentalist with a deep-rooted distrust of all forms of state regulation and state intervention, which tended to become more pronounced as he grew older. […] The paradox of Hayek's work however is that he stopped short of advocating either the kind of anarcho capitalism sought by some libertarians, or even the strict minimal state proposed by Robert Nozick. On the contrary he thought that the state needed to retain very strong powers to police the market order and prevent powerful interest groups such as trade unions from subverting it. But he fretted constantly about how this might be achieved, and how democratic governments could be persuaded to cease interfering with markets."

"Hayek's theory of knowledge is his greatest achievement, and offers insights that should be utilised by both right and left, but he failed to apply them to one of the central aspects of the modern era - the way science and technology are utilised in increasingly perverse ways by a deregulated neo-liberal market economy, which if not checked will have devastating consequences for the biosphere and the survival of the human species. It is an example of how his market fundamentalism blinds him to conclusions to which his own analysis of markets should have led him. If he had followed the logic of his own argument, he might have arrived at a rather different view of the appropriate balance between the state and the market, and provided a more searching account of the nature and limits of government action, or as Keynes would have put it, between the agenda and the non-agenda of government. The resources for doing so are there within Hayek's thought, which remains a seminal contribution to modern social theory, but he chose not to develop his ideas in this direction because of his ideological commitment to market fundamentalism. That should not prevent others from doing so. It is increasingly urgent that we should."

"Friedrich A. von Hayek, one of the strongest, and at times one of the few, economic voices advocating the reduction of government's role in the economy, is finally finding himself in the position of a Cassandra who suddenly that discovers people are listening."

"Hayek's work composes a system of ideas, fully as ambitious as the systems of Mill and Marx, but far less vulnerable to criticism than theirs because it is grounded on a philosophically defensible view of the scope and limits of human reason."

"No-one who knows Hayek's work can doubt that his attempt to restate liberal principles in a form appropriate to the circumstances and temper of the twentieth century has yielded a body of insights wholly comparable in profundity and power with those of his forebears in the classical liberal tradition."

"Conservative ideologues have used Smith's insight--that market exchange produces an order in human affairs that no one has designed--to defend their free-market policies. Chief among them was F.A. Hayek, the Nobel Prize-winning Austrian economist who became one of the gurus of the intellectual right in the '80s. Hayek argued that the market evolves as an unintended consequence of human activity, claiming that it embodies wisdom inaccessible to any single generation and insisting that it must therefore be accepted as the basis of society. In a devastating critique of Hayek's views, Rothschild dissects the multiple ambiguities of his notion of social order and shows how removed it is from anything in Smith. Hayek believed that we must submit to the unfathomable workings of the market, but this blinkered reverence for social process was unacceptable to Smith, who viewed the market as a human construction."

"I still see Hayek as the best critic of all forms of centralized economic planning. It is to his merit to have shown scientifically that centralized planning cannot work for an economy because complete knowledge of that economy is never available centrally. As nice as it would be to have one, there is no mastermind who knows and can control everything, and there never will be. This was Hayek's scientific argument for the superiority of the market economy. A planned economy is only a viable means where there is a clear overarching goal – during wartime. A war economy is always a planned economy. Supporters of central economic dreams should therefore hear it once and for all: centralized economic planning is not suitable during peacetime."

"He who states that markets cannot fail, that market failure is always the result of government intervention, is a dogmatist. How the hell would he know? Overall, Hayek was not a dogmatist, although in his writings there can be found traces of such a liberal utopianism. There we encounter the motto: "What is not supposed to be, must not be! And what must not be, is not!" To me, all isms are suspicious anyway. The sceptic in me asks: why should markets be more reasonable than other human institutions? And we can see it every day: markets are also imperfect, prone to error, and in need of repair, like everything else that man has created."

"Hayek watched the interwar collapse with horror, as Keynes did, and shared many of Keynes’s liberal values. What he failed to understand is that these values cannot be renewed by applying any formula or doctrine, or by trying to construct an ideal liberal regime in which freedom is insulated from the contingencies of politics."

"Hayek’s Road to Serfdom (1944), also written during the war, was too pessimistic, I believe, about the capability of present-day capitalism in most Western countries to adjust to maladjustments in the structure of production without causing intolerable unemployment. Excessive pessimism also appears in Hayek’s later writings. In Full Employment at Any Price? (1975), for example, he refers to the inflationary excesses of the 1970s as “the present crisis,” I do not wish to minimize the dangers of inflation. However, the experience of the 1980s bothin the United States and Europe shows that inflation can be stopped without producing more than relatively mild recessions."

"At the time of his death, F.A. Hayek (1899–1992) was unquestionably the world’s preeminent spokesman for classical liberalism and its most important thinker. He led an immensely productive life, over the course of which he made significant contributions to a variety of disciplines, among them economics, political and social theory, psychology, and the history of ideas."

"There were two explanations, and one is that in Hayek and Friedman you had an absolutely marvelous cast—two people, one very bouncy and saucy and cheeky and outspoken, vigorous. This is Friedman. He was always bouncing out with ideas; sometimes they were a bit farfetched. Then you had Hayek, this very correct and rather serious, portly, gracious, slow, rather ponderous-speaking, sometimes thinking what his next sentence is going to be. And they were men unruled by any ambition, not trying to create a party, to get elected, to win votes—any of that. It was an amazing success of upright men of integrity, intellectual brilliance, not flashy, but very impressive to watch them performing over a wide range of topics."

"It was from Hayek that I began."

"Hayek was making us think of the productive process as a process in time, inputs coming before outputs."

"I did not begin from Keynes: I began from Pareto, and Hayek (footnote 10: There is evidence for this, in the paper 'Equilibrium and the Cycle')"

"If Hayek believes that the spending of newly-printed currency on employment and consumption will worsen our current terrible depression, then Hayek is a nut."

"The book, as it stands, seems to me to be one of the most frightful muddles I have ever read, with scarcely a sound proposition in it beginning with page 45, and yet it remains a book of some interest, which is likely to leave its mark on the mind of the reader. It is an extraordinary example of how, starting with a mistake, a remorseless logician can end up in bedlam."

"I am in full agreement, also, with Dr. Hayek's rebuttal of John Stuart Mill's well-known dictum that "there cannot, in short, be intrinsically a more insignificant thing, in the economy of society, than money," which he expresses admirably in the following passage from his last lecture: "it means also that the task of monetary theory is a much wider one than is commonly assumed; that its task is nothing less than to cover a second time the whole field which is treated by pure theory under the assumption of barter, and to investigate what changes in the conclusions of pure theory are made necessary by the introduction of indirect exchange. The first step towards a solution of this problem is to release monetary theory from the bonds which a too narrow conception of its task has created.""

"Hayek's mature appreciation of a society built on the foundations of individual rights, the rule of law, and limited government can thus be traced directly to his own extension of the subjectivism of the Austrian tradition in economics. It must be emphasized that the economic understanding of markets which emerges from the Austrian tradition differs sharply from the understanding of markets which informs the minimal-statist position of many mainstream economists."

"I was 25 years old and pursuing my doctorate in economics when I was allowed to spend six months of post-graduate studies in Naples, Italy. I read the Western economic textbooks and also the more general work of people like Hayek. By the time I returned to Czechoslovakia, I had an understanding of the principles of the market. In 1968, I was glad at the political liberalism of the Dubcek Prague Spring, but was very critical of the Third Way they pursued in economics."

"Hayek was one of the most significant intellectuals of the twentieth century, but though he was extremely important for people in Western countries, he was not sufficiently appreciated and recognized there. I remember being in "his" Austria in November 1989, one day before the Velvet Revolution in my country, and hearing at the University of Linz that "Hayek is dead in Austria." I reacted by saying that we would bring him back to life in Prague again. I dare argue that Hayek was more important for us in the East than for people in the West. Westerners did see a real danger in Communism, but did not see that they were beginning the path down their own Hayekian "slippery road." They often considered his views overplayed and exaggerated. For us, Hayek was our guru, our teacher, our lighthouse, our compass in the depressing era of Communism. It was easier for Hayek to capture our hearts... Two decades after Hayek´s death history is on the move again. State interventionism is back and growing, the Reagan-Thatcher era long forgotten, as is the Communist era. State paternalism, regulation and control, social and environmental blocking of the functioning of markets, constructivism and dirigism are here again and, especially in Europe, are stronger than ever. We must get back to Hayek’s teachings. We must once again take his books into our hands and try to spread his thoughts all over the world, because now they are as relevant as in the past."

"Hayek’s quarrels with Aristotle are of the same character as his conversations with Sir Karl Popper and Milton Friedman: the welcome criticism of peers, those who can recognise the same premisses needed to define a given problem, however they may come to differ over their conclusions. Only now do we begin to realise that something valuable may have been driven from the world when the continuity and tradition of Western civilisation was shattered in the same blows that destroyed unwanted empires. Now in Eastern Europe there is nostalgic talk of the good old days under the Hapsburg empire. The evolution of knowledge is inseparable from the evolution of language, and something invaluable is lost when 'sound bytes' replace the human voice, heard in face-to-face discussion of mutual concerns. Inflection counts for much, and what is not said can only be recognised when allusion and irony are possible. So Vienna waltzes."

"The most intelligent defender of capitalism today … who has as fine and as powerful a mind as is to be found anywhere."

"As a result of the efforts of Hayek, Friedman, and the many others who share their general outlook, the idea of a centrally planned and centrally administered economy, so popular in the 1930s and early 1940s, has been discredited."

"Hayek has as fine and as powerful a mind as is to be found anywhere, and [his] Constitution of Liberty is one of the most thoughtful works of the last decades."

"It is in good part because of Professor Hayek's work [on the topic of social engineering], and also because of his profound insights — most notably in The Constitution of Liberty — into the connection between a free market, the rule of law, and individual liberty, that you don't hear professors saying today, as they used so glibly to say, that 'we are all socialists now."

"But the Hayek thing is almost entirely about politics rather than economics. Without The Road To Serfdom — and the way that book was used by vested interests to oppose the welfare state — nobody would be talking about his business cycle ideas."

"Marxist theory and over-capitalisation theories overlap. The true heir to this theory is an arch-conservative, von Hayek, who paradoxically and honestly recognised Marx's paternity... The essential point is not to be found in von Hayek's conservative conclusions, but in his analysis of the causes of the boom and depression, which, as he himself admits, strongly resembles the Marxian one."

"The central dilemma of Hayek's political philosophy is, given his view of the limited role reason can play in social life, how is it possible to mount a systematic defence of liberalism without falling victim to the very kinds of rationalism he criticises? This difficulty stays unresolved in Hayek’s political thought because it is informed by two incompatible assumptions about what reason can achieve."

"This tension in Hayek's thought, between the rationalist advocacy of liberal reform and the anti-rationalist critique of all social reconstruction, has inclined one commentator to describe his political theory as 'Utopian non-engineering'. While the word 'Utopian' might exaggerate a little the rationalist character of his thought, this term captures well the unstable nature of the Hayekian system of ideas. For, in the end, a Humean scepticism about the powers of reason is incompatible with a Kantian insistence on the priority of rationally justifiable principles. Hayek has tried to cast himself in the image of that most improbable of creatures: the principled sceptic."

"Hayek’s views should be considered because, in addressing institutional questions, he has not made the mistake of confining the problems of liberalism within national boundaries."

"Hayek should be taken seriously because he has correctly identified as the most serious problems confronting civilization in the twentieth century the problems of nationalism and totalitarianism. Even with the dereliction of European communism at the end of the twentieth century, the problems which remain or are reemerging in the shape of ethnic conflict, separatist national movements, and regional trading blocs stem from practices and ideas which the liberal tradition has consistently criticized: ideas hostile to individualist, universalist, and egalitarian moral principles. While thinkers like Hannah Arendt have also recognized the threat and moral danger posed by totalitarianism, it is in Hayek’s work that we have the most thorough attempt to understand the logic of its institutional alternative."

"Roughly speaking, Lundberg argued that Gunnar Myrdal's work has been enormously important, and noted that there was local pressure on the Nobel Prize Committee to recognize him, but wondered how it would be received abroad if this was done. (Remember that the Prize was then rather new, and Lundberg had to be careful about its reputation.) Giersch's reply was that the quality of the work surely merited the award, but maybe the politics of it would be easier if there was a joint recipient who was neither Swedish nor shared Myrdal's views – what about Hayek? That's it – is this where Hayek's prize came from, or was he already high on the list, or what?"

