Hayek Quotes

“He had arrived of course with certain preconceptions. We recall from his book list that Fritz had begun reading Oswald Spengler’s The Decline of the West in May 1920. That book had a scathing description of the in- habitants of “world-cities” like New York: “a new sort of nomad, cohering unstably in fluid masses, the parasitical city-dweller, traditionless, utterly matter-of-fact, religionless, clever, unfruitful, deeply contemptuous of the countryman and especially of that highest form of countryman, the country gentleman” (Spengler 1926, 32). Fritz anticipated finding his stay in New York “instructive and unpleasant,” and his first month there con- firmed his expectations. In his letters he offered up what he recognized were the standard European stereotypes about America: that “as is known from decades of stories” Americans are obsessed with making money; that American “culture,” to the extent that the phrase is not an oxymoron, is lowbrow; that the superlative (e.g., having “the world’s biggest building, fortune, beauty”—he wrote this in English) is both the preferred mode of expression and the only thing that makes Americans happy (Fritz to Aba, Apr 26, 1923). He informed his readers that one would have suspected that such images must be caricatures, until, that is, one had actually experienced them, as he had. He was glad, he went on, that he had made the decision to come, to have had the experience of seeing things firsthand. But in his opinion, living in the United Stated long term would be impossible for any European even to consider. It might be noted that this harsh initial opinion did not appear to dissipate much during his time there. In a summer letter to Mises, he remarked on “the vast intellectual superiority of the Europeans. This becomes evident in every-day life, its lack of intellectuality, its tastelessness and banality, which have a fatal effect and make it impossible to enjoy the comfort that is available here in contrast to Europe. [Most of the Europeans living here] agree that America is a country to earn one’s money but not one to live” (Hayek to Mises, Aug 17, 1923).”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“In Hayek’s monetary theory of the cycle the upswing is generated by monetary expansions that cause an excess of investment over volun- tary saving and a shift in the structure of production toward more time- consuming processes. This structure, created by a depressed money rate of interest, cannot be sustained. Monetary expansion, then, will not pro- duce an everlasting boom, and when the expansion eventually stops, crisis and depression follow. With regard to the sources of monetary expansion, while others like Mises put the blame on the misguided (“inflationist” or “cheap money”) attitude of the monetary authorities, Hayek pointed to the endogenous process of money creation by the banks, in particular in a sys- tem of fractional reserve banking (see, e.g., Hayek 2012a [1933a], chap. 4, vs. Mises 2006b [1928]).”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“The Marshall Society talk was doubtless interesting, but probably not altogether pleasant for Hayek. Some forty-odd years later, Joan Robinson in her Ely Lecture talked about how Hayek had “covered the blackboard with his triangles” and about the “pitiful state of confusion” within economics that his talk, in retrospect, represented. In her recounting, Kahn had “asked in a puzzled tone, ‘Is it your view that if I went out tomorrow and bought a new overcoat, that would increase unemployment?’ ‘Yes,’ said Hayek. ‘But,’ pointing to his triangles on the board, ‘it would take a very long mathematical argument to explain why’” (Robinson 1978a [1972], 2–3). In his own reminiscence, Kahn (1984) observed: “It is only fair to Hayek to mention that he had to condense four lectures into one, and that they were written when he had a high temperature” (182).”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Hayek was too polite to say so, but part of the problem was that Wick- sell wrote in German.6 In the Treatise Keynes had mentioned in passing his awareness of a “neo-Wicksell” school whose writings on savings, invest- ment, and the credit cycle (he identifies works by Mises and Neisser, as well as Hayek’s Geldtheorie und Konjunkturtheorie) were similar to his own. But he went on to add, fatefully, in a footnote, “In German I can only clearly understand what I know already!” (J. M. Keynes 1971c [1930], 178). This led the Swedish economist Gunnar Myrdal (1939 [1933]) to offer his well-known observation about “the attractive Anglo-Saxon kind of unnecessary originality, which has its roots in certain systematic gaps in the knowledge of the German language on the part of the majority of English economists”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Hayek echoed Robbins’s description of the Common Room as a place where, despite sharp political differences, the ambiance was friendly, an atmosphere that suited his own tastes well (Hayek 1994, 81).
