FRIEDRICH HAYEK

Friedrich Hayek

Friedrich Hayek

Introduction

The Renaissance of literary economics in the twentieth century is largely associated with the Friedrich Hayek. Friedrich Hayek made great contributions to the psychology, political theory and economics. His contributions are of particular importance as the people currently reads his writing that was written fifty years back.

Discussion

Friedrich Hayek has gained central position in various fields that mainly includes Competition Prices and Knowledge. These broad fields of economics have been the centre of attraction for Friedrich Hayek who became famous for his contributions to the spontaneous order and dispersed knowledge. These contributions are mainly related to the field of economics in which he excelled. His great contributions are associated with the relevancy of ideas that are obscured with the expansion of the initial theory. Several students of economics have been reading his articles related to the knowledge and economics obtaining insights within the field of economics that their older and experienced teachers could not understand completely. It would not be consider a surprise if imagine that large minority students in the year 2050 would be reading his articles. Friedrich Hayek has been given the title of “Preeminent Economist” for the last half period of twentieth century.

Contributions to the Field of Economics

Friedrich Hayek is considered to be the well known advocate for the Austrian Economics. Being born and raised in Austria, he was the only recent and major member in the school of Austria where he studied economics. At the end of the World War I, he earned his doctorate degrees in political science and law from the University of Vienna. Hayek was made a director of “Institute of Business Cycle Research” in the year 1927. However, in the year 1930s, Lionel Robbins invited Friedrich Hayek to the London School of Economics for joining as a faculty member where he worked as a teacher for eighteen years and got his British citizenship in the year 1938.

From the years 1920 through 1930, the work of Hayek was based on the monetary theory, Capital theory and Business Cycle in Austria. The relationship was presented among all the three subjects by Friedrich Hayek. He described that the coordination of individual's action is considered to be an important problem for the economy of any country. Like Adam Smith, Friedrich Hayek also noticed that the price system in the free market have played excellent role in coordinating the role of the individuals however coordination is not considered to be the part of the individual's intent. Thus market is considered to be a spontaneous framework that has been evolved slightly due to the results of the individual's action. As the market does not work efficiently, he sort out the factors that fail the market in understanding and coordinating the individual's action that ultimately increase the extent of unemployment thereby making large number of individuals unemployed.

He explained that one of the main causes of increase in the unemployment level is the increase in the supply of money done by the central banks of the ...