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Hayek’s theory of business cycles has been criticized for its unfeasible policy prescriptions, weak empirical support, and lack of technical rigor. Although the theory can be defended against these criticisms, it violates the rational expectations hypothesis, a criterion by which economists tend to judge the quality of economic arguments. Since Hayek and his followers failed to remedy the violation, the theory in its present form cannot capture the interest of the economics profession. This outcome might be avoidable. However, to change it, Hayek’s theory either needs a satisfactory restatement, or it must wait until economists change their criteria for judging the quality of arguments. [ABSTRACT FROM AUTHOR]

Joseph Schumpeter (1883-1950) was pessimistic regarding capitalism's ability to survive. He predicted that large firms would crowd out start-up entrepreneurs--the ones inspiring creative destruction. These entrepreneurs, he thought, would be unable to obtain sufficient funds to launch products on a competitive scale. Since 1950, a venture capital industry has emerged, which now inspires creative destruction on an unprecedented scale. Our retrospective analysis reveals that the venture capital industry evolved in Schumpeterian fashion. Finally, we argue that had Schumpeter taken Knight (1921) and Hayek (1945) into account, he might not have made the claim that capitalism requires creative destruction to endure. [ABSTRACT FROM AUTHOR]

Friedrich Hayek's research focus shifted from a formal analysis of the capital structure in the early 1930s to the study of the economy of knowledge in 1945. He never, as it is too often said, abandoned economics. The abandonment narrative impedes understanding of Austrian economics generally and Hayek's works more specifically. Toward correcting the false narrative, we explore connections between his 1945 thesis and the price fan simile he set out in 1931 to facilitate understanding of the role played by emerging input prices as more capitalistic methods of production are adopted. Expanding on the price fan simile, we also seek to deepen the understanding of the allocative marvel that prices achieve in the free market system, and, consequently, the utter impracticality of using socialist calculation in place of the free market. [ABSTRACT FROM AUTHOR]

This paper discusses F. A. Hayek's views of his own work, as expressed in sixteen hours of interviews from 1978. It covers his thoughts on writing "The Uses of Knowledge in Society" and his discovery of the utilization of dispersed knowledge; the functioning of our capitalist system; the differing reactions of the Americans and the British to The Road to Serfdom and the book's intended audience; why he felt optimistic in the late 1970s despite all the problems of the time; and more. [ABSTRACT FROM AUTHOR]

Many writers--most famously F. A. Hayek and Milton Friedman--have posited a relationship between economic freedom and political freedom and/or civil liberties. Despite sustained interest, this relationship has been the subject of little empirical study. I estimate the short-run effect of a measure of economic freedom (using the Economic Freedom of the World index) on measures of civil liberties (using the CIRI Human Rights Dataset). In contrast to most previous studies using Freedom House's Freedom in the World index, I treat civil liberties as distinct from political freedom and consider several fundamental liberties separately. [ABSTRACT FROM AUTHOR]

I trace the influence of a group of Scottish political and moral philosophers on F. A. Hayek's thinking on liberty and classical liberalism. David Hume is the most notable; the list also includes Adam Ferguson, Dugald Stewart, and Adam Smith. In many cases, we have Hayek's own words on these moral philosophers' influence. I look at the Scots through Hayek's eyes to understand their influence on him. My purpose is to present this important strand of classical liberal thought and its influence on Hayek's own political and legal framework for liberty. [ABSTRACT FROM AUTHOR]

In his famous book Freedom and the Law, originally published in 1961, Italian lawyer and economist Bruno Leoni asked whether, over the long run, a society and legal system premised primarily on legislative lawmaking could sustain a system of individual liberty, or whether such a system required a common-law-style foundation to support it. In this article, I evaluate Leoni's challenge and find that his predictions about the nature of a legislative-centered legal system not only are more relevant than ever, but that recent tendencies toward extreme and arbitrary law-making by executive edict are consistent with the trends and intellectual principles that Leoni identified more than fifty years ago. Because modern legal developments reflect the working out of the jurisprudential principles that Leoni identified fifty years ago, Leoni's warnings are more relevant today than ever before. [ABSTRACT FROM AUTHOR]

This is an introductory essay to a symposium on the monetary and banking systems and their relation to the state. The essay briefly summarizes the three papers. It links the arguments of the papers, one of which is itself a historical piece, to ones extending back to the eighteenth century. Classical political economists were suspicious of fiat currency because of the historical record of debasement and resulting inflation. In the nineteenth century, writers searched for sound money, which was typically commodity money. In the twentieth and twenty-first centuries, economists search for a monetary constitution. [ABSTRACT FROM AUTHOR]