"Hayek is by no means as rational and irrefutable as the right would have it. Indeed, he is often eccentric. He is a romantic, a serious deficit in a social theorist. Many of his arguments rest on a reductionist idea of socialism, and his conception of the sources of law can only be called mystical. But Hayek is not merely an eccentric mystic. In Road [to Serfdom], first published in 1944, he makes a powerful and far-ranging critique of state control of economic life. At least as far as he takes the argument in this book, there isn’t much that thoughtful modern liberals or even democratic socialists who understand the power of markets would necessarily object to—although they might feel that there is more to the story than Hayek acknowledges."

"Hayek doesn’t seem to grasp that human beings can exist both as individuals and as members of a society, without necessarily subordinating them to the needs of an imposed social plan (although he acknowledges that the state can legitimately serve social needs, he contradictorily views collective benefits as incompatible with individual freedom). He rejects the very concept of social justice, for much the same reasons that he rejects the arbitrary valuation of labor: in Hayek’s view there is no way to put an objective value on a grievance or to weigh it against other claims. And because he locates all responsibility and agency only at the level of the individual, he sees no way in which any claim can be generalized to society. Hayek’s political philosophy recognizes only negative rights. Positive fulfillment beyond the most basic needs is a matter of individual striving."

"In the 20th century, three world wars facilitated a Communist revolution, a Fascist backlash and the subsequent collapse of both. The weakness of bureaucratic information flows (relative to market-based competitors) undermined Communist economies – a point emphasized by Frederick Hayek, the co-leader (with Murray Rothbard) of the fourth generation Austrian School of Economics. Flows of information and disinformation played pivotal roles in the First, Second and Third (that is, Cold) World Wars."

"Friedrich Hayek is the twentieth-century social theorist who, probably more than any other, found himself vindicated by events — if not wholly, then at least in his central contention. He is also the one who, more than any other, himself exercised a significant political influence."

"Although he is very probably unaware of this book and of my work in general, I want to express a very belated thanks to Friedrich A. Hayek. His work had much more of an influence on me than I realized during the writing of the First Edition [of The End of Liberalism] I neither began nor ended as a Hayekist but instead found myself confirming, by process of elimination and discovery, many of his fears about the modern liberal state."

"It is likely that many modern economists would have no difficulty accepting Hayek's statement of the problem (of macroeconomics) as roughly equivalent to their own. Whether or not this is so, I wish … to argue that it should be so, or that the most rapid progress toward a coherent and useful aggregate economic theory will result from the acceptance of the problem statement as advanced by [Hayek]."

"One of the most original and most important ideas advanced by Hayek is the role of the "division of knowledge" in economic society … [But if] I had to single out the area in which Hayek's contributions were the most fundamental and pathbreaking, I would cast my vote for the theory of capital. As I said before, when I reviewed Hayek's book on The Pure Theory of Capital, it is "my sincere conviction that this work contains some of the most penetrating thoughts on the subject that have ever been published." If two achievements may be named, I would add Hayek's contributions to the theory of economic planning. Most of what has been written on systems analysis, computerized data processing, simulation of market processes, and other techniques of decision-making without the aid of competitive markets, appears shallow and superficial in the light of Hayek's analysis of the 'division of knowledge', its dispersion among masses of people. Information in the minds of millions of people is not available to any central body or any group of decision-makers who have to determine prices, employment, production, and investment but do not have the signals provided by a competitive market mechanism. Most plans for economic reform in the socialist countries seem to be coming closer to the realization that increasing decentralization of decision-making is needed to solve the problems of rational economic planning."

"Well I mentioned Hayek. There are two ways. One is because of my interest in political economy. The other way is that Hayek was a pioneer in the use of information in economics. One of the papers that Karl and I wrote together that I continue to like was a paper called "The Uses of Money". In that paper we tried to incorporate information and the cost of information to explain why people use money. One of Hayek's most basic ideas is that institutions are a way of reducing uncertainty. Man struggles to find institutional arrangements which on average make life a bit more predictable. Our "Uses of Money" is not so much about money as we conventionally think about it, it's about the idea of a medium of exchange, the function of an institution called the medium of exchange and how the medium of exchange as an institution resolves a part of peoples uncertainty about the future."

"All of this, of course, establishes Hayek's primacy over Hicks in the origin of the notion of intertemporal equilibrium."

"Although the democratic left is unlikely to find his views very palatable, at least one lesson can be learned by contemplating Hayek’s life. He shows us what can sometimes be achieved by sticking doggedly to your guns, ignoring intellectual fashion, and waiting until your moment comes. Hayek had only one tune to play, the virtues of the free-market economy as opposed to central planning, but he played it with panache, could improvise longer or shorter versions as the occasion demanded, and above all never gave up practicing."

"He relapsed into a crude identification of socialism with Soviet-style central planning, even though, in the West at any rate, there were very few actual socialists who continued to accept that equation."

"If the central contest of the twentieth century has pitted capitalism against socialism, then F. A. Hayek has been its central figure. He helped us to understand why capitalism won by a knockout. It was Hayek who elaborated the basic argument demonstrating that central planning was nothing else but an impoverishing fantasy."

"Friedrich A. von Hayek, winner of the Nobel Memorial Prize in Economic Science, says that on the whole he approves of the economic policy of the Reagan Administration. Yet, when he discusses particulars, Professor von Hayek - a conservative who is best known as an unrelenting opponent of Socialism and lesser forms of economic interventionism -sounds less than approving. He applauds the determination in Washington and London to stop inflation but laments that both Governments seek gradual progress. "You have to do it rapidly and drastically," he says."

"Information costs are reduced by the existence of large numbers of buyers and sellers. Under these conditions, prices embody the same information that would require large search costs by individual buyers and sellers in the absence of an organized market. (footnote 4: The original contributions were those of Hayek (1937 and 1945))."

"I was very flattered when I once got a note from Hayek saying that he would like to come and talk with me. He had read The Rise of the Western World, and he thought it was a very interesting book. He came to Seattle and spent two days with me. We had a good time and I really enjoyed him. But I wish I had known then what I have learned since, so that I could have appreciated his visit more appropriately. I had never read his stuff on cognitive science in those days. He still seems to me the greatest economist of the twentieth century, and by a long way. If you look for people who really want to try and understand the world, Hayek came closer to that ideal than anybody who has ever lived."

"Arguably the most influential economist of this century."

"I can testify from personal experience to the immense stimulus and direction which Hayek's migration to this country [Great Britain] gave to economic research in the 1930s, not only in London and economics faculties throughout the United Kingdom, but also in the international world of scholarship."

"I think that I have learned more from you than from any other living thinker, except perhaps Alfred Tarski … but not even excepting Russell."

"Our intellectual productivity is declining. Still, yours is admirable. You can still lecture (I cannot)....I know that you feel that you cannot do the work you used to do, and although you have told me and others about it, you kept it hidden from your observant friends—even though you complain to them of it, and draw their attention to it.... But apart from the field of intellectual production, you have done so much for others. There are many former students you have encouraged and helped on their way. And there are many who, like myself, have been helped by you in the most critical stages of their development."

"You will never know how much you have done for me. When I was in New Zealand, out of the world and buried by all my philosophical colleagues, you remembered me. It was through you that I came back into the world. It was through you (and Ernst Gombrich) that The Open Society was published, after a period (before you interfered) which led...me almost to despair. And when I came to the LSE [London School of Economics], through you, you gave me so much encouragement and help....There cannot be, ever, equality or reciprocity between you and me. I never could do anything for you, and it is extremely unlikely that I ever shall."

"I have created myself a kind of generational gulf between you and myself. Although you were only 3 years old when I was born, you became, as I now realize, a kind of father figure....[E]ven now, when I am 82, and we have been friends for so many years, you still are! And, strangely enough, you yourself...described your feelings towards me as those towards a young man who has made good."

"I should like to mention that I did not know Hayek’s book (The Road to Serfdom) when I wrote mine; in fact, my book was finished about six months before his. All I knew was a little pamphlet “Freedom and the Economic System,” in which he advocates “Planning for Freedom.”...The acknowledgement in my book refers to his practical help rather than to his influence; but since I wrote my book, I have read Hayek’s book (and several excellent articles), and I can only say that I have learned a very great deal from it. A few leftists here in England are in the same position ....Hayek, who I had seen only four or five times before, has been really wonderful to me in his many repeated approaches to various publishers, and I understand from the people here in the School [the London School of Economics] that he is always so. His interest in my book was mainly due to the fact that he too is hoping for a common basis of discussion for socialists and liberals."

"Well … I've always been a voracious reader — I have read the economic views of von Mises and Hayek, and … Bastiat … I know about Cobden and Bright in England — and the elimination of the corn laws and so forth, the great burst of economy or prosperity for England that followed."

"As someone who came to Fredrick von Hayek comparatively late in life, I’m still catching up with him…Indeed, many of the insights I thought I had discovered in my own readings and writings on the frontier of evolutionary biology and economics it turns out Hayek had long before me…The field of anthropology and archaeology needs Hayek quite badly."

"What distinguishes the theoretical men of the right from their counterparts on the left, Anderson writes, is that their voices were “heard in the chancelleries.” Yet whose voice has been more listened to, across decades and continents, than Hayek’s? Schmitt and Strauss have attracted readers from all points of the political spectrum as writers of dazzling if disturbing genius, but the two projects with which they are most associated—European fascism and American neoconservatism—have never generated the global traction or gathering energy that neoliberalism has now sustained for more than four decades. It would be a mistake to draw too sharp a line between the marginal children of Nietzsche—with political man on one branch of the family tree, economic man on the other. Hayek, at times, could sound the most Schmittian notes. At the height of Augusto Pinochet’s power in Chile, Hayek told a Chilean interviewer that when any “government is in a situation of rupture, and there are no recognized rules, rules have to be created.” The sort of situation he had in mind was not anarchy or civil war but Allende-style social democracy, where the government pursues “the mirage of social justice” through administrative and increasingly discretionary means. Even in The Constitution of Liberty, an extended paean to the notion of a “spontaneous order” that slowly evolves over time, we get a brief glimpse of “the lawgiver” whose “task” it is “to create conditions in which an orderly arrangement can establish and ever renew itself.” (“Of the modern German writings” on the rule of law, Hayek also says, Schmitt’s “are still among the most learned and perceptive.”) Current events seemed to supply Hayek with an endless parade of candidates. Two years after its publication in 1960, he sent The Constitution of Liberty to Portuguese strongman António Salazar, with a cover note professing his hope that it might assist the dictator “in his endeavour to design a constitution which is proof against the abuses of democracy.” Pinochet’s Constitution of 1980 is named after the 1960 text. Still, it’s difficult to escape the conclusion that though Nietzschean politics may have fought the battles, Nietzschean economics won the war. Is there any better reminder of that victory than the Detlev-Rohwedder-Haus in Berlin? Built to house the Luftwaffe during World War II, it is now the headquarters of the German Ministry of Finance."

"Here’s where things get interesting. Though Hayek abandoned formal economics for social theory after the 1930s, his social theory remained dedicated to elaborating what he saw as the essential problem of economics: how to allocate finite resources between different purposes when society cannot agree on its basic ends. With its emphasis on the irreconcilability of our moral ends—the fact that members of a modern society do not and cannot agree on a scale of values—Hayek’s point was fundamentally political, the sort of insight that has agitated everyone from Thomas Hobbes to John Rawls and Jürgen Habermas. Hayek was unique, however, in arguing that the political point was best addressed—indeed, could only be addressed—in the realm of the economic. No other discourse— not moral philosophy, political theory, psychology, or theology— understood so well that our ultimate moral values and political purposes get expressed and revealed only under conditions of radical economic constraint—when one is forced to assign a limited set of resources to ends that favor different sectors of society."

"The intrinsic links between moral and economic life, as well as the intractability of moral conflict, were the kernels of insight that animated Hayek’s most far-reaching writing against socialism. The socialist presumes an agreement on ultimate ends: the putatively shared understanding of principles such as justice or equality is supposed to make it possible for state planners to conceive of their task as technical, as the neutral application of an agreed-upon rule. But no such agreement exists, Hayek insisted, and if it is presumed to exist, nothing will reveal its nonexistence more quickly than the attempt to implement it in practice."

"I think it's a scandal that he's not one of the absolute required names on political theory reading lists for modern political thought or 20th century political thought. I know this gets into some sensitive terrain, but he absolutely should be there alongside Hobbes, Rousseau, Marx, Nietzsche, Arendt. And certainly should be there over Berlin, Oakeshott, Strauss, and Schmitt. Obviously, more is better, and I want students to read everything, but we have to make choices, and I'd put H. ahead of Berlin et al."

