The archive.

An apparently harmless compliment provokes Hayek’s protest in this brief 1977 letter to the Times Literary Supplement, republished here in 2022. Calling a book ‘well-researched’, he argues, confuses the activity that produced it with the achievement embodied in it. His grammatical objection becomes a defence of scholarly dignity: would the phrase adequately describe Newton’s Principia or Einstein’s general theory of relativity? The letter offers a pointed occasion to consider what reviewers actually praise when they praise research—and why Hayek hears an insult where others might hear approval.

What exactly counts as money? Rothbard's answer refuses the Chicago school's habit of choosing a monetary aggregate because it correlates with national income—statistical fit, he argues, evades the prior question of what money is. Returning to Mises's definition of money as the generally accepted medium of exchange, he counts demand deposits and other claims the public treats as redeemable at par in standard money, while excluding stocks, bonds, and real estate that are merely liquid and must first be sold. The functional test yields his aggregate Ma: cash plus fixed-rate redeemable claims. A second measure, Mb, isolates newly created bank money entering business credit—the channel that, in Austrian cycle theory, distorts the structure of production toward higher-order capital goods, distinct from deficit finance or consumer lending.

Furthermore, the approach overlooks the fact that statistical correlation cannot establish causal connections; this can only be done by a genuine theory that works with definable and defined concepts.

The instruments to stop inflation exist; the will does not, and that gap is Hayek's diagnosis in this 1978 lecture. Central banks command the base of the credit pyramid, but democratic commitments to full employment, coupled with unions that push money wages above market-clearing levels, make expansion the path of least resistance. Drawing on Mises, Hume, and Cantillon, he shows that new money enters at particular points and spreads as a price gradient rather than a uniform rise, misleading entrepreneurs and corrupting accounting so that spurious profits are taxed as though real. Because the stimulus works only by surprise, inflation must accelerate to keep its effect, and stop-go policy grows ever more unstable. Durable stability, he concludes, requires restoring flexible wage determination before any international reform can hold.

My main aim tonight is to bring out clearly why we must stop inflation if we are to preserve a viable society of free men.

A dispute over how much inflation to tolerate becomes, in Hayek’s hands, a challenge to government’s exclusive right to issue money. In this 1978 letter to the Sunday Times, presented in an annotated 2022 reprint, he disputes the label “deflation” and argues that the pain of stabilisation should be traced to earlier monetary expansion. His distinctive move is to shift attention from policymakers’ choices to their incentives: governments face pressure to manufacture more money, whereas competing private issuers would have to preserve the value users prefer. The letter offers a compact encounter with the reasoning behind his currency proposal, linking the language of a British policy controversy to the practical question of what makes money worth holding.

No genuine reform of the international monetary system emerged from the 1976 Jamaica Agreement — so Machlup argues in this sharp commentary answering Dr. Slighton’s defense, which, read carefully, concedes nearly every charge the prosecution had made. The agreement supplies neither an adequate adjustment mechanism nor an orderly means of controlling international liquidity, and liquidity and adjustment, he insists, hang together: reserve-rich countries postpone correction while intervening ones inflate their money supplies. Against the claim that flexible rates impose their own discipline, he notes that internationally, borrowed reserves can enlarge the effective reserve base. He sketches three routes — rules on intervention, a gold-for-SDR substitution account, a Witteveen-style cap — and dismisses “politically impossible” as a temporary condition of education, recalling that dollar devaluation was once unspeakable.

Nothing of what I have said is well thought out: I have spoken impromptu. But I think we must have the courage of saying foolish things because, eventually, out of foolish things, wise things may be distilled.

Markets coordinate activities that no participant—and no economist—can fully comprehend. In this Ludwig von Mises memorial lecture, Hayek makes that tension the basis of both his account of prices and his argument for scientific restraint. Prices allow producers to respond to circumstances they need not know directly; economic theory, he argues, can explain the resulting patterns without predicting particular outcomes. His recollections of Mises sharpen the distinction: intellectual gratitude does not prevent him from questioning his mentor’s rationalism and wholly a priori conception of economics. The lecture offers a compact route into the connection between Hayek’s defence of market coordination and his criticism of aggregate forecasting, showing why the information conveyed by particular prices cannot simply be replaced by a general price index.

