Fritz: A New Life of Friedrich von Hayek
On March 12, 2007, Texas representative Ron Paul announced his candidacy for the Presidency of the United States. Although Paul’s attempt then, and in 2012, was unsuccessful, he began a phenomenon that radically changed American politics. Paul was an outsider who ran on an “America First” platform; it called for the reevaluation of the tremendous growth of the federal government, especially the national security state constructed in the wake of 9/11. Paul further rode the wave of increasing mistrust of the government and the established media after it became clear that some officials in the Bush administration may have misled the public on the Iraq War. Additionally, during his 2012 campaign, Paul attracted some dissatisfied Batak Obama voters. In some ways, Ron Paul was an early catalyst for the triumph of outsider populism in the Republican Party even though he ran as an anti-establishment libertarian.
Paul’s campaigns introduced Mainstreet America to the message of “libertarianism,” or the belief in free markets, personal freedom and privacy, and the essentialism of free speech and free thought tinged with a skepticism toward legacy media and Beltway institutions. Paul was also an “old school” American libertarian, sometimes called paleo-libertarianism; his libertarianism was joined with Christianity and the manners and culture of mid-twentieth-century America. One of the terms many Americans were introduced to during the Paul campaign was the “Austrian school of economics” and figures such as Ludwig von Mises and Friedrich von Hayek. Recognizing these terms and figures outside academic and historical scholarship to a broader audience— that has since gone mainstream thanks to the digital revolution in technology and communication since 2008 and 2012– is necessary for this conversation.
In their recent biography, Hayek: A Life, 1899-1960, Bruce Caldwell and Hansjoerg Klausinger have crafted a meticulous and detailed treatment of the early life of one of the two pillars of the Austrian school of economics, Friedrich von Hayek. The biography is a joint effort of an American and a European scholar. Bruce Caldwell is Research Professor of Economics at Duke University, and Hansjoerg Klausinger is an economics professor at WU Vienna University of Economics and Business. The biography thus combines the American art of storytelling with the thoroughness of European scholarship. In Hayek: A Life, Caldwell and Klausinger note that it is their goal to provide a factual account of the life of Hayek that supplements and even corrects the earlier narratives that relied on the all too fallible memoirs of Hayek himself as well as others in his circle. The two authors rely on Hayek’s correspondence as well as legal and other documents to fill in gaps of other earlier biographies. They further note their goal is to show the Hayek family, with its “warts and all,” chronicling the controversial political views of his family members and Hayek’s divorce to his first, very loving, and loyal wife, Helen, for his youthful love and cousin, Helene.
On one level, Hayek: A Life is the story of the two-fold death and rebirth of Europeans after both World Wars. Hayek was born in 1899 during the final days of the Hapsburg-ruled Austro-Hungarian Empire. As the monarchy declined, a host of modern ideologies grew in its place. Austria, during this time, was increasingly divided along ethnic, cultural, and religious lines. There was a growing, largely secular, Germanic movement; it sought to tie Austria more closely with the more modern, industrialized, and allegedly more enlightened Germany. These pro-German Austrians tended to view both Jews and Catholics with suspicion—one Germano-centric party had the slogan “not liberal, not clerical, but national.” Jews themselves had achieved tremendous success in the Habsburg Empire which made them easy scapegoats and targets for German nationalists. Hayek’s own family identified as culturally Christian and German, but they did not attend mass regularly and were largely imbued with nineteenth-century secular scientism.
Hayek’s father, Augustus, was a physician and practicing botanist, leading his family on weekend expeditions collecting flowers. These trips inspired in Hayek a love of nature and a sense of home in the Tyrolean mountains. According to Caldwell and Klausinger, the Hayek’s lived on the “fringe” of upper middle-class Vienna.
