Anglo-Austrian philosopher and economist Friedrich von Hayek was not only a profound thinker, but also a remarkable man....
On the occasion of Friedrich von Hayek’s birthday yesterday, 8 May, I briefly recalled his visit to Iceland in the spring of 1980 when he was about to become 81 years old, but still surprisingly vigorous. I would here like to add a few words about my later encounters with him. During his stay in Iceland Hayek invited me to the next meeting of the Mont Pelerin Society which was held at the Hoover Institution at Stanford in the following autumn, and I subsequently became member of the Society. Hayek was not at Stanford, for health reasons, but I next saw him at the regional meeting of the Society in Stockholm a year later, in 1981, although I did not have the chance to have much conversation with him. By then I had completed my studies at the University of Iceland and moved to Oxford where I was working on a doctoral dissertation in politics about ‘Hayek’s Conservative Liberalism’. (My recent book on Twenty-Four Conservative-Liberal Thinkers may be said to have grown out of that dissertation.) We met again at the Mont Pelerin Society general meeting in Berlin in 1982 which was the first and only time I saw him with his wife, a good-looking, elegant woman, but not overly friendly. After the closing dinner, they danced together. Watching them, it was difficult to imagine that he was then eighty-three years and that she was only younger by a year.
My supervisor at Oxford, John Gray, and one of my fellow students, Chandran Kukathas from Australia (now at Singapore Management University), were also studying Hayek’s works, and in the spring of 1983 the great thinker paid us a visit. Gray held a reception for him at his college, Jesus, where his wife Marie took a few photographs. Hayek told us that he liked Chinese food, whereas he found Japanese food rather bland although it usually looked good. In the evening we therefore invited him to a Chinese restaurant, Xian on Banbury Road. The conversation was mainly between Hayek and Gray, not least about the concept of spontaneous order. Hayek said: ‘The task of the economist is really to explain why he is not needed. Under proper rules, the economy can basically look after itself. But of course many of my colleagues would resist playing such a modest role.’ He told us that some young economists were exaggerating the differences between the Austrian School and the Chicago School. The truth was that members of the two schools agreed on most things, although he had issues with his friend Friedman’s methodology.
At the end of the dinner, Hayek gave a toast and said a few words which he directed to Chandran, me and a third student who was there, Andrew Melnyk from England (now at the University of Missouri). We had asked him for permission to found a Hayek Society at Oxford. ‘I am of course quite happy that young people are interested in my ideas and arguments. It is a welcome change. But you have to promise me one thing. I have noticed that the Marxists are much worse than Marx and that the Keynesians are much worse than Keynes. Therefore you have to promise me that you do not become Hayekians,’ Hayek said and chuckled.‘You have to maintain a critical attitude and think independently.’
Later that spring, Chandran, Andrew and I founded the Hayek Society at Oxford, inviting a distinguished scholar to give a lecture every fortnight during term, on Friday afternoons, in a seminar room at the Social Studies Faculty Centre in George Street. Afterwards we usually took the speaker to dinner, continuing the discussion, often at a small place on Little Clarendon Street, Michel’s Brasserie. This was invariably the liveliest part of the event. We tried to follow Hayek’s request and sometimes invited people who were critical of economic liberalism, such as the socialists David Miller and Raymond Plant and the communist Gerald A. Cohen, but most of our guests were sympathetic to Hayek’s ideas, including Norman Barry, Jeremy Shearmur and Antony Flew.
In February 1984, I met Hayek again at a regional meeting of the Mont Pelerin Society in Paris. I asked him whether he liked to be called Fritz, and he confessed that he had always rather disliked this nickname, although he had politely put up with it. He said that he preferred to be called by his anglicised name Frederick. When I met him again at the general meeting of the Mont Pelerin Society in Cambridge in the autumn, I gave him a short report on the Hayek Society at Oxford and asked whether he could meet us again. He said that he would contact me next time he was in London. So he did in the spring of 1985, telling me that he might be available for a meeting one night. I wrote to Leonard Liggio who was in charge of the Hayek Fund at the Institute for Humane Studies in Fairfax, Virginia, and he was able to get us a small grant, so that we could entertain Hayek in proper style, at the Ritz Hotel. Five of us took the train up to London, besides me Chandran and Andrew, and two other students who had joined us at the Hayek Society, Emilio Pacheco from Venezuela (now at Liberty Fund) and Stephen Macedo from the United States (now at Princeton University).