"I very well remember Hayek's visit to Cambridge on his way to the London School. He expounded his theory and covered a black-board with his triangles. The whole argument, as we could see later, consisted in confusing the current rate of investment with the total stock of capital goods, but we could not make it out at the time."

"Lange argued that what economists now call neoclassical price theory showed the possibility of combining central planning and the market, and Hayek retorted that planning would subvert at its heart the mechanism that gave capitalism its vitality. Hayek’s criticisms of market socialism, and more recently those of Janos Kornai, are for the most part on the mark. But the experiences of capitalism, as well as of socialism, in the last fifty years suggest ways of reformulating the concept of market socialism in response to the Hayekian critique of its intellectual ancestor."

"While often right and enormously influential, Hayek himself agreed that some of his predictions did not become true."

"Since Hayek was radically scornful of human reason, he could not, like John Locke or the Scholastics, elaborate a libertarian system of personal and property rights based on the insights of human reason into natural law. Nor could he, like Mises, emphasize man's rational insight into the vital importance of laissez-faire for the flourishing and even survival of the human race, or of foregoing any coercive intervention into the vast and interdependent network of the free market economy. Instead, Hayek had to fall back on the importance of blindly obeying whatever social rules happened to have "evolved," and his only feeble argument against intervention was that the government was even more irrational and was even more ignorant, than individuals in the market economy."

"Hayek and Nozick both think that talk of distributive justice is misleading, because it suggests the presence of a distributing person or mechanism; in a developed economy there is no such thing, and in a free society, the attempt to institute such a thing would destroy all freedom. Hayek, however, supports this view with an account of the computational impossibility of deciding what to produce and dis tribute in order to achieve justice, while Nozick is more concerned to emphasize that the state has no right to seize the resources of individuals in order to distribute them according to any principle whatever."

"Von Hayek was wrong. In strong and vibrant democracies, a generous social-welfare state is not a road to serfdom but rather to fairness, economic equality and international competitiveness."

"Hayek […] seemingly would severely limit mankind’s ability to design the future through the process of working things out. But Hayek rejects neither reason nor deliberative critique nor constructivism. The exercise of reason in deliberative critique in the service of reconstruction of economy, polity, and society is not only called for but is part and parcel of the Mengerian argument. Constructivism is inherent in the body of social theory developed by Hayek. Constructivism is practiced by Hayek. It is the fundamental logic of his life’s work. In a sense, his own practice constitutes the negation of his own argument."

"The Coase-Samuelson generation were brought up witnessing the great debate between von Mises and Lerner-Lange concerning the feasibility of socialist rational pricing to produce Utopia. (That was a reprise of earlier Pareto-Barone-Wieser-Taylor debates.) Many contemporaries believed Lerner-Lange triumphed in the debate. I came to believe that Friedrich Hayek was the true victor. Under static conditions where all is known or knowable (to whom?), whatever optimal states laissez-faire might occasion, so could some computer solution or some algorithms of play the game of competition also achieve. But in the real world all is changing, even in the time it takes me to write this sentence. Hayek has been persuasive — not in Whig ideology or in declaring that moderate reform of laissez-faire leads inevitably down the road to totalitarian socialism but — in arguing that experience suggests that only with heavy dependence on market pricing mechanisms can there be realized quasi-efficient and quasi-progressive organization of societies involving humans as Darwinian history has equeathed them. If a reader does not find the Hayek dynamic arguments persuasive, I will not here argue the matter further."

"The Hayek I met on various occasions – at the LSE, at the University of Chicago, in Stockholm (1945), at Lake Constance-Lindau Nobel summer conferences – definitely bemoaned progressive income taxation, state-provided medical care and retirement pensions, fiat currencies remote from gold and subject to discretionary policy decisions by central bank and treasury agents."

"Hayek fails to account either for the passion among intellectuals for equality, or for the resulting success of socialists and their egalitarian successors in driving the liberal idea from the stage of politics. This passion for equality is not a new thing, and indeed pre-dates socialism by many centuries, finding its most influential expression in the writings of Rousseau. There is no consensus as to how equality might be achieved, what it would consist in if achieved, or why it is so desirable in the first place. But no argument against the cogency or viability of the idea has the faintest chance of being listened to or discussed by those who have fallen under its spell."

"Hayek sees that the zero-sum vision is fired by an implacable negative energy. It is not the concrete vision of some real alternative that animates the socialist critic of the capitalist order. It is hostility toward the actual, and in particular toward those who enjoy advantages within it. Hence the belief in equality remains vague and undefined, except negatively. For it is essentially a weapon against the existing order – a way of undermining its claims to legitimacy, by discovering a victim for every form of success. The striving for equality is, in other words, based in ressentiment in Nietzsche’s sense, the state of mind that Max Scheler identified as the principal motive behind the socialist orthodoxy of his day. It is one of the major problems of modern politics, which no classical liberal could possibly solve, how to govern a society in which resentment has acquired the kind of privileged social, intellectual, and political position that we witness today."

"I am not persuaded that Hayek got the substantive connections entirely right. He was too captivated by the enabling effects of the market system on human freedoms and tended to downplay - though he never fully ignored - the lack of freedom for some that may result from a complete reliance on the market system, with its exclusions and imperfections, and the social effects of big disparities in the ownership of assets. But it would be hard to deny Hayek's immense contribution to our understanding of the importance of judging institutions by the criterion of freedom."

"Our debt to Hayek is very substantial. He helped to establish a freedom-based approach of evaluation through which economic systems can be judged (no matter what substantive judgments we arrive at). He pointed to the importance of identifying those services that the state can perform well and has a social duty to undertake. Finally, he showed why administrative psychology and propensities to corruptibility have to be considered in determining how states can, or cannot, work and how the world can, or cannot, be run."

"Hayek himself gradually identified with classical liberalism in a more specific sense. But it seems to me an open question just where his arguments should lead us. Hayek himself started with socialist concerns and sentiments. He also clearly favored extra-market welfare provision, at least within rich countries, and his Road to Serfdom allows for government to play quite a considerable role. I would have thought that his arguments point us in the direction of ideas that everyone should pay attention to, rather than just offering a positive program for one specific view of politics. At the same time we may find that the kind of structural characteristics that he discerns in our society, and the kind of freedom we need in order to learn, may make certain kinds of otherwise attractive ideals difficult to pursue. They may also, however, make it difficult for us to solve certain other kinds of problem – such as some issues concerned with the environment."

"No one has characterized market mechanisms better than Friedrich von Hayek."

"Friedrich Hayek, who died on March 23, 1992 at age 92, was arguably the greatest social scientist of the twentieth century. By the time of his death, his fundamental way of thought had supplanted the system of John Maynard Keynes — his chief intellectual rival of the century — in the battle since the 1930s for the minds of economists and the policies of governments.""

"[Hayek] became [in his later years] the dominant intellectual influence of the last quarter of the twentieth century."

"Which of Hayek's ideas are now widely accepted? I can't think of any. … Hayek's big idea - basically, that efficient market outcomes are emergent - is absent from most econ (though supported by lab experiments)."

"Hayek, in my view, is the leading economic thinker of the 20th century."

"I first had to discover certain things for myself, and essentially it was the behavior I observed in human subjects in my laboratory study of markets that motivated me eventually to study Hayek seriously. Reading with the eyes of a new mind, I was able to appreciate an enormous depth of understanding in the work of Hayek that would have escaped me if I had not had this personal experience in the laboratory."

"The source of confusion here is that there was a Good Hayek and a Bad Hayek. The Good Hayek was a serious scholar who was particularly interested in the role of knowledge in the economy (and in the rest of society). Since knowledge—about technological possibilities, about citizens’ preferences, about the interconnections of these, about still more—is inevitably and thoroughly decentralized, the centralization of decisions is bound to generate errors and then fail to correct them. The consequences for society can be calamitous, as the history of central planning confirms. That is where markets come in. All economists know that a system of competitive markets is a remarkably efficient way to aggregate all that knowledge while preserving decentralization."

"The Bad Hayek emerged when he aimed to convert a wider public. Then, as often happens, he tended to overreach, and to suggest more than he had legitimately argued. The Road to Serfdom was a popular success but was not a good book. Leaving aside the irrelevant extremes, or even including them, it would be perverse to read the history, as of 1944 or as of now, as suggesting that the standard regulatory interventions in the economy have any inherent tendency to snowball into “serfdom.” The correlations often run the other way. Sixty-five years later, Hayek’s implicit prediction is a failure, rather like Marx’s forecast of the coming “immiserization of the working class.”"

"Mrs. Hayek, I want you each day in the future to address your husband and inquire what his progress has been in what I consider to be one of the most interesting and intriguing fields, the evolution of the work of scholars."

"What's the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That's the consensus among economists. That's the Hayek legacy."

"Popper's falsification is intimately connected to the notion of an . ...one in which no permanent truth is held to exist; this would allow counter-ideas to emerge. Karl Popper shared ideas with his friend, the low-key economist von Hayek, who endorsed capitalism as a state in which prices can disseminate information that bureaucratic socialism would choke."

"During the following decade [of the 1950s] modern economic history took a dramatic swing away from the liberal-left consensus established by the Hammonds, Tawney and the Webbs. The seminal text for this change of direction was the 1954 collection of essays compiled by F. A. Hayek, "Capitalism and the Historians"."

"Even by the standards of his day Friedrich Hayek’s thought was wide-ranging and covered fields as diverse as economics, psychology, jurisprudence and social and political theory. Yet, despite this heterogeneity, underlying his intellectual contribution is a unifying philosophical approach centred upon a conception of mind and of the nature of reason. It is to this foundational aspect of Heyek’s thought, then, that attention must be paid if one is to understand his wider contributions. Regrettably, in an introductory text, there is only so much in-depth critical appraisal that one can undertake. For this reason, and by setting out his views on a variety of topics and appraising them where possible, the main purpose of this book will be to familiarise the reader with the principal themes of Hayek’s thought and to ascertain the extent to which his contributions may be considered to form a coherent system."

"Our inspiration was less Rab Butler's Industrial Charter than books like Colm Brogan's anti-socialist satire, Our New Masters … and Hayek's powerful Road to Serfdom, dedicated to 'the socialists of all parties'. Such books not only provided crisp, clear analytical arguments against socialism, demonstrating how its economic theories were connected to the then depressing shortages of our daily lives; but by their wonderful mockery of socialist follies, they also gave us the feeling that the other side simply could not win in the end. That is a vital feeling in politics; it eradicates past defeats and builds future victories. It left a permanent mark on my own political character, making me a long-term optimist for free enterprise and liberty."

"Adam Smith, the greatest exponent of free enterprise economics till Hayek and Friedman."

"For Dicey, writing in 1885, and for me reading him some seventy years later, the rule of law still had a very English, or at least Anglo-Saxon, feel to it. It was later, through Hayek's masterpieces "The Constitution of Liberty" and "Law, Legislation and Liberty" that I really came to think this principle as having wider application."

"All the general propositions favouring freedom I had … imbibed at my father's knee or acquired by candle-end reading of Burke and Hayek ..""

"Hayek's analysis of the perils of the planned society and the command economy is, indeed, unrivalled. He shows how attempts to defy markets are doomed to be self-defeating. He warns us that beneath the seductive slogans and the simplistic targets of the utopians who promise heaven on earth there frequently lurks the reality of a totalitarian hell. He reminds us that we must value the habits, rules and institutions of liberty for their own sake if we are to enjoy for long the benefits that freedom brings. And all these messages are as relevant to our own age as when he first spoke to the West about that Road to Serfdom. Perhaps more so. This is because Hayek is still the preeminent modern philosopher of ordered liberty — something that in every continent is today under threat from dark forces of anarchy, hatred, revolution, fanaticism and violence. Against such ideologues, he encourages us to have faith in the peaceful, subtle processes by which people co-operate in fulfilling their requirements under a rule of law; to rely on an extended, spontaneous order; in short, to promote the system generally known as capitalism. Hayek is, therefore, the prophet not of doom and disaster, but of peace and plenty. His is a voice of wisdom for our time, and for all time. We should listen to him."

"The key importance of the amount of information available and the frequent lack of relevant information have been dealt with only in the last decades. L. von Mises and F. A. von Hayek can rightly be regarded as pioneers in this connection."

"It does tend to make Hayek a much more systematic thinker in this area than he was. I am not saying that Hayek thought of himself as a good economist but only a moderately good political scientist or philosopher, but that is the fact. […] To repeat what I said above, Hayek was only a moderately good political scientist or philosopher. (I should say that Hayek's view of my work was much the same: He thought I was a good economist but didn't like my political science.)"