As Hayek progressed in his education, he became known as a talented student. When World War I broke out, “Fritz” (as he was also known as) decided to enter cadet school after his seventeenth birthday. Fritz was first stationed at the Italian front but would see very little action throughout the war—his letters back home frequently note his boredom. Later in the war, he was shot at by British Sopwith Camels while flying in a German biplane—at one point, he even crash-landed, barely evading enemy lines. During the remainder of the war, various forms of illnesses helped him to evade combat and potential death.
After the war, Fritz enrolled at the University of Vienna, finding his home among a crowd of liberals who disagreed with both the far left and far right. During this time, his study of classical liberalism inspired a curiosity toward England, which Fritz had been taught to disparage during the war. Vienna, after the war, was crippled by poverty and the privation of goods. However, by 1920, things began to normalize, Fritz began his first economic publications, and he intensified his relationship with Helene, or Lenerl, who would become the love of his life and led him to divorce his first wife. While studying at the University of Vienna, Fritz was exposed to the Austrian School of Economics. A prefiguring of The Austrian School began in the eighteenth-century with the writings of the novelist and legal scholar Joseph von Sonnefels (1732-1817); however, there was not formally an “Austrian School of Economics” until it was founded in the 1870s by Carl Menger (1840-1921); he developed what became known as the “subjective theory of value.” Menger served as an economics tutor for the tragic Crown Prince Rudolf and famously clashed with “German historical school” figures like Gustav von Schmoller. Those who followed Menger’s thought included Friedrich von Wieser (1851-1926) and Ludwig von Mises (1881-1973).
Fortified in the tradition of Austrian economics, Hayek took a position at the London School of Economics in 1931 where he taught courses such as “The Problems of the Collectivist Economy” and clashed with John Maynard Keynes, with whom he—as he would with Karl Popper and Harold Laski—developed a friendship and mutual respect despite ideological and intellectual differences. With his conflicts with social democrats, socialists, Marxists, and the rise of Nazism and Fascism, Hayek intensified his work on what would become his most famous publication: The Road to Serfdom (1944). Hayek specifically stated that this work would be his way of fighting the Nazis, though the work also had the secondary purpose of fighting authoritarian centralism in all forms. The Road to Serfdom was published in England during a fortuitous time when Penguin Books was publishing their “six pence” volumes for a public that was, during the blitz, devouring books while much of English social life was crippled. The Road to Serfdom was eventually published in the United States by the University of Chicago Press and, later, a condensed Reader’s Digest version was published for the wider public making Hayek a well-known name in educated and literary circles on both sides of the Atlantic.
Hayek eventually took a position at the University of Chicago where his work would influence Milton Friedman and from Friedman and his disciples to the wider world. In many ways, Hayek helped to bring Austrian economics to the United States. These ideas would exert a tremendous influence on Margaret Thatcher and Ronald Reagan who would stop the tide of Keynesianism and democratic socialism in the United States and Great Britain, helping to launch the “conservative” counter-revolution that began rolling back the social programs of the previous four decades while embracing a more aggressively anti-communist foreign policy. In some sense, the west’s victory in the Cold War was partly due to the ideas of Hayek having gone mainstream and enjoying political implementation in the principal countries of the anti-Soviet alliance. At the same time as Hakey’s economic thought influenced the rise of modern conservatism, so too did it influence the nascent libertarian movement in the United States.
However, history did not end in the 1980s and 90s as a whole host of political and economic ideas have taken over conservative thought in the twenty-first century. As we are approaching the 80th anniversary of the publication of The Road Serfdom, we are still living in the shadow of Hayek and the freedom he fought for. Whether or not one agrees with Hayek’s ideas, Hayek: A Life is crucial read for understanding liberal economic thought in the twentieth-century and how it influenced much of the economic thinking of Cold War era conservatism and capitalism, the politics of freedom and anti-communism, and continues to be an alluring alternative to the soft centralism and managerialism of new establishment erected in the aftermath of the Cold War and War on Terror.
Hayek: A Life, 1899-1950
By Bruce Caldwell & Hansjoerg Klausinger
Chicago: University of Chicago Press, 2022; 840pp
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