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IPFS News Link • Economics: Austrian

Remembering Hayek's Remarkable Nobel Lecture

•, Lawrence W. Reed

Thirty-two years ago this month—on March 23, 1992—Austrian economist, political philosopher, and Nobel laureate Friedrich August von Hayek passed away at age 92. It is not upon that sad occasion I dwell here, but rather, on the 50th anniversary later this year of his acceptance speech at the Nobel ceremonies in Stockholm, Sweden. What a glorious moment it was!

From 1969, when the first Nobel in Economic Science was awarded, until Hayek's win in 1974, I was among many who yearned for the day when a genuine friend of freedom and free markets would be so honored. It seemed every year that the award went to someone for attempting to quantify the unquantifiable, to count the angels on a pinhead, or to whitewash statism. We despaired, as Adam Smith surely did from the grave.

Then in 1974, Stockholm fired a shot across the Establishment bow by recognizing Hayek. Two years later, Milton Friedman won the prize. In the decades since, more economists friendly to markets claimed it—including such luminaries as George Stigler, James Buchanan, Ronald Coase, Gary Becker, Robert Lucas, Robert Mundell, Vernon Smith, Elinor Ostrom, and Angus Deaton.

Even so, the Nobel Committee in 1974 couldn't bring itself to give that year's Economics award to Hayek only. It "balanced" him by also bestowing one on the Swedish socialist Gunnar Myrdal—whose arrogance showed itself when he turned his nose up at Hayek. The latter was always gracious; if he harbored uncomplimentary views of the crackpot Myrdal, he never said so in public. The smug, state-worshiping Swede argued the prize should be abolished if central planning skeptics like Hayek and Friedman were given it.

All these years later, almost nobody remembers Myrdal, and fewer still ever quote him. Practically no one recalls a good book or a memorable phrase he penned. His own country, Sweden, turned away from his naïve presumptions and now boasts the 9th freest economy in the world.

Hayek, however, is cited somewhere every day, if not every hour. The Road to SerfdomThe Constitution of LibertyThe Denationalization of Money, and The Use of Knowledge in Society are four of his many works that millions around the world have either read or heard of. I could take a nice vacation if I claimed fifty bucks for every instance in which I have quoted just this one of many Hayek gems: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."

The great man from Vienna richly deserves to be remembered. He was erudition wrapped with eloquence and neatly packaged in elegance. His contributions to social sciences are monumental. He will still be quoted a century from now. But in the meantime, allow me to share a few excerpts from his Nobel acceptance speech, "The Pretence of Knowledge," delivered on December 11, 1974, in Stockholm.