Some examples of the kind of collegial repartee that was characteristic of the School was a “Mock Trial” of economists that Director Beveridge organized in June 1933 (reported in the Economist, June 17, 1933) or Beveridge’s address (titled “My Utopia”) before the School’s Cosmopolitan Club at the beginning of the Michaelmas term in 1934. In the latter Beveridge (1936) spoke of an “elaborate apparatus” that had been invented by “John Maynard von Hayek” which had apparently solved the problem of making money neutral: “So far as I can make out, it automatically changes the air and so affects the blood pressure of bankers and businessmen, as prices rise or fall in relation to productive efficiency” (135). There were also regular events to mark the end of term, all dutifully entered by Hayek into his appointment book: the Christmas party at the end of Michaelmas term and the Strawberry Tea at the end of summer term.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Hayek clearly enjoyed the give-and-take of argument, but he liked to keep discussions on a civil and professional level rather than allow differences of opinion to interfere with one’s personal relationships. This was why he was so comfortable in English academic settings. The ability to en- gage in fierce debates in the seminar room (though his personal style in this arena was to state his arguments in a reasoned and calm manner) and then seamlessly retire to the repartee and banter of the Common Room was both quintessentially British and a highly prized element of that particular culture. It was how intelligent men fought, and how they played.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“On the more technical kind of economics my advance was impeded by my inadequate knowledge of mathematics which I had never found helpful in my work, even at such times as when I had temporarily mastered the particular techniques required, but felt not to be worth the effort to acquire real competence merely to be able to refute or criticize the work of others—as I now recognize, a serious mistake”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“The phrase “men of science” was used by the scientists themselves, all men. C. P. Snow, remembered today as the author of The Two Cultures (1959), was also the author of the “Lewis Eliot” series of novels on Cambridge college life and its academic (and other) politics in the 1930s and later. He offered the perfect caricature of this behavior in the character of Crawford, who would often preface any opinion he offered to his colleagues with the authoritative phrase, “Speaking as a man of science . . .”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“As for Hayek, he had no funds for a rental, having just bought a house. It was a good time to make a purchase: there was plenty of inventory and house prices were falling as tens of thousands cleared out of London. But he had also been given notice. As luck would have it, one came available on Turner Close. As noted earlier, in order to be able to afford the down pay- ment, that spring Hayek sold to the Bank for International Settlements, via its director, Per Jacobsson, six hundred or so volumes on money and bank- ing published before 1900, mostly in English, which he had collected in the late 1920s for the never-completed big volume on money. They were in their new home by August (Bartley interviews, Nov 2, 1983; IB 94).”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“The biggest danger during the Phoney War was not bombs but the un- intended consequences of the blackout, particularly during the long win- ter nights, when it became dark well before the time that many people had begun to return home from work. Streetlights were extinguished and cars were only allowed to use their sidelights, a recipe for motor accidents. Even though there were many fewer cars being driven, the number of road deaths increased by about a third from a year earlier, to four thousand. December 1940 was particularly dangerous in London, where pedestrian deaths in- creased eightfold compared with earlier years. There were more and more children back in London, even though many schools remained closed; by late spring 1940, virtually all of those who had evacuated in September had returned. People who still brought their gas masks with them to work could become objects of scorn and ridicule when spotted on the streets by bored, less than well-behaved children (Price 2000, 17; Ziegler 1995, 56–68, 102).”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“If Saint-Simon had been a megalomaniacal verkannte Genie (196), at least he had enough personal charm to attract a following. In comparison Hayek’s second protagonist, Auguste Comte, a founder both of socialism (through his collaboration with Saint-Simon) and, in his own writings, of positivism, was a “singularly unattractive” individual. Grandiose, pompous, ever confident of his own brilliance (early in life he decided he had read enough, and thereafter practiced a “cerebral hygiene,” refusing to read anything new), he felt he had discovered laws governing the development of the human race that were “as definite as those determining the fall of a stone” (258, 269). He was prolix: his first work, the Cours de philosophie positive, took over a dozen years to complete and ran to six volumes, while his second, the Système de politique positive, took up four. Only his death prevented the world from receiving a planned third set of volumes. His work, perhaps unsurprisingly, was almost completely ignored in his own country during his lifetime.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Grandiose, pomp- ous, ever confident of his own brilliance (early in life he decided he had read enough, and thereafter practiced a “cerebral hygiene,” refusing to read anything new), he felt he had discovered laws governing the development of the human race that were “as definite as those determining the fall of a stone”.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“There was frequently a moral lesson lurking just below the surface in Hayek’s accounts, usually having to do with Keynes’s overweening self- confidence and the dangers of hubris. His retelling of their final conversation is illustrative. Hayek had asked Keynes whether he was at all concerned about the uses to which his disciples were putting his theories, and in particular, whether a theory that had made sense in “the age of plenty” of the 1930s might not stimulate inflation as the economy neared full employment. Keynes assured Hayek that were his theories ever to become harmful, he could turn public opinion against them like that, and snapped his fingers. Unfortunately, as Hayek concluded, “six weeks later he was dead”.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Ayn Rand described Hayek’s book as “pure poison”; Frank Chodorov “thought the program verged on intellectual cowardice”; libertarian economist Walter Block was probably not alone in thinking him only “a weak and conflicted supporter of the market”; and Hans-Hermann Hoppe referred to “Hayek’s social-democratic theory of government”.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“Those concessions might also explain why Keynes responded to the book as he did, a response that might surprise later generations. Keynes read it on the boat on the way to Bretton Woods, and on arriving in Atlantic City sent a letter saying that it was a “grand book” and that “morally and philosophically I find myself in agreement with virtually the whole of it; and not only in agreement with it, but in a deeply moved agreement” (Keynes to Hayek, June 28, 1944, quoted in Keynes 1980b, 385). Keynes went on to say that they would probably disagree on the question of where to draw the line regarding more or less intervention. Keynes thought that almost certainly more planning was necessary, which could be carried out safely if the lead- ers were “rightly orientated in their own minds and hearts to the moral is- sue” (Keynes 1980b, 387). So there were obvious differences between them. But the general sentiment expressed underlines once again the fact that in the context of their times and especially with respect to central planning and the men of science who advocated such a path for Britain, Keynes and Hayek were on the same side.”
― Bruce Caldwell, Hayek: A Life, 1899–1950

“The dangers of this ratchet effect to society are multiple. It pits groups one against another in the struggle for protection, it hinders the working of the price system, and it affects our attitude toward risk. At the end of the book, it becomes clear why trying to maintain people at their current level of income was such a bad policy. When the war ended, there was going to be a massive reallocation of resources as the economy shifted from a war foot- ing to peacetime, in the face of which it was important “that we should all be ready to adapt ourselves quickly to a very much changed world, that no considerations for the accustomed standard of particular groups must be allowed to obstruct this adaptation, and that we learn once more to turn all our resources to wherever they contribute most to make us richer . . . Let a uniform minimum be secured to everyone by all means; but let us admit at the same time that with this assurance of a basic minimum all claims for a privileged security of particular classes must lapse” (215). Thus the fear of policies likely to be undertaken after the war was at least in part responsible for Hayek’s distinction between the two types of security. He was willing to grant a basic minimum, but feared the outcome if those who pushed for more were successful.”
― Bruce Caldwell, Hayek: A Life, 1899–1950