"The most interesting among the courageous dissenters of the 1980s were the classical liberals, disciples of F. A. Hayek, from whom they had learned about the crucial importance of economic freedom and about the often-ignored conceptual difference between liberalism and democracy."

"Everyone in Boston of a certain age knows the story of Rosie Ruiz, the marathoner who crossed the Boston finish line in 1980 at 2:31.56, flabby thighs and all, having barely broken a sweat. Despite mounting skepticism, she basked in the glory of having run the third-fastest female marathon in history – for a few days, that is, until a couple of students remembered seeing her jump out of the crowd half a mile from the finish. Something of the sort has been going on recently with the shade of Friedrich von Hayek. The Austrian economist, who died in 1992 just short of what would have been his ninety-third birthday, never made false claims for himself – far from it: he knew all too well the loneliness of the long distance runner. And scrupulous work as editor by the late W.W. Bartley, interpreter Bruce Caldwell, and biographer Alan Ebenstein, have made it possible to see the man clear. But the claims conservatives are making about the role he played as an economist are beginning to smack of Ruizismus. That is, they have jumped a caricature out of the bushes late in the day and claim that their guy ran a great race."

"Nearly two decades ago, during dinner with the late Nobel laureate Friedrich Hayek, I asked him if he had the power to write one law that would get government out of our lives, what would that law be? Hayek replied he'd write a law that read: Whatever Congress does for one American it must do for all Americans. He elaborated: If Congress makes payments to one American for not raising pigs, every American not raising pigs should also receive payments. Obviously, were there to be such a law, there would be reduced capacity for privilege-granting by Congress and less influence-peddling."

"Coming back to the question in the heading: how should Hayek be seen, after all, as an intellectual hero or an ideologue? In my (European) view, the answer would be: Under the historical condition which Hayek developed his liberal social philosophy, his courageous opposition to a fashionable, pro-socialist Zeitgeist made him an outstanding intellectual. However, as I tried to point out, he misunderstood or did not wish to understand the role of income redistribution in a free society. Instead, his continued crusading against allegedly atavistic ideals of material equality puts income redistribution at par with socialist irrationalism. This one-sided interpretation paved the way for his arguments to be over-simplified for political partisanship in the United States. Hayek’s new adherents fail to account for his intellectual stature and make him appear post mortem like an ideologue."

"The trouble in modern democracy is that men do not approach to leadership 'til they have lost the desire to lead anyone."

"Scratch a pessimist and you find often a defender of privilege."

"Ignorance is an evil weed, which dictators may cultivate among their dupes, but which no democracy can afford among its citizens."

"The state is or can be master of money, but in a free society it is master of very little else."

"Any proposals for the future, while they should use to the full the experience gathered in the past, should not be restricted by consideration of sectional interests established in the obtaining of that experience. Now, when the war is abolishing landmarks of every kind, is the opportunity for using experience in a clear field. A revolutionary moment in the world’s history is a time for revolutions, not for patching."

"Organisation of social insurance should be treated as one part only of a comprehensive policy of social progress. Social insurance fully developed may provide income security; it is an attack upon Want. But Want is one only of five giants on the road of reconstruction and in some ways the easiest to attack. The others are Disease, Ignorance, Squalor and Idleness."

"Social security must be achieved by co-operation between the State and the individual. The State should offer security for service and contribution. The State in organising security should not stifle incentive, opportunity, responsibility; in establishing a national minimum, it should leave room and encouragement for voluntary action by each individual to provide more than that minimum for himself and his family."

"The object of government in peace and in war is not the glory of rulers or of races, but the happiness of the common man."

"It was the Beveridge Report that provided the battlefield on which the decisive struggle to win a national commitment to New Jerusalem was waged and won... As appropriate for a prophet and a brilliant Oxford intellect, Beveridge thought a lot of himself, so that righteousness went hand in hand with authoritarian arrogance and skill at manipulating the press to make him the Field Marshal Montgomery of social welfare."

"[I]n his report on Full Employment in 1944 Beveridge urged an unquantified outlay of government funds in order to stimulate enough demand to bring about full employment, while admitting that such a policy in 1938 would have caused a balance-of-payments deficit of £130 million... Beveridge's answer to the conundrum lay in re-equipping industry and expanding output and exports, yet he offered no detailed analysis, no pondered advice, as to how these desirable objects were to be achieved; no costings of the investment needed and how it was to be funded; and he certainly failed to consider what effect the burden of the welfare state and the cost of maintaining full employment might have on such industrial investment. In any case he placed the need to modernise British industry and raise its productivity only third in priority in his "chosen route of planned national outlay"."

"Full Employment in a Free Society is really a sermonising tract, gloriously sweeping over difficulties human and technological to the promised land beyond. And, in the last resort, Sir William justified the practicality of his vision by simple analogy with the achievements of the wartime British economy: "The significance of war in relation to employment is that the scope of State outlay is increased immensely and indefinitely and that the State formally and openly gives up any attempt to balance its budget or limit its outlay by considerations of money". Similarly with regard to his plan for a welfare state, we are told by his daughter and biographer: "To the critics who inquired 'Can we pay for it?' the impatient reply was given, 'We can always pay for wars, this one costs £15 million a day. We will just have to afford the Beveridge Plan'.""

"Beveridge loved parties and recreation as much as he loved work and conversation. He gave much hospitality in The Lodgings, and there was always gusto and gaiety and some challenge. I saw a lot of him after his retirement in 1954. I had come to love the now benign Beveridge. He retained a sort of boyishness and excitement, and his charm and tact could be consummate."

"William Beveridge, architect of the modern welfare state, understood the danger that people might settle down to life on benefits, so proposed compulsory re-training schemes. And realising the even greater risks for school-leavers, who were not used to earning a wage, his report argued that "for boys and girls there should ideally be no unconditional benefit at all"."

"William Beveridge reads today like an Old Testament prophet: full of moral declamation and visionary objective. His 1942 report set goals to attack the five giant evils: Want, Disease, Ignorance, Squalor and Idleness. The ecstatic reception of his report (or at least the abridged version) was the response of a society in the midst of an existential war, still traumatised by the scourge of unemployment in the previous decade."

"He understood that his plan would be immeasurably strengthened by broad public support. So he shaped his proposals around the principle that "benefit in return for contributions, rather than free allowances from the State, is what the people of Britain desire". Everyone would put something in, and everyone would get something out. Beveridge appealed both to altruism and self-interest. This is often described as a welfare "contract" or "bargain". But that would be to misunderstand why the welfare state used to be so popular. As the Labour MP Jon Cruddas argues, it was popular because it represented an emotional connection, a way of thinking about the type of society that Britain was after the war — a covenant between each to look after all."

"The new liberals...wanted an "unservile state" which took on only those welfare functions which would liberate the citizenry into citizenship. Lord Beveridge was a fine example of the breed, imbued with what Mrs Thatcher might hail as Victorian values, particularly a strong sense of social responsibility and a tremendous emphasis on the relationship between freedom, knowledge and self-control."

"On my experience of his later years at least, while he was the greatest administrative genius I have seen he was almost certainly the worst administrator. He could not get on with his fellow administrators... He did not really understand politics, still less politicians, and in his tidy, administrative mind there was not always enough place for human reactions and human frailties... He was a hard master, but he certainly taught one of his research assistants the meaning of work, and the need for a thorough attack on the facts before one jumped into any theories about a subject."

"Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius—and a lot of courage to move in the opposite direction."

"Perhaps we cannot raise the winds. But each of us can put up the sail, so that when the wind comes we can catch it."

"Education can help us only if it produces “whole men”. The truly educated man is not a man who knows a bit of everything, not even the man who knows all the details of all subjects (if such a thing were possible): the “whole man” in fact, may have little detailed knowledge of facts and theories, he may treasure the Encyclopædia Britannica because “she knows and he needn’t”, but he will be truly in touch with the centre. He will not be in doubt about his basic convictions, about his view on the meaning and purpose of his life. He may not be able to explain these matters in words, but the conduct of his life will show a certain sureness of touch which stems from this inner clarity."

"The cultivation and expansion of needs is the antithesis of wisdom. It is also the antithesis of freedom and peace. Every increase of needs tends to increase one’s dependence on outside forces over which one cannot have control, and therefore increases existential fear. Only by a reduction of needs can one promote a genuine reduction in those tensions which are the ultimate causes of strife and war."

"Scientific and technological “solutions” which poison the environment or degrade the social structure and man himself are of no benefit, no matter how brilliantly conceived or how great their superficial attraction."

"That soul-destroying, meaningless, mechanical, monotonous, moronic work is an insult to human nature which must necessarily and inevitably produce either escapism or aggression, and that no amount of “bread and circuses” can compensate for the damage done—these are facts which are neither denied nor acknowledged but are met with an unbreakable conspiracy of silence—because to deny them would be too obviously absurd and to acknowledge them would condemn the central preoccupation of modern society."

"The disease having been caused by allowing cleverness to displace wisdom, no amount of clever research is likely to produce a cure."

"It is doubly chimerical to build peace on economic foundations which, in turn, rest on the systematic cultivation of greed and envy, the very forces which drive men into conflict."

"It might be thought that the I Ching and the oracles are metaphysical while the computer model is "real"; but the fact remains that a machine to foretell the future is based on metaphysical assumptions of a very definite kind. It is based on the implicit assumption that "the future is already here," that it exists already in a determinate form, that it requires merely good instruments and good techniques to get it into focus and make it visible. The reader will agree that this is a very far-reaching metaphysical assumption which seems to go against all direct personal experience."

"The modern economist … is used to measuring the “standard of living” by the amount of annual consumption, assuming all the time that a man who consumes more is “better off” than a man who consumes less. A Buddhist economist would consider this approach excessively irrational: since consumption is merely a means to human well-being, the aim should be to obtain the maximum of well-being with the minimum of consumption."

"The ownership and the consumption of goods is a means to an end, and Buddhist economics is the systematic study of how to attain given ends with the minimum means. Modern economics, on the other hand, considers consumption to be the sole end and purpose of all economic activity, taking the factors of production—labour and capital—as the means. The former, in short, tries to maximise human satisfactions by the optimal pattern of consumption, while the latter tries to maximise consumption by the optimal pattern of productive effort."

"From the point of view of the employer, it is in any case simply an item of cost, to be reduced to a minimum if it cannot be eliminated altogether, say, by automation. From the point of view of the workman, it is a 'disutility'; to work is to make a sacrifice of one's leisure and comfort, and wages are a kind of compensation for the sacrifice."

"From a Buddhist point of view, this is standing the truth on its head by considering goods as more important than people and consumption as more important than creative activity. It means shifting the emphasis from the worker to the product of work, that is, from the human to the sub-human, surrender to the forces of evil."

"The Buddhist view, “takes the function of work to be at least threefold”: “to give a man a chance to utilize and develop his faculties; to enable him to overcome his egocentredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”"

"To organize work in such a manner that it becomes meaningless, boring, stultifying, or nerve-racking for the worker would be little short of criminal; it would indicate a greater concern with goods than with people, an evil lack of compassion and a soul-destroying degree of attachment to the most primitive side of this worldly existence."

"Anything that we can destroy, but are unable to make is, in a sense, sacred, and all our 'explanations' of it do not explain anything."

"Small is beautiful"

"Retirement should be a happier time, conditioned upon not being ill.#"

"People are treated for mental disorders, they go back to work and they earn wages again. We can see how their earnings go up. But how do they feel about themselves and the world? That has a value."

"We usually think that a strong economy leads to an increase in life satisfaction among the population. We found that's not the case in Scotland."

"What is scarce is money. The lack of money to spend on goods is what keeps the unemployed resources from producing more goods. Work, moreover, instead of being a curse, is desired more than anything else because the alternative is not enjoyment of leisure but the suffering of unemployment and deprivation. Of course, if people could get income without they would not object too much (although their self-respect in feeling they are useful members in society who are earning their income is too easily underestimated). But it is only by finding work they can obtain the necessary income they need."

"The central idea is that government fiscal policy, its spending and taxing, its borrowing and repayment of loans, its issue of new money and withdrawal of money, shall be undertaken with an eye only to the results of these actions on the economy and not to any established traditional doctrine what is sound and what is unsound ...Government should adjust its rates of expenditure and taxation such that total spending is neither more or less than that which is sufficient to purchase the full employment level of output at current prices. If this means there is deficit, greater borrowing, "printing money," etc., then these things in themselves are neither good or bad, they are simply the means to the desired ends of full employment and price stability."

