His 1944 warning that planning leads to tyranny became free-market scripture.
Friedrich August von Hayek was born in Vienna in 1899 and trained in law and economics at the University of Vienna, where he studied under Ludwig von Mises. In 1931, he moved to the London School of Economics, and by the mid-1930s, he was one of the most prominent critics of John Maynard Keynes’s argument that governments should manage economic demand.1
In 1944, Hayek published The Road to Serfdom, arguing that government economic planning, even when well-intentioned, would inevitably erode individual liberty and lead toward authoritarianism.2
The book was a sensation. Reader’s Digest published a condensed edition that reached millions of Americans. Hayek went on a U.S. lecture tour in 1945 that drew large crowds.3 The argument attracted supporters and critics in roughly equal measure, but it planted an intellectual foundation that would bear political fruit decades later.
In 1947, Hayek founded the Mont Pelerin Society, a network of economists, philosophers, and historians who shared his skepticism of government intervention. Members included Milton Friedman, Karl Popper, and Ludwig von Mises.4
Hayek’s ideas found their most powerful political expression in the late 1970s and 1980s. Margaret Thatcher reportedly slammed a copy of Hayek’s The Constitution of Liberty on a table during a policy meeting and declared, "This is what we believe."5 Ronald Reagan cited Hayek as a key influence on his economic thinking. The wave of deregulation, privatization, and union-limiting legislation that followed in both countries drew directly from Hayek’s framework.6
Hayek shared the Nobel Prize in Economics in 1974 with Gunnar Myrdal, a Swedish economist whose views were nearly opposite to his own. The committee cited Hayek’s work on the theory of money and economic fluctuations. He died in Freiburg, Germany, in 1992, at the age of ninety-two.7