Hayek's Challenge: An Intellectual Biography of F.A. Hayek
Bruce J. Caldwell
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Friedrich A. Hayek is regarded as one of the preeminent economic theorists of the twentieth century, as much for his work outside of economics as for his work within it. During a career spanning several decades, he made contributions in fields as diverse as psychology, political philosophy, the history of ideas, and the methodology of the social sciences. Bruce Caldwell—editor of The Collected Works of F. A. Hayek—understands Hayek's thought like few others, and with this book he offers us the first full intellectual biography of this pivotal social theorist.
Caldwell begins by providing the necessary background for understanding Hayek's thought, tracing the emergence, in fin-de-siècle Vienna, of the Austrian school of economics—a distinctive analysis forged in the midst of contending schools of thought. In the second part of the book, Caldwell follows the path by which Hayek, beginning from the standard Austrian assumptions, gradually developed his unique perspective on not only economics but a broad range of social phenomena. In the third part, Caldwell offers both an assessment of Hayek's arguments and, in an epilogue, an insightful estimation of how Hayek's insights can help us to clarify and reexamine changes in the field of economics during the twentieth century.
As Hayek's ideas matured, he became increasingly critical of developments within mainstream economics: his works grew increasingly contrarian and evolved in striking—and sometimes seemingly contradictory—ways. Caldwell is ideally suited to explain the complex evolution of Hayek's thought, and his analysis here is nothing short of brilliant, impressively situating Hayek in a broader intellectual context, unpacking the often difficult turns in his thinking, and showing how his economic ideas came to inform his ideas on the other social sciences.
Hayek's Challenge will be received as one of the most important works published on this thinker in recent decades.
"Hayek is fortunate in his biographer. Hayek's Challenge is a success, and Caldwell proves himself capable of presenting Hayek's ideas - in all fields - with both depth and clarity.... Hayek's challenge is worth remembering, and Bruce Caldwell has done a great service by reminding us of it." - Jason Steorts, National Review
"Bruce Caldwell's intellectual biography of the great Austrian is a wonderful work." - Richard D. North, Independent (UK)
"Hayek has spawned a burgeoning literature, often expressing polarized, jargon-laden views. This accessible introduction to Hayek's intellectual life and times is a refreshing exception." - Choice"
subject matter has been lost. It may happen that an exaggerated or even decisive signiﬁcance is attributed to secondary problems of the science. Erroneous methodological principles supported by powerful schools prevail completely and one-sidedness judges all efforts in a ﬁeld of knowledge. In a word, the progress of a science is blocked because erroneous methodological principles prevail. In this case, to be sure, clariﬁcation of methodological problems is the condition of any further progress. —
school economists were the clear winners. Schmoller won the battle over academic turf outright and, with the help of Althoff, set the direction of academic research in German-speaking universities for the next thirty years. Schmoller’s victory helped create a distinct Austrian school, but Menger’s successors sought to emphasize aspects of the Austrian message that were more in line with marginalist thinking elsewhere. For a new generation of Austrians, as for their counterparts in England and
becoming an object of investigation” (76). Weber’s objection is not a denial of the efﬁcacy of the historical school’s methodology. Rather, Weber’s claim is that Schmoller’s approach is wrong in principle; our observations are of necessity colored by our interests and by our theoretical framework. Even “pure observation” is always observation from a point of view; there is no such thing as “facts in themselves.” In modern terminology, what we take to be the facts are themselves “theory laden” in
the limitations of money as a tool for measuring value, noting that many aspects of life are not subject to monetary calculation, and he also recognized that money’s value could change. Only when the value of money is reasonably stable will prices accurately reﬂect relative scarcities and, thereby, help guide production. For Mises, sound money and freely adjusting market prices work together to make a private enterprise system work. Neurath wanted to do away with all of it and justiﬁed his views
where my book ﬁts into the now enormous secondary literature on Hayek and on the Austrian school. When I started work on this project over ten years ago, not much had been written on the early history of the Austrian school. This has now been to a considerable extent remedied. Caldwell (1990) contains conference papers on Menger, English translations of some early work are provided in Kirzner (1994a), and Endres (1997) offers a book-length explication of some of the theoretical contributions of