"The scholars who understand it hesitate to speak out boldly for fear people will not understand. The people, who understand it quite easily, also fear to speak out while they wait for the scholars to speak out first. The difference between our present situation and that of the story is that it is not the emperor but the people who are periodically made to go naked and hungry and insecure and discontented - a ready prey to less timid organizers of discontent for the destruction of the civilization."

"Economics has gained the title Queen of the Social Sciences by choosing solved political problems as its domain"

"Ideas appropriate to a past social order have a strange power of influencing thought and action within a later institutional frame work."

"The expenses of the royal household, wars, and lavish public building were financed by tolls and the profits of the king's foreign trade monopoly, by conscription of labour and heavy taxation. The results were impoverishment of the masses, alienation of land, and the development of a proletariat."

"Aristotle laid the foundation of the distinction between use-value and exchange-value, which has remained a part of economic thought to the present day."

"Christ, addressing Himself to the labourers of His time, proclaimed for the first time the worthiness both in material and a spiritual sense of all work."

"The chronological inconsistencies are perhaps most clearly exemplified by the writings of Nicole Oresme. In his Traictie de la Premierere Invention des Monnies, written about 1360, he develops a theory of money which reveals a very different approach to economic problems from others."

"It is generally conceded that trade and travelers paved the way for capitalistic philosophy further and international industry."

"The merchant and the industrialist."

"Profit can only arise upon alienation, i.e. in the act of exchange, when the seller sells more dearly than he has bought gaining profits and enabling a procurement adequate to demands and return on investments."

"Whatever his merits as an economist, Hume's place as one of the foremost exponents of capitalism is clearly established. His views on the landed interest and his recognition of self-interest and his desire for accumulation as the driving forces of economic activity in his time helped to consolidate the forces that were struggling to add political power to the economic supremacy which they had already achieved."

"Adam Smith himself was under no allusion about the desire of individuals, particularly business men, to create privileged positions for themselves. While historically wealth was limited to title and impassable to peasantry."

"Ricardo, writing fifty years later than Smith, showed a greater insight into the working of the economic system; Ricardo and Smith both did not lack subtlety despite their different views."

"One thing which is striking in Malthus's theory is his insistence on contradictions and conflicts in the capitalist system. The system is shown not to be self-adjusting. Unless a large class of unproductive consumers was maintained, periodic over-production and stagnation would inevitably occur.admitting the possibility of unsuccessful systems and recognizing its causes. Showing a strong stance against capitalism and explaining its success depends on slowing down of making more productive populations, a counter-intuitive argument"

"The difficulties in economic life arise mainly because men forget divine power,,"

"Capitalism had been more revolutionary then any previous social system. It had swept away without scruples old institutions and modes of thought, if they were found to stand in its way."

"Marx is often claimed as inventor of the class struggle while a critical rebuttal is produced by English socialist forerunners, for example Burke."

"The second difficulty inherent in the contradictory character of the commodity is this: a commodity must have use value, but not for its owner, for if it had, it would cease to be a commodity. Meaning commodities can not be created for or designed by their owners, faulting the definition of commodity and its preconceptions."

"Marx's prognosis of the future of the capitalist system has often been understood to imply a fatalistic view. Marx's own life should be enough to show that this is not so. Marx believed in nature’s superiority."

"Since the earth can yield its cultivator more then he needs for his own subsistence, the surplus can be appropriated by another class. Thus creating an eco system of abundant resources that is expandable."

"Mill sought to strengthen his defence of trade unions not by denying their possible monopoly effects, but by an appeal to the principle of laisser faire itself. To prevent the formation of corporate unions was, he thought, to interfere with a right obviously included in the general rule of freedom of contract. While monopolies were only to be abolished if corporations were not free to contract as they pleased, rather be obliged to involve consideration."

"In its origins the utility school was strongly influenced by a desire to strengthen the potentially apologetic character of economics."

"Utility alone is the cause of value. Devaluing all effort by all involved industries of manufacture and essentially dismissing the role of aesthetic communication and portrayals."

"Robbed of a foundation of political philosophy on which it had based itself, economics is in great danger of becoming a plaything of lordship and its exclusive hold on political services and philosophical concepts."

"Sir Eric Roll, a remarkably eclectic English student of Marx -- he has been a professor, a senior civil servant, an accomplished international negotiator who led the negotiations for both the Marshall Plan and the EEC, a banker, a member of the court of the Bank of England and a respected writer on the history of economic thought--"

"The study of human societies and economics is of great importance, and it is not the purpose of the book to suggest otherwise. Rather it is to argue that conventional economics offers a very misleading view of how the world actually operates, and that it needs to be replaced."

"The obstacles facing academic economists are formidable, for tenure and professional advancement still depend to a large extent on a willingness to comply with and to work within the tenets of orthodox theory."

"The importance to Smith of the overall set of values in which the economy operates is generally ignored by his followers in the late twentieth century. His economics, based upon individual self-interest, is remembered, but his moral framework is not."

"At 2 per cent growth a year, an economy doubles in size in just thirty years."

"The temptation to use mathematics is irresistible for economists. It appears to convey the appropriate air of scientific authority and precision to economists' musings."

"The second part of the New Right's policy package has been the belief that free-market solutions are always best. It is this latter view which is profoundly mistaken. Markets and profits are crucial, but the pure free-market model itself is deeply flawed."

"Despite the high salaries involved, employing economists is a cost-effective way for banks, and stockbrokers to secure exposure in the media."

"The model of competitive equilibrium which has been discussed so far is set in a timeless environment. People and companies all operate in a world in which there is no future and hence no uncertainty."

"The behavior of the economy as a whole, at the aggregate, macro-level, is built up from the individual equations at the micro-level."

"The reader might reflect that an awful lot of supposing has to take place in order for the quantity theory of money to be true."

"Baseball players or cricketers do not need to be able to solve explicitly the non-linear differential equations which govern the flight of the ball. They just catch it."

"By any reasonable criteria, the discipline of economics as a whole, in its present state, is sadly lacking."

"In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment."

"Once the true relationship between inflation and unemployment is understood, with luck and skill, a free lunch is possible."

"Keynes tried to show that market economies could settle in equilibrium states in which the labour market did not clear, and in which the level of unemployment was high. He believed that this was due to a particular example of market failure, developed in his concept of effective demand."

"We need to abandon the economist's notion of the economy as a machine, with its attendant concept of equilibrium. A more helpful way of thinking about the economy is to imagine it as a living organism."

"The linear, mechanistic view of the world which pervades orthodox economics is simply not capable of capturing the richness and complexity of the rhythms and fluctuations of developed economies."

"Even in financial markets, the concept of market efficiency does not hold."

"Many Europeans, while admiring the strength and power of the American economy, undoubtedly feel that the system of social values which prevails in the United States, manifested in the acute problems evident in the inner cities and the level of violent crime, for example, leaves much to be desired."

"But Adam Smith was a philosopher as well as well as an economist, famous in his time as much for his Theory of Moral Sentiments as for The Wealth of Nations. And as he understood so well, society is more than the sum of its individual parts."

"First, the welfare state is not a subject apart, but fits naturally into the framework of economic analysis. Secondly,the theoretical arguments support the existence of the welfare state not only for well known equity reasons but also - and powerfully - in efficiency terms."

"A 'socialist' country like Sweden has a highly articulated welfare state; Denmark and New Zealand (which are not highly industrialized) were among the first countries with a public system of old-age pensions; and Saskatchewan was the first Canadian province to have publicly organized health insurance."

"A society is a cooperative venture for the mutual advantage of its members."

"A reduction in the liberty of the least well off cannot be justified even if it is to their economic advantage."

"Perfect competition must hold in product and factor markets, and also (and importantly) in capital markets. The assumption has two essential features: economic agents must be price takers; and they must have equal power."

"In a world of certainty, the welfare state has only a small role."

"It is argued that regulators are frequently captured by those whom they are supposed to regulate."

"Markets can be efficient or inefficient; so can governments. thus market failure is a counterpoint to government failure."

"there is an efficiency case for an institutional welfare state."

"By 'trading' (i.e. pooling), individuals can acquire certainty."

"Thus social insurance, in sharp contrast with actuarial insurance, can cover not only risk but also uncertainty."

"Money income is a flawed measure of individual welfare."

"The European Commission uses an explicit relative poverty line of 60 per cent of national average income."

"The crucial point is that any system of health care must constitute a genuine strategy-ad hoc tinkering is a guaranteed road to disaster."

"Education to the extent that it raises an individual's future earnings, increases her future tax payments; in the absence of any subsidy, an individual's investment in education confers a 'dividend' on future taxpayers."

"Efficiency advantages and disadvantages are more finely balanced than with health care - one person's 'sign of a civilized society' is another's 'society is going to the dogs'."

"So far as school education is concerned, many of the assumptions necessary for market efficiency fail, the main problems being imperfect information, imperfect capital markets, and external effects."

"It has been argued that relatively poor people will borrow to buy a house, so why not to buy a degree?"

"Given the external benefits higher education creates, it is efficient that taxpayers subsidies should be a permanent part of the landscape."

"The welfare state is the outcome of diverse forces over nearly four centuries of developing social policy."

"We need a welfare state of some sort for efficiency reasons, and would continue to do so even if all distributional problems were solved."

"Unless the countries of East Asia are very different, rising incomes and the weakening of extended family ties will lead to demands for rising social expenditure."

"It is the welfare state that has made capitalism, with all its attendant benefits of economic growth, politically feasible..."

"Edwin Cannan significantly influenced Hayek and many other economists, although, as Hayek noted, the “part he played is little known beyond a rather narrow circle.” Hayek held that Cannan—together with Mises in Vienna and Frank Knight in Chicago—was responsible for the preservation and transmission of classical liberalism during the early decades of the twentieth century."

"As Hayek wrote, the role that Edwin Cannan has played in the transmission and development of liberalism is little known. The school of liberal thought he established at the London School of Economics has proven lasting and influential across disciplines. According to economic historian Henry Spiegel, Cannan was “the leading student of classical economics in the England of his time.” Murray Rothbard, who was an excellent historian of economic theory, had a very high opinion of Cannan’s work. Leading contemporary economic historian Denis O’Brien writes that “Cannan’s strong critical attitude and wide scholarship are of great value to economists.”"

"As proposals for estimating the social scarcity prices of natural resources remain contentious, economic accountants ignore them and governments remain wary of doing anything about them."

"In the quantitative models that appear in leading economics journals and textbooks, nature is taken to be a fixed, indestructible factor of production. The problem with the assumption is that it is wrong: nature consists of degradable resources."

"There are still people who discuss industrialization as... an alternative to agricultural improvement... this approach is without meaning in the West Indian Islands. There is no choice... between industry and agriculture. The islands need as large agriculture as possible... It is not ... that agriculture cannot continue to develop if industry is developed … the opposite is true: agriculture cannot... yield a reasonable standard of living unless new jobs are created off the land"

"I had no idea in 1933 what economics was, but I did well in the subject from the start, and when I graduated in 1937 with first class honours LSE gave me a scholarship to do a PhD in industrial economics."

"My interest in overhead costs was the structure of prices in situations where average cost per unit exceeds marginal cost. The Pareto rule was that price should equal marginal cost, but to apply this rule would bankrupt the firm. In practice, such situations oscillate between bankruptcy and monopoly, as in the airline industry today. The general inclination of economists in those cases was to enforce marginal pricing and subsidize firms to the extent of the differences between marginal and average cost. This was hardly practical, as an industry-wide policy. Neither could it be justified, as many taxpayers would be forced to pay for services that they did not use. If one started from the premise that those who use the service should pay for it, the problem reduced to how to spread the fixed costs among the users. Here I started from the railway principle of “charging what the traffic will bear” and linked up with the new price discrimination theory, as elaborated by Joan Robinson. Another aspect of overhead costs was the time dimension. Demand was not steady, but fluctuated. If the output could not be stored, there would be times of idle capacity, regular or irregular; how was the cost of this to be shared? I demonstrated that the correct approach to this problem was to treat the fixed investment as a producer in joint cost of different outputs at different times, each paying what it could bear, and subject to the sum of payments not exceeding total cost."