I collected our guest of honour at the Reform Club in Pall Mall where he usually stayed in London. It was a short taxi ride to the Ritz. Hayek was in good spirits. He told us of his meeting with Thatcher on 17 September 1979, four months after she became Prime Minister. She heard that he was in town and invited him for lunch at 10 Downing Street. When he arrived, she greeted him at the door with the following words: ‘Professor Hayek, I know precisely what you are going to say. You are going to say that I have not done enough. And of course you are absolutely right!’ Hayek laughed heartily and said that with these opening remarks she had completely disarmed him. He said that even if he had been born in Austria and spent a lot of time in the United States and Germany, he remained a British subject and felt that England was his real home. Therefore he had been quite pleased when he was made Companion of Honour in the spring of 1984, on Thatcher’s recommendation. He went to Buckingham Palace and had an audience with the Queen. He told us that she had surprised him. The monarch had been much better informed than he had expected, charming and gracious.
Hayek also told us about the four American presidents he had met. Unbelievably, as he remarked, the first one was Calvin Coolidge who had on 27 December 1923 held a reception for the American Economic Association at the White House during Hayek’s first trip to the United States. The second one was Herbert Hoover, whom he met long after he had left office. He had met two more presidents in the White House, John F. Kennedy and Reagan, and had found Reagan to be much more thoughtful and actually less of an actor than Kennedy. While Kennedy only pretended to be familiar with his works, Reagan told him straightaway at their meeting (which took place on 17 November 1983) that he had read one book of his, The Road to Serfdom, and that he agreed with him. Hayek added that he felt Reagan was underestimated by many intellectuals. He had a lot of common sense, although Thatcher might sometimes be in better command of details. Reagan made up for it with his excellent advisers.
Hayek remarked with some pride that he was an Honorary Fellow of the Hoover Institution at Stanford, alongside Reagan and Russian writer Aleksandr Solzhenitsyn. He recalled that he had met Solzhenitsyn at the Nobel Prize festivities in Stockholm in December 1974. The Russian author had been awarded the Nobel Prize in Literature in 1970, but he had been unable to receive it until exiled in early 1974. He told Hayek that he could hardly believe that somebody who had not lived in Russia could see the effects of socialism as clearly as Hayek had described them in his Road to Serfdom.
Hayek told us that he firmly believed that socialism was based on an intellectual error—briefly put the overestimation of individual reason combined with the underestimation of collective reason, acting through prices and values—rather than on a disagreement about ends. He had suggested a debate between liberals and socialists to bring this out. Such a debate should take place in Paris where people were genuinely interested in ideas. The difficulty would be to select a plausible socialist team. He could envisage the writer Iris Murdoch as a member of the socialist team, but not the economist John Kenneth Galbraith because he was not really interested in truth. (I should add here that the antipathy was mutual. The same year, in 1985, Stephen Macedo and I had dinner with Galbraith at the Oxford Union before he gave a talk there. I told Galbraith that I was writing a dissertation on Hayek. ‘I attended his seminar at the London School of Economics,’ Galbraith said. ‘He was the most boring person imaginable.’ I was astonished. Almost at a loss for words, I managed to say that Hayek was having great influence on contemporary politicians such as Reagan and Thatcher. ‘That only shows the intellectual sterility of the Right,’ Galbraith retorted.)
At the dinner in the Ritz Hotel, Hayek also mentioned two teachers at the LSE, James Meade and Arthur Lewis (who both had by then received the Nobel Prize in Economics). They were honest scholars in his opinion. Friedman, a skilful debater, should definitely be on the liberal team. During dinner, we spent a long time discussing liberty. Stephen asked Hayek about Pinochet’s dictatorship in Chile. Hayek replied that a distinction had to be made between authoritarianism and totalitarianism. Both were bad, but totalitarianism was much worse. At least authoritarianism was reversible. Sometimes the choice was between two evils, a greater and a lesser one. In Chile, the socialist Salvador Allende had tried to establish a totalitarian system, but this had been prevented by the military coup in 1973. Economic reforms now being implemented in Chile hopefully would lead to political reforms (as in fact they later did, I should mention).
During the discussion, Hayek repeated the point that he had made in his recent books, that liberty required social restraint: it had to be liberty under the law where law included the moral code of a society. ‘Liberty is completely opposite to liberation,’ he said. This was something that for example Keynes had never fully understood, despite his great abilities, he added. Hayek made some critical remarks about ‘liberation theology’, then popular in Latin America. He added that he had met Pope John Paul II some years ago, and that the prelate had been pleased when he, during the meeting, had suggested not to call principles which could not been proved and had to be taken on authority, such as religious dogmas, ‘superstitions’, using instead the term ‘symbolic truths’ about them. After dinner, three musicians who moved between tables and played tunes on request approached us. They asked if we had a favourite song. Stephen replied: ‘Something from Vienna!’ They started playing the famous melody from the 1914 song ‘Vienna, City of Our Dreams’. When Hayek heard the first tones, he beamed and started singing the song in German. This was the last time I saw him.