Winning an election, Hayek argues, can be worse than losing it if victory brings no authority to change policy. In this 1978 letter to The Times, reproduced with editorial annotation in 2022, he reads Conservative divisions as a clash between candidates seeking seats and Margaret Thatcher seeking the public support needed for difficult decisions. His support is pointed rather than unconditional: he disclaims knowledge of her private intentions and acknowledges the electoral risk. The concrete issue is trade unions’ legal privileges, which he wants revoked through a mandate sought directly from workers rather than negotiations with union leaders. This brief intervention exposes the demanding distinction Hayek draws between securing office and earning permission to govern differently.

Economists devoted to efficiency, Kirzner observes, keep building theories in which genuine error cannot happen. This chapter—its title nodding to Hayek's 1937 essay on economics and knowledge—asks why, and why market theory cannot manage without it. He clears away the false admissions: Mises's poor marksman is not irrational but merely unskilled; Croce's "economic error" smuggles in value judgments; Stigler's economics of information turns ignorance into rational economizing; Leibenstein's X-inefficiency dissolves into a taste for leisure. The genuine article is different—not lacking information, but failing to notice what lies before one's very nose, the cheaper identical good passed by. Alertness cannot be a resource one chooses to acquire, since choosing it already presupposes it. On this hinge Kirzner rebuilds Jevons's Law of Indifference as the systematic discovery and correction of real error.

Scope for entrepreneurship, we have discovered, is present whenever error occurs.

Can democratic government and individual liberty come apart? In this 1978 letter to The Times, Hayek defends limited democracy as a means of protecting freedom and enabling peaceful changes of government, not as an overriding value in itself. His distinction becomes contentious when he invokes Salazar’s Portugal and Pinochet’s Chile as examples of liberty under authoritarian rule. The explanatory notes in this 2022 reprint challenge those comparisons with evidence of repression and contemporary objections. Read together, letter and apparatus expose a concrete tension: Hayek insists that democracy requires a prior tradition of the rule of law, yet his chosen counterexamples raise doubts about how he recognizes and measures freedom.

Can policies intended to secure full employment create the unemployment they promise to prevent? In this supplementary essay, first collected in 1978 and republished here in 2022, Hayek argues that monetary expansion draws labour into jobs that cannot survive without continued stimulus. His distinctive concern is not simply rising prices but changes in relative prices and the resulting pattern of production. Yet his opposition to inflation leaves room for monetary measures against a cumulative contraction—and for exceptional action under political duress. These qualifications make the essay more than a statement against expansionary policy. Readers can examine where Hayek draws the boundary between preventing further collapse and preserving unsustainable employment, and why he thinks monetary institutions must constrain pressures that sound economic advice alone cannot resist.

Written in Geneva in 1938-39 and left unpublished until 1978, this prewar analysis diagnoses the doctrines that made another European war likely. Its subject is not party guilt but collectivism in all its rival costumes, fascism, National Socialism, Bolshevism, socialism, interventionism, militant nationalism, each of which swells the state into an instrument for directing social life in the name of a collective whole. Mises rejects the ordinary map of right and left, traces how a German liberalism built from Western ideas of rights and self-rule was overrun by Prussian militarism, etatism, and protectionism, and argues that National Socialism was the mass-democratic culmination of these currents rather than a primitive relapse into the old Prussian spirit. Nationalism, on his account, is the imperialist by-product of interventionist economics, which turns tariffs, schools, and borders into prizes to be seized.

Staat ist Gewaltanwendung und Bereitschaft, Gewalt anzuwenden.

English translation: “The state is the application of force and the readiness to apply force.”

Responding to accusations of racialism, Hayek insists in this brief 1978 letter to The Times that hostility toward immigrants concerns acculturation rather than ancestry. His concrete test is Vienna: he contrasts its substantial population of Czech descent with riots over newcomers’ Czech schools, then invokes hostility toward differently dressed Jewish refugees from Galicia. These compressed comparisons expose the central tension in his account: does explaining resentment through cultural separation distinguish it adequately from racial prejudice? This annotated 2022 reprint also preserves an editorial note on Nicholas Kaldor’s competing emphasis on unemployment and deflation. The letter offers a sharply bounded encounter with Hayek’s assimilation-centered reasoning—and with the explanatory burden his historical examples leave unresolved.