"A number of developing countries had been developing for a long time: Ceylon, for example, for a hundred years. Why was the standard of living of the masses still so low? One could understand this for much-exploited South Africa, but how for fairly enlightened Ceylon? The answer to both questions came by breaking an intellectual constraint. In all the general equilibrium models taught to me the elasticity of supply of labor was zero, so any increase in investment increases the demand for labor and raises wages. Instead, make the elasticity of supply of labor infinite, and my problems are solved. In this model growth raises profits because all of the benefits of advancing technology accrue to employers and to a small class of well-paid workers that emerges in an urban sea of a low-wage proletariat. In the commodities market an unlimited supply of tropical produce also gives the benefit of advancing technology to the industrial buyers, by the process already described."

"I make the point to remind you, if reminder be necessary, that the study of economic growth is still in its infancy. Countries rise up and fall, and we are not in a position to predict which ones will do best or worst over the next twenty years. This is equally true of developed and developing countries. Economics is good at explaining what has happened over the past twenty years, but when we turn to predicting the future it tends to be an essay in ideology."

"Looking backward over my life, it has been a queer mixture. I have lived through a period of transition and therefore know what it is like at both ends, even though the transition is not yet completed. I have been subjected to all the usual disabilities—refusal of accommodations, denial of jobs for which I had been recommended, generalized discourtesy, and the rest of it. All the same, some doors that were supposed to be closed opened as I approached them. I have got used to being the first black to do this or that, which gets to be more difficult as the transition opens up new opportunities. Having to be a role model is a bit of a strain, but I try to remember that others are coming after me, and that whether the door will be shut in their faces as they approach will depend to some small extent on how I conduct myself. As I said at the beginning, I had never intended to be an economist. My mother taught us to make the best of what we have, and that is what I have tried to do."

"Quickly gaining the attention of the leadership of colonized territories, he helped develop blueprints for the changing relationship between the former colonies and their former rulers. He made significant contributions to Ghana's quest for economic growth and the West Indies' desire to create a first-class institution of higher learning serving all of the Anglophone territories in the Caribbean."

"Cambridge theories of value and distribution themselves suffer from the very malady which they hope to cure: rhetoric apart, they are deeply infected by static, equilibrium analysis of maximizing economic agents, acting with full information in a world of perfect certainty, as in the orthodoxy they deplore. … If there is something wrong with neo-classical economics – as there may well be – the Cambridge theories share all of its weaknesses and practically none of its strengths."

"Joan Robinson's much-awaited textbook in “modern economics” perfectly exemplifies the typical attitude of Cambridge economists to micro-economics. The whole of traditional price theory is covered in one chapter … [some] prices are formed by conventional mark-ups on prime costs, the level of the mark-up itself being left unexplained. Apart from this chapter, the book is doggedly macro-economic in treatment … A striking omission from the book is any mention of the closely related concepts of externalities and public goods, which most economists would nowadays regard as the basic ingredients of “market failure” that has come to be fruitfully applied … to problems of pollution and congestion."

"Nothing is more difficult than to turn and entire discipline around, asking itself to jettison its own history over the last 200 years."

"Despite entries on socialism, socialist economics and market socialism, and biographical entries on Oskar Lange and Ludwig von Mises, the Socialist Calculation Debate, so crucial in the revival of general equilibrium theory and the rise of modern welfare economics in the 1930s, is nowhere discussed at length in The New Palgrave."

"The history of economic thought is irrepressible. It would survive even if it were banned … it would be carried on in secret in underground organizations. Many economists denigrate the history of economics as mere antiquarianism but, in fact, they have deluded ideas about the history of their own subject. After all, whenever anyone has a new idea in economics, whenever anyone hankers to start a new movement or school of thought, what is the first thing he or she does? Why, it is to rummage the attic of past ideas to establish an appropriate pedigree for the new departure. … Smith, Ricardo, Marx, Marshall and Keynes all drew on the history of economics to show that they had predecessors and forerunners; even Milton Friedman, when he launched the monetarist counterrevolution against Keynes, could not resist the temptation to quote David Hume over and again. The history of economic thought cannot be abolished and, were its study declared illegal, it would be studied in basements behind locked doors."

"Modern Austrian economists go so far as to suggest that the Walrasian approach to the problem of multimarket equilibrium is a cul de sac: if we want to understand the process of competition, rather than the equilibrium end-state achieved by competition, we must begin by discarding such static reasoning as is implied by Walrasian GE theory. I have come slowly and extremely reluctantly to the view that they are right and that we have all been wrong."

"The Lange idea of managers following marginal cost-pricing rules because they are instructed to do so, while the central planning board continually alters the prices of both producer and consumer goods so as to reduce their excess demands to zero, is so administratively naive as to be positively laughable. Only those drunk on perfectly competitive, static equilibrium theory could have swallowed such nonsense. ... in all the recent calls for reform of Soviet bloc economies, no one has ever suggested that Lange was of any relevance whatsoever. And still more ironically, Lange’s “market socialism” is, on its own grounds, socialism without anything that can be called market transactions."

"Modern economics is “sick”. Economics has increasingly become an intellectual game played for its own sake and not for its practical consequences. Economists have gradually converted the subject into a sort of social mathematics in which analytical rigor as understood in math departments is everything and empirical relevance (as understood in physics departments) is nothing. If a topic cannot be tackled by formal modelling, it is simply consigned to the intellectual underworld. To pick up a copy of American Economic Review or Economic Journal, not to mention Econometrica or Review of Economic Studies these days is to wonder whether one has landed on a strange planet in which tedium is the deliberate objective of professional publication. Economics was condemned a century ago as “the dismal science”, but the dismal science of yesterday was a lot less dismal than the soporific scholasticism of today."

"There were many Hayeks: Hayek, the political scientist; Hayek, the economist; Hayek, the philosopher of social science; Hayek, the psychologist. Even in these different roles, he played many parts."

"Hayek's career raises many puzzles and sometimes takes on the appearance of an endless trail of unresolved or only partly resolved issues."

"Why did his interest in the concept of spontaneous order and the history of the doctrine of unintended social consequences undergo very little development after the 1960s? All of his political writings are in fact amazingly repetitious, exploring a small number of big themes which, however, are not further refined or extended in new contexts. As organizing concepts, they held, I am convinced, enormous potentialities but nevertheless Hayek himself failed to realize them."

"Management tries to make the best use of the resources available."

"Difficulties arise when an attempt is made to acclimatize the theory to an alien environment and, in particular, to adapt the analysis of the expansion of the innovating multi-product, ‘flesh and blood’ organisations that businessmen call firms."

"A firm is more than an administrative unit; it is also a collection of productive resources the disposal of which between uses and over time is determined by administrative decision."

"If profits are a condition of successful growth, but profits are sought primarily for the sake of the firm, that is, to reinvest in the firm rather than to reimburse owners for the use of their capital or their 'risk bearing,' then, from the point of view of investment policy, growth and profits become equivalent as the criteria for the selection of investment programmes."

"There is no need to deny that other 'objectives' are often important—power, prestige, public approval, or the mere love of the game— it need only be recognized that the attainment of these ends more often than not is associated directly with the ability to make profits."

"Internal inducements to expansion arise largely from the existence of a pool of unused productive services, resources and special knowledge, all of which will always be found within any firm."

"A firm is essentially a pool of resources the utilization of which is organized in an administrative framework."

"Mrs Penrose was a senior economist in the Merrill/ Johns Hopkins research into the growth of firms and her book was much looked forward to. She does indeed make wise observations, out of her research and her wide reading, about various things which happen, or may happen, in a growing business... A theory of the growth of firms surely should involve generalizations about their economic environment, or, in other words, just those questions about the (equilibrium) structures of industries which the author rules out of court at the start."

"In recent years economists and historians have increasingly turned their attention to modern economic institutions. Economists such as Edward S. Mason, A. D. H. Kaplan, John Kenneth Galbraith, Oliver E. Williamson, William J. Baumol, Robin L. Marris, Edith T. Penrose, Robert T. Averitt, and R. Joseph Monsen, following the pioneering work of Adolph A. Berle, Jr., and Gardiner C. Means, have studied the operations and actions of modern business enterprise. They have not attempted, however, to examine its historical development, nor has their work yet had a major impact on economic theory. The firm remains essentially a unit of production, and the theory of the firm a theory of production."

"Edith Penrose has been one of the most significant economists of the second part of the twentieth century. Her contribution to the theory of the firm has reinvented and productively developed the classical tradition in economics. It has informed the currently dominant resource/knowledge-based theory of the firm. Penrose's contribution, however, extends to a great variety of areas, to include industry organization, strategic management, international business, human resource management, economics of innovation and technological change, history, methodology, macroeconomics, and much more."

"Prosperity, in any meaningful sense of the term, is about the quality of our lives and relationships, about the resilience of our communities and about our sense of individual and collective meaning."

"Long before we run out of oil, coal and gas, we will have to stop extracting them from the ground and burning them, if dangerous climate change is to be averted."

"The modern economy is structurally reliant on economic growth for its stability. [...] But question it we must. [...] No subsystem of a finite system can grow indefinitely – at least in physical terms. Economists have to be able to answer the question of how a continually growing economic system can fit within a finite ecological system. The only answer available is that growth in dollars must be 'decoupled' from growth in physical throughputs and environmental impacts. But [...] this hasn't so far achieved what's needed. There are no prospects for it doing so in the immediate future. And the sheer scale of decoupling required to meet the limits set out here (and stay within them in perpetuity while the economy keeps on growing) staggers the imagination. In short, we have no alternative but to question growth. The myth of growth has failed us."

"We must establish the ecological bounds on human activity. We must tackle the systemic inequalities which undermine social progress. We must fix the illiterate economics of relentless growth [...] A different economics is achievable. A better and fairer social logic lies within our grasp."

"With much of the world in turmoil, calling for higher economic growth is every politician's comfort blanket of choice. But Tim Jackson compellingly urges those politicians to give up their comfort blanket, to re-think our continuing dependence on economic growth, and to start preparing – urgently – for a world where such growth is no longer viable as its environmental cost massively exceeds its benefits."

"Nuclear weapons are obsolete in an era of asymmetric warfare and cyber warfare and have no placed in a European defence policy for the 21st century. Britain and France have ignored their obligations under the Treaty on the Non-Proliferation of Nuclear Weapons for far too long."

"UKIP have now crossed a line in terms of what is acceptable behaviour in a democratic society."

"The crucial thing about the transition to a carbon-neutral economy is social justice. If you think about why people voted for Brexit, it’s because they felt they were being left behind. Their resentment is being attached to climate denialism, by very irresponsible politicians who whip up resentment caused by austerity. They connect that and say ‘Now you’re telling me I can’t have my car’. But that’s not what we’re saying at all."

"Although President Trump operates like an authoritarian leader, he is actually subject to a system of checks and balances, meaning that Congress, rather than Trump, will decide what sort of trade deal we will have with the US if we proceed with Brexit."

"The stakes couldn’t be higher. The burning of the Amazon places the planet on red alert. Bolsonaro is encouraging this torching of the forest to appease his agricultural paymasters so they can use the land for beef cattle and soya. He is guilty of ecocide and politicians across the globe must stand up to this environmental criminal."

"The mob currently in power are determined to crash us out of the EU on October 31 and will sacrifice everything at the altar of new trade deals. Food safety standards, consumer protections, animal welfare standards will all be ditched if it means securing a trade deal with the US. This will leave our farmers concerned not so much with tackling our climate emergency but with survival against an onslaught from cheap imports."

"You should not be able to be thrown out of your home of 30 years because you can’t find documents you never knew you would have to keep"

"Now is not the time to campaign to rejoin but we must keep the dream alive, especially for young people who are overwhelmingly pro-European. I hold in my heart the knowledge that one day I will be back in this [the European Parliament] chamber, celebrating our return to the heart of Europe."

"Extreme poverty should not exist, period. The fact that up to 17 percent of the world population lives in extreme poverty today (according to Robert Allen’s data on cost-of-basic-needs poverty) should be understood as an indictment of our economic system.8 It is a sign that severe social dislocation remains institutionalized in the capitalist world economy. Yes, the prevalence of extreme poverty is lower today than it was at the height of the colonial period, but this is not sufficient reason for celebration. The colonial high-water mark was an effect of capitalist policy and should never have existed."

"Capitalism relies on maintaining an artificial scarcity of essential goods and services (like housing, healthcare, transport, etc), through processes of enclosure and commodification. We know that enclosure enables monopolists to raise prices and maximize their profits (consider the rental market, the US healthcare system, or the British rail system). But it also has another effect. When essential goods are privatized and expensive, people need more income than they would otherwise require to access them. To get it they are compelled to increase their labour in capitalist markets, working to produce new things that may not be needed (with increased energy use, resource use, and ecological pressure) simply to access things that clearly are needed, and which are quite often already there."

