50 Years On from Hayek’s Nobel Prize
On October 9th 1964, fifty years ago, F A Hayek was awarded the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel, which is treated as the Nobel Prize in Economics. He received it for his work on economic fluctuations, the theory of money, and the interdependence of economic, social, and institutional phenomena. He shared the award with Professor Gunnar Myrdal.
Some of his greatest intellectual breakthroughs came in the field of Political Economy, notably his insight that a spontaneous economy is not an unplanned one. True, it is not planned from the centre by a few directing minds, but it is planned at the periphery by millions of people whose decisions coalesce into an order that has more information and can respond more rapidly than one that is deliberately planned.
Hayek was building upon the observation by Adam Ferguson that some orders are “the products of human construction but not of human design.” Hayek created from this the notion of a spontaneous order containing more wisdom from the multitudes than can emerge from the thinking of a few.
In 1947 Hayek founded the Mont Pelerin Society, a group of classical liberal thinkers who banded together to form a bulwark against socialist totalitarian thought that was spreading across much of the world. Its founding members included Ludwig von Mises, Milton Friedman and Karl Popper among other illustrious scholars.
Hayek’s thought was hugely influential in overturning the postwar consensus, and bringing a revolution that elevated the role of markets and free decision-making. He acted as Chairman of the Adam Smith Institute’s Academic Board and came to visit its team twice a year. Both Margaret Thatcher and Ronald Reagan took inspiration from his works.
The ASI in the year 2000 voted Hayek as the man of the century, preferring a benign scholar whose ideas helped lift millions out of poverty to megalomaniac dictators who murdered millions. Hayek was one of the greatest and most influential figures of the Twentieth Century, and well deserved the recognition he received.