There has always been a tendency for people on the centre and left of politics to belittle the achievements of Friedrich Hayek, the great Austrian-British economist. He is usually regarded as a right wing ideologue. This is a pity, because his work is rich in insight, and has a lot to teach those who do not share his preconceptions.
His reputation as an ideologue was established almost as soon as he arrived in England to take up a chair in economics at the LSE in 1931. Lionel Robbins recruited him to help counter the influence of Keynes. He did cross swords academically with Keynes and Sraffa over monetary theory, but surprisingly made no public response to the publication of Keynes’s General Theory of Employment, Interest, and Money, the book which launched the Keynesian revolution. Hayek later said he he was reluctant to spend time criticising Keynes when Keynes changed his mind so often.
During the war, he began work on the book that became The Road to Serfdom. Published in 1944, when Hayek was 45, it made a huge impact as a radical attack on the new social democratic consensus. Its success gave him a public prominence which enabled him to spend the rest of his life actively reviving and restating the principles of classical liberalism.
He faded from attention in the 1950s and 1960s, but several strands of the new right acknowledged Hayek as their inspiration in the 1970s and 1980s. Thatcher made him a Companion of Honour. He continued to be vilified, however, by many social and political theorists for his argument that even the mildest measures of state intervention risked pushing a society towards totalitarianism. It is true that Hayek saw the world in simplified terms, contrasting a tradition of true liberalism, running through Smith, de Tocqueville, and Acton, with the false liberalism of Bentham, Mill and the New Liberals. But his ideas have recently attracted attention in the social sciences, especially his concept of evolution and spontaneous order, and his theory of knowledge.
Hayek revived the anti-rationalist, sceptical tradition of the Scottish political economists, Adam Smith and Adam Ferguson, and insisted on its importance for understanding social evolution and change. In this tradition, order arises spontaneously through the interactions of individual agents. Certain institutions like language, law, and the market are established in this way. Not designed by anyone, they occur in an unplanned and…