"The rise of capitalism, rather than delivering improvements in human welfare, was associated with plummeting wages, a reduction in human stature, and a marked upturn in the incidence of famine. Progress did not begin until the 1880s in the European core, and the 20th century in the European periphery, the latter roughly a century later than the standard narrative suggests."

"While the precise number of deaths is sensitive to the assumptions we make about baseline mortality, it is clear that somewhere in the vicinity of 100 million people died prematurely at the height of . This is among the largest policy-induced mortality crises in human history. It is larger than the combined number of deaths that occurred during all famines in the Soviet Union, Maoist China, North Korea, Pol Pot’s Cambodia, and ’s Ethiopia."

"If the whole population were to consume and emit like Ireland and Switzerland, we would be living on a dead planet right now."

"(MMT) is getting a lot of attention these days, thanks in large part to the excellent work of and Nathan Tankus, two of the movement’s most effective communicators. Over the past few weeks a number of people inspired by their work have asked me whether there is scope for thinking about from a MMT perspective. My answer: definitely. In fact, the two belong together."

"Prior to colonisation, most people lived in subsistence economies where they enjoyed access to abundant commons – land, water, forests, livestock and robust systems of sharing and reciprocity. They had little if any money, but then they didn’t need it in order to live well – so it makes little sense to claim that they were poor. This way of life was violently destroyed by colonisers who forced people off the land and into European-owned mines, factories and plantations, where they were paid paltry wages for work they never wanted to do in the first place."

"We are sleepwalking into a mass extinction event – the sixth in our planet's history, and the first to be caused by human economic activity. The rate of extinction is now 1,000 times faster than before the Industrial Revolution."

"A few years ago, virtually no one was talking about this . . . everyone just assumed that the web of life would always be intact. Now the situation is so severe that the United Nations has set up a special task force to monitor it: the (IPBES). In 2019, it published its first – a groundbreaking assessment of the planet's living species, drawing on 15,000 studies from around the world and representing the consensus of hundreds of scientists. It found an accelerating rate of global , unprecedented in human history."

"It was only with the rise of capitalism over the past few hundred years, and the breathtaking acceleration of industrialization from the 1950s, that on a planetary scale things began to tip out of balance."

"Capitalism rose on the back of organized violence, mass impoverishment, and the systematic destruction of self-sufficient subsistence economies. It did not put an end to serfdom; rather, it put an end to the progressive revolution that had ended serfdom. Indeed, by securing virtually total control over the means of production, and rendering peasants and workers dependent on them for survival, capitalists took the principles of serfdom to new extremes. People did not welcome this new system with open arms; on the contrary, they rebelled against it. The period 1500 to the 1800s, right into the Industrial Revolution, was among the bloodiest, most tumultuous times in world history."

"The same process of enclosure and forced played out over and over again during the period of European colonization – not just under the British but under the Spanish, Portuguese, French and Dutch as well ... In all these cases scarcity was created, purposefully, for the sake of capitalist expansion."

"It's no wonder that we react so nonchalantly to the ever-mounting statistics about the crisis of mass extinction. We have a habit of taking this information with surprising calm. We don't weep. We don't get worked up. Why? Because we see humans as fundamentally separate from the rest of the living community. Those species are out there, in the environment. They aren't in here; they aren't part of us. It is not surprising that we behave this way. After all, this is the core principle of capitalism: that the world is not really alive, and it is certainly not our kin, but rather just stuff to be extracted and discarded – and that includes most of the human beings living here too. From its very first principles, capitalism has set itself at war against life itself."

"Of course, we also have to think about the role of population going forward. The more the , the more difficult this challenge will be. As we approach this question, it's crucial - as always - that we focus on underlying structural drivers. Many women around the world do not have control over their bodies and the number of children they have. Even in liberal nations women come under heavy social pressure to reproduce, often to the point where those who choose to have fewer or no children are interrogated and stigmatised. Poverty exacerbates these problems considerably. And of course capitalism itself creates pressures for population growth: more people means more labour, cheaper labour, and more consumers. These pressures filter into our culture, and even into national policy: countries like France and Japan are offering incentives to get women to have more children, to keep their economies growing."

"In the absence of more consumers, capital finds ways to get existing consumers to consume more. Indeed, the dominant story for the past few hundred years: the growth rate of material use has always significantly outstripped the growth rate of the population."

"is not about reducing GDP. It is about reducing the material and energy consumption throughout the economy to bring it back into balance with the living world, while distributing income and resources more fairly, liberating people from needless work, and investing in the publics goods that people need to thrive. It is the first step toward a more ecological civilisation. Of course, doing this may mean that GDP grows more slowly, or stops growing, or even declines. And if so, that's okay, because GDP isn't what matters. Under normal circumstances, this might cause a recession. But a recession is what happens when a growth-dependent economy stops growing. It's a disaster. Degrowth is completely different. It is about shifting to a different kind of economy altogether – an economy that doesn't need growth in the first place. An economy that's organised around human flourishing and ecological stability, rather than around the constant accumulation of capital."

"Some critics have claimed that degrowth is nothing more than a new version of austerity. But in fact exactly the opposite is true. Austerity calls for scarcity in order to generate more growth. Degrowth calls for abundance in order to render growth unnecessary. If we are to avert climate breakdown, the environmentalism of the twenty-first century must articulate a new demand: a demand for radical abundance."

"From this perspective, I cannot help but feel that degrowth is, ultimately, a process of decolonisation. Capitalist growth has always been organised around an expansionary territorial logic. As capital pulls ever-increasing swathes of nature into circuits of accumulation, it colonises lands, forests, seas, even the atmosphere itself. For 500 years, capitalist growth has been a process of enclosure and dispossession. Degrowth represents a reversal of this process. It represents release. It represents an opportunity for healing, recovery and repair."

"When I set out to write this book, I worried about using degrowth as a central frame. It is only a first step, after all. But as I think about the journey we've been on, I wonder if it is also more than that. Degrowth provides a way for us to approach this challenge. It stands for de-colonisation, of both lands and peoples and even our minds. It stands for the de-enclosure of commons, the decommodification of public goods, and the de-intensification of work and life. It stands for the de-thingification of humans and nature, and the de-escalation of ecological crisis. Degrowth begins as a process of taking less. But in the end it opens up whole vistas of possibility. It moves us from scarcity to abundance, from extraction to regeneration, from dominion to reciprocity, and from loneliness and separation to connection with a world that's fizzing with life."

"Today, some 4.3 billion people – more than 60 per cent of the – live in debilitating poverty, struggling to survive on less than the equivalent of $5 per day. Half do not have access to enough food. And these numbers have been growing steadily over the past few decades. Meanwhile, the wealth of the very richest is piling up to levels unprecedented in human history. As I write this, it has just been announced that the eight richest men in the world have as much wealth between them as the poorest half of the world's population combined."

"The plunder of Latin America left in its wake. In India, 30 million died of . Average living standards in India and China, which had been on a par with Britain before the colonial period, collapsed."

"From his base on , the island shared today by Haiti and the Dominican Republic, he forced the local inhabitants – the – to bring him a certain quantity of gold every three months. Those who failed to do so would have their hands chopped off or were hunted down and killed. Men were forced to spend their lives in mines, stripping the mountains in search of gold. Up to a third of workers died every six months. Within two years of the Spanish invasion, some 125,000 people had been killed - half the island's population. Most of the remaining inhabitants of Hispaniola were forced into slave labour on plantations. A few decades later, only a few hundred Arawaks remained alive."

"Economists often speculate that the failed to develop because of a lack of capital. But there was no such lack. The wealth that might have provided the capital for development (precious metals in Latin America and surplus labour in Africa) was effectively stolen by Europe and harnessed to the service of Europe's own development. The global South could theoretically have developed as Europe did were it not for the plunder of its resources and labour, and were it not for the fact that it was forced by Europe to supply raw materials while importing manufactured goods. Whether or not they would or should have done so is another matter, of course - after all, much of European-style development required violence towards other lands and other peoples. But the point remains: it is impossible to examine the economic growth of the West without looking at the base on which it drew."

"When the CIA made clear that they would back a coup, General - who was upset with President Sukarno for supporting policies that undermined the military's power - offered to lead it. In 1965, with the aid of weapons and intelligence from the United States, Suharto between 500,000 and 1 million of Sukarno's supporters in one of the worst mass murders of the 20th century. By 1967, Sukarno's base had been either eliminated or intimidated into submission, and Suharto took control of the country. His military regime - which ruled until 1998 - was open to Western corporate interests."

"As it turns out, making rich people richer doesn't make the rest of us richer. Nor does it stimulate economic growth, which is the sole justification of . In fact, quite the opposite is true: since the onset of neoliberalism, the rich countries of the have seen growth rates fall from an average of 3.5 per cent during the 1960s and 1970s down to an average of 2 per cent during the 1980s and 1990s. As the numbers show, neoliberalism has failed as a tool for - but it has worked brilliantly as a tool for restoring power to the wealthy elite."

"If we dig behind the rhetoric, it becomes clear that Western support for right-wing coups had little to do with Cold War ideology, and certainly nothing to do with promoting democracy (quite the opposite!); the goal, rather, was to defend Western economic interests. The veil of the Cold War has obscured this blunt fact from view."

"People commonly think of neoliberalism as an ideology that promotes totally free markets, where the state retreats from the scene and abandons all interventionist policies. But if we step back a bit, it becomes clear that the extention of neoliberalism has entailed powerful new forms of . The creation of a global 'free market' required not only violent coups and dictatorships backed by Western governments, but also the invention of a totalizing global bureaucracy – the World Bank, the IMF, the WTO and bilateral s – with reams of new laws, backed up by the of the United States. In other words, an unprecedented expansion of state power was necessary to force countries around the world to liberalize their markets against their will. As the has known ever since the in 1842, when British gunboats invaded China in order to knock down China's , free trade has never actually been about freedom. On the contrary, as we have seen, free trade has a tendency to gradually undermine national sovereignty and ."

"To get a sense of how extreme is: if we all were to live like the average citizen of the average high-income country, we would require the ecological capacity equivalent of 3.4 earths."

"Scientists tell us that up to 140,000 species of plants and animals are disappearing each year due to our of the Earth's ecosystems. This rate of extinction is 100 to 1,000 times faster than before the Industrial Revolution - so fast that scientists have classed this as the event in the planet's history, with the last one having occurred some 66 million years ago."

"was intended to be a war-time measure, which is why it is so single-minded – almost even violent. It tallies up all money-based activity, but it doesn't care whether that activity is useful or destructive."

"While global real GDP has nearly tripled since 1980, the number of people living in poverty, below $5 per day, has increased by more than 1.1 billion. Why is this? Because past a certain point, GDP growth begins to produce more negative outcomes than positive ones – more than wealth."

"In light of this, perhaps we should regard countries like Costa Rica not as underdeveloped, but rather as appropriately developed. We should look at societies where people live long and happy lives at low levels of income and consumption not as backwaters that need to be developed according to Western models, but as exemplars of efficient living – and begin to call on rich countries to cut their excess consumption."

"Rather than submitting to plans handed down by central governments in distant capitals, people are using to make decisions about their resources and environments, seeking regeneration and harmony with their surrounding ecology. In the Middle East, communities in the mountains of northern Iraq and in in Syria are experimenting with similar ideas."

"The Reagan and Thatcher administrations eventually came to power on platforms that promised to enhance individual freedoms by liberating capitalism from the 'shackles' of the state – reducing taxes on the rich, cutting state spending, privatizing utilities, deregulating financial markets, and curbing the power of unions. After Reagan and Thatcher, these policies were carried forward by putatively progressive administrations such as Clinton's in the USA and Blair's in Britain, thus sealing the new economic consensus across party lines."

"The growing economic power of the richest percentiles translated directly into increased political power, as they gained new influence over elections. In the USA, the collapse of as a result of neoliberal reforms has meant that corporations are able to outcompete labour in campaign financing. Their position was further strengthened in 2010, when the Supreme Court ruled in that corporations have a constitutional right to spend unlimited amounts of money on political advertising as an exercise of 'free speech'."

"In their "wide portfolio" of potential actions, the various paths proposed by the IPCC all rely on unproven carbon capture technologies, to enable production and economic growth to continue. Ecological economists point out that the IPCC ignores a much simpler and more obvious alternative: that we find ways to slow or reverse economic growth in the overconsuming countries. "The principle of reducing energy and resource use represents a safer and more ecologically coherent approach to climate mitigation," conclude Jason Hickel and his coauthors. But, thus far, most policy proposals have studiously ignored this option."

