Friedrich August von Hayek: 1899–1992 — Summary

Rothbard’s piece is a brief intellectual obituary and evaluative essay, not a full biography or edited collection. Its scope is Hayek’s place in the “Mises-Hayek era”: his early greatness as Mises’s disciple, his public role in sustaining anti-socialist and anti-Keynesian economics, and Rothbard’s later disappointment with Hayek’s philosophical turn.

The death of F.A. Hayek at the age of 92 marks the end of an era, the Mises-Hayek era.

The central thesis is double-edged. Rothbard honors Hayek as the most important transmitter of Misesian Austrian economics to the English-speaking world, especially in business-cycle theory, while arguing that Hayek’s enduring achievement lies there rather than in his later social philosophy. The essay begins with Hayek’s conversion from Fabian socialism under the impact of Mises’s Socialism, his participation in Mises’s Vienna seminar, and his appointment as first director of the Austrian Institute for Business Cycle Research. Rothbard frames Hayek’s early theoretical contribution as an elaboration, not an independent founding, of Mises’s monetary theory of the cycle.

In particular, Hayek elaborated Mises's brilliant business cycle theory, which demonstrated that boom-bust cycles are caused, not by mysterious defects inherent in industrial capitalism, but by the unfortunate inflationary bank credit expansion propelled by central banks.

The structure then moves to London in the 1930s, where Hayek’s lectures became Prices and Production and where, in Rothbard’s telling, he briefly captured the commanding heights of English economics. Hayek’s importance here is institutional as much as doctrinal: he carried the Austrian account of capital, money, and cycles into the London School of Economics and challenged Keynes before Keynesianism became dominant. Rothbard stresses Hayek’s demolition of Keynes’s Treatise on Money, but also presents the absence of a comparable attack on The General Theory as a decisive lost opportunity. Once Keynesianism triumphed, Hayek and Mises became the last major holdouts.

Of all the Misesians who had been nurtured in Vienna and London, by the end of the 1930s only Mises and Hayek were left, as indomitable champions of the free market, and opponents of statism and deficit spending.

Rothbard next links Hayek’s anti-socialist work to wartime crisis. The Road to Serfdom appears as an intervention written when socialism, communism, and planning seemed historically ascendant. Rothbard emphasizes its argument that collectivist politics selects for coercive and unscrupulous rulers, making statism a moral and institutional danger rather than merely an economic error.

It linked the statism of communism, social democracy, and fascism, and demonstrated that, just as people who are best suited for any given occupations will rise to the top in those pursuits, so under statism, “the worst” would inevitably rise to the top.

The Nobel Prize becomes the essay’s pivot. Rothbard presents the award as both vindication and irony: vindication because it revived interest in Austrian economics after Mises and Hayek had fallen from professional memory; irony because the Hayek newly celebrated by later admirers was, in Rothbard’s view, drifting away from the Misesian work for which the prize was actually given.

The first free-market economist to receive that honor, Hayek was accorded the prize explicitly for his elaboration of Misesian business cycle theory in the 1920s and '30s.

The final movement is polemical. Rothbard contrasts Mises’s “seamless” rational system with Hayek’s postwar shifts in economics and political philosophy. The decisive conceptual opposition is between Mises’s rational, purposive actor and Hayek’s emphasis on ignorance, unconscious rule-following, and evolved social practices. For Rothbard, this move weakens the case for liberty: it cannot ground natural rights, and it substitutes deference to inherited rules for rational defense of laissez-faire.

His major problem, and his major divergence from Mises, is that Hayek, instead of analyzing man as a rational, conscious, and purposive being, considered man to be irrational, acting virtually unconsciously and unknowingly.

The essay’s relevance lies in how sharply it polices the Austrian lineage. Rothbard does not deny Hayek’s courage or historical importance; he reassigns that importance to Hayek’s Misesian period and resists treating later Hayekian spontaneous-order liberalism as the culmination of Austrian thought. The closing judgment is severe but not dismissive: Hayek’s permanent legacy is his early economic theory and his public steadfastness against socialism and Keynesianism.

In addition, Hayek must always be honored for having the courage to stand shoulder to shoulder with his mentor, in the dark days of the interwar and postwar years, against the twin evils of socialism and Keynesianism.