"Everyone in 21st-century Britain should be able to afford the basics they need to avoid poverty. It’s shameful that instead millions of families are on the edge of destitution. In recent years, we’ve made little progress in tackling the causes of poverty: low wages, an inadequate social security system and sky-rocketing housing costs. As the commission shows, the solutions are there to tackle these issues. What we need now is the collective will."

"I’ve worked in a lot of different organizations, and that helps because you often have seen a similar problem somewhere else. Now, organizations all have their different cultures and histories, but it helps to have seen a similar problem. It makes you realize, “I can figure this one out, maybe, or there is a way to solve this puzzle.” The other thing is I’ve worked in a couple of organizations that manage crises, like the International Monetary Fund, or when I was with the Department for International Development, we managed a lot of humanitarian crises around the world. So that teaches you to be calm under stress, and I suspect that skill might be useful in the years ahead."

"Obviously, it’s a great thing that women are increasingly in leadership roles in top universities. I guess I just sort of feel like it’s about time. It’s my honest opinion. I mean, I don’t wake up every morning thinking, “Oh, I’m the first woman president of Columbia.” You just kind of get on with the job. So I don’t really think about it very much every day. But I think it’s great."

"The idea that you are successful because you are smart and hardworking is pernicious and wrong, because it means everyone who is unsuccessful is stupid and lazy."

"Technology because it has changed jobs and lots of people haven’t benefited. They have been left behind. They don’t have the skills and they are not in the right place, with the result that their prospects are poor. And the way our whole social contract was predicated on women looking after the young and the old for free – now there are more women going to university than men, globally, not just in the UK, and they are employed, and the cost of them not working is really high, so you want them to work. Yet we haven’t found a way to adjust – a way to look after the young and old without women providing free labour."

"I am not just a person who wants to raise taxes and share out more. I want everyone to pay their fair share of taxes and invest more in each other"

"I never had a long term plan. I think a career is not like climbing a ladder – it’s more like climbing a tree. Focusing on climbing the next step on the ladder is a mistake. Sometimes when you are climbing a tree, it’s not linear - you might move sideways, which then helps you get up to the next level."

"I strongly believe that talent is spread evenly around the world, but opportunity is not."

"In the past, the middle class could count on a conveyor belt of higher education leading to university, leading to public sector employment. But now, that conveyor belt has stopped."

"I think at the moment we really are on the cusp of potentially a major change, and I'm quite optimistic about not just all the women we see rising to the top, but also all the young women coming up who will fill those jobs in the future toward gender parity."

"It is not okay to cast civility aside because the moment is too heated. We must cultivate a university culture that pushes back on the forces that seek to divide us. A culture that encourages empathy, not personal attacks on individuals or identities. Learning to speak, and listen with respect, that is a cherished Columbia value."

"We are living in a time of great divisions in our societies – between rich and poor, amongst different races and religions, and across fundamental values and principles. We see the rise of truculent nationalism and troubling fault lines in democracies across the world at a time when our most pressing challenges—such as climate change—require more international agreement. We are on the cusp of many technological revolutions in fields like artificial intelligence, neuroscience, quantum and nano technologies. At the same time, we are aging rapidly and coping with mental health challenges and worsening wellbeing."

"So let us forge a new social contract with society and with each other that will make us an exemplar of a great university in the 21st century. We will construct this on a foundation built by the wisdom of our past and forge new frontiers of scholarship and service. The legacy of the Columbians who came before will live on through us, as our legacy will live on through future generations, nurtured by the commitments we reaffirm here today."

"When I was inaugurated as Columbia’s 20th president on October 4, 2023, I called for strengthening the bond between universities and society through a recommitment to academia’s contribution to the common good. The horrors of the Hamas attack three days later, the ensuing war with Israel and the tragic loss of civilian lives in Gaza have tested that bond in unimaginable ways. I have seen the campus engulfed in tensions and divisions deepened by powerful external forces."

"The wave of protests, encampments, and building takeovers has since spread across the US and around the world. Whatever one thinks of the response of university leaders — denouncing hurtful rhetoric, enforcing rules and discipline, and summoning police to restore order — these are actions, not solutions. All of us who believe in higher education must now engage in serious soul searching about why this is happening. Only then can universities recover and begin to realise their potential to heal and unify."

"From my perspective, there are two issues at stake. First, we must do a better job of defining the boundaries between the free speech rights of one part of our community and the rights of others to be educated in a place free of discrimination and harassment."

"Free speech is the bedrock of academic inquiry and excellence. The threats it faces are real — many places ban books, curricula are sometimes determined by politicians rather than educational experts and scholars are at serious risk in many countries."

"For me, the lesson is clear. If colleges and universities cannot better define the boundaries between free speech and discrimination, government will move to fill that gap, and in ways that do not necessarily protect academic freedom. Just as our predecessors fought for desegregation and the admission of women, we need to create an educational environment where we fight all forms of prejudice, including against Arabs, Jews and Muslims."

"Rather than tearing ourselves apart, universities must rebuild the bonds within ourselves and between society and the academy based on our shared values and on what we do best: education, research, service and public engagement."

"Over the last few months, we have been patient in tolerating unauthorized demonstrations, including the encampment. Our academic leaders spent eight days engaging over long hours in serious dialogue in good faith with protest representatives. I thank them for their tireless effort. The University offered to consider new proposals on divestment and shareholder activism, to review access to our dual degree programs and global centers, to reaffirm our commitment to free speech, and to launch educational and health programs in Gaza and the West Bank. Some other universities have achieved agreement on similar proposals. Our efforts to find a solution went into Tuesday evening, but regrettably, we were unable to come to resolution."

"Columbia has a long and proud tradition of protest and activism on many important issues such as the Vietnam War, civil rights, and the anti-apartheid struggle in South Africa. Today’s protesters are also fighting for an important cause, for the rights of Palestinians and against the humanitarian tragedy in Gaza. They have many supporters in our community and have a right to express their views and engage in peaceful protest."

"It is going to take time to heal, but I know we can do that together. I hope that we can use the weeks ahead to restore calm, allow students to complete their academic work, and honor their achievements at Commencement."

"We also must continue with urgency our ongoing dialogue on the important issues that have been raised in recent months, especially the balance between free speech and discrimination and the role of a university in contributing to better outcomes in the Middle East. Both are topics where I hope Columbia can lead the way in new thinking that will make us the epicenter, not just of protests, but of solutions to the world’s problems."

"Our values—as well as our duties under civil rights laws—compel us to condemn hate and to protect every member of our community from harassment and discrimination. Antisemitic language and actions are unacceptable and calls for violence are simply abhorrent."

"I know that many of our Jewish students, and other students as well, have found the atmosphere intolerable in recent weeks. Many have left campus, and that is a tragedy. To those students and their families, I want to say to you clearly: You are a valued part of the Columbia community. This is your campus too. We are committed to making Columbia safe for everyone, and to ensuring that you feel welcome and valued."

"Additionally, the University offered to convene a faculty committee to address academic freedom and to begin a discussion on access and financial barriers to academic programs and global centers. The University also offered to make investments in health and education in Gaza, including supporting early childhood development and support for displaced scholars. There are important ideas that emerged from this dialogue, and we plan to explore pursuing them in the future."

"But we must take into account the rights of all members of our community. The encampment has created an unwelcoming environment for many of our Jewish students and faculty."

"Like you, I am new to this campus, having started as Columbia’s 20th president in July. And I say as someone who has experienced change once or twice in my life, beginnings are exciting, and hard, and everything in between. They introduce us to new people and ideas, challenge us to adapt to new situations, and open our eyes to new ways of thinking about the world and our place within it."

"Universities and institutions of higher education have existed for millennia, stretching back to the schools of the ancients in places like China, Egypt, Greece, and India. There is something special, even magical, about the tradition of students and scholars coming together to create these unique environments of learning."

"Today, the critical questions we ask include, “What are you going to do with the training you’ve acquired?” and “How are you going to use the research you’ve conducted for the betterment of society?” Look behind me at the inscription on Low Library which says we want to be an institution that is “cherished by generation after generation for the advancement of the public good."

"I am honoured to speak today in the country of my birth, a country that has been a cradle of human civilization for millennia, on a topic that will determine the future of human civilization and whether it lasts for more millennia. I am an economist who has worked on development and environment issues for several decades and I wanted to speak to you about the economy of the future."

"But before doing that, let me start with a story from the past. Over 3000 years ago a different kind of climate change caused by volcanic eruptions and changing weather patterns resulted in persistent droughts that caused famines and political unrest in ancient Egypt. The pharaohs of the Ptolemaic dynasty such as Cleopatra went to great lengths to adapt – transferring grain from productive regions to drought plagued areas, opening up grain stores, crossbreeding cattle to develop more heat resistant animals, and providing tax relief. These foresighted efforts managed to prolong the Egyptian empire for a half century longer but ultimately one of the greatest empires the world has ever known collapsed because of the effects of climate change. The difference between then and now is that we are the cause of today’s climate change, and we have the means to stop it by changing our economy."

"What could the economy of the future look like? We have a choice. It could be one based on familiar technologies, markets and institutions. We could continue with polluted air and water where our children suffer from respiratory diseases; where our economies are struck by frequent shocks caused by unpredictable weather events which cause catastrophic losses; where people have to move across borders as their livelihoods are destroyed by rising sea levels or persistent droughts and rising temperatures; and one where the natural world continues to diminish."

"I can also paint a different picture of the economy of the future. One in which we make the needed investments and created cities in which we can move, breathe, and thrive. One in which the food we eat regenerates the earth rather than depletes it. Where our economies continue to grow and especially in poor countries, living standards continue to rise, where this growth is greener, more stable and where human well-being is enhanced through co-existence with nature."

"We know we are in difficult economic times with war, recession, and inflation. Where will the money for this investment come from? In tough times, we need to use our limited resources most efficiently. Given the history of climate change, we need an appropriate balance between responsibility and resources."

"Africa is responsible for only 1% of emissions but will be the hardest hit by climate change. That cannot be right. At the same time, many African countries are rich in sunshine, wind, rivers and forests. With support, they could leapfrog the dirty energy systems of the past and, if we create a better carbon market, provide a huge source of income for countries rich in carbon sinks."

"So, the economy of the future is our choice. We face a classic intertemporal investment problem – incur some investment costs now with high returns later or opt for inaction or not enough action but incur very high costs and risks later. Even if you do not take into account future generations (which makes these arguments much, much stronger), it seems to me the choice is clear. Climate change and biodiversity loss are here, and we are already suffering the consequences. Unlike the Pharaohs, we can overcome this climate change by choosing a different kind of economy for the future."

"The benefits of open capital markets are clear. They facilitate the flow of finance to where it would be most productive and help ensure global resources are allocated most efficiently. They allow savers and investors to diversify portfolios beyond national borders, and they provide a greater range of funding sources to fast growing economies and businesses"

"The most obvious way to take international considerations into account is by treating risks emanating from abroad as an important input when setting domestic macroprudential policy."

"Reciprocity also helps address the old problem of asymmetric adjustment of global imbalances. Suppose a deficit country wishes to contain the supply of credit and build resilience in its financial system by raising the buffer. If a surplus country whose banks are lending to the deficit country reciprocates, its banks should be incentivised to lend less to the deficit economy, and more to their domestic economy. That should increase domestic demand in the surplus country, and hence demand for deficit country exports, reducing the overall level of imbalances."

"The growth of market-based finance and asset management is creating new sources of funding, adding welcome diversity to the financial system, particularly for emerging markets. And in some ways these flows are less risky – for example the average maturity of international securities issued by emerging markets is 10 years, reducing rollover risk and exposure to a sudden flight of capital."

"There are many ways in which co-operation on macro-prudential policies could be deepened further. Options which could warrant further investigation range from formalising the exchange of information, to frameworks for reciprocity for tools beyond the countercyclical capital buffer, to common stress test scenarios and risk assessment that are used across the world."

"Steering Columbia University through the choppy waters of anti-Israel student protests was never going to be easy for Minouche Shafik, a member of the UK House of Lords who took over as president of the university in New York after a period of relative calm running the London School of Economics.[..] Shafik’s decision to call in the police to break up a student protest camp on the university lawn appalled many on both sides of the dispute. Protesters and their supporters among the academic community complained about police brutality and the targeting of pro-Palestinian campaigners, while Republican defenders of Israel accused Shafik of failing to act quickly enough."

"There was always a wage at which all these horses could have remained employed. But that wage was so low that it did not pay for their feed."