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Source link: http://archive.mises.org/9657/the-ucla-interviews-with-friedrich-hayek/

The UCLA Interviews with Friedrich Hayek

March 23, 2009 by

The 1978 interviews with Friedrich Hayek conducted by Earlene Craver, Axel Leijonhufvud, Leo Rosten, Jack High, James Buchanan, Robert Bork, Thomas Hazlett, Armen Alchian, and Robert Chitester in 1978 are now available on the internet. The interviews are available in these formats: pdf, text, flip book, and others. There is perhaps no better introduction to the man and the context of his contribution to science than you get in these interviews. I’ve posted a few excepts from the interviews at the “Taking Hayek Seriously” blog, and I’ll post more over the next few days. For a sense of contents, here are some remarks from Hayek on Ludwig von Mises:

[Ludwig Mises] wrote that article [on socialist calculation] and then particularly a book. Die Gemeinwirtschaft: Untersuchungen liber den Sozialismus, which had the decisive influence of curing us [of our infatuation with socialism], although it was a very long struggle. At first we all felt he was frightfully exaggerating and even offensive in tone. You see, he hurt all our deepest feelings, but gradually he won us around, although for a long time I had to — I just learned he was usually right in his conclusions, but I was not completely satisfied with his argument. That, I think, followed me right through my life. I was always influenced by Mises’s answers, but not fully satisfied by his arguments. It became very largely an attempt to improve the argument, which I realized led to correct conclusions. But the question of why it hadn’t persuaded most other people became important to me; so I became anxious to put it in a more effective form.

LEIJONHUFVUD: You have developed your own views on methodology over the years. Did you have a conflict with Mises on methodological matters?

HAYEK: No, no conflict, although I failed in my attempt to make him see my point; but he took it more good-naturedly than in most other instances. [laughter] I believe it was in that same article on economics and knowledge where I make the point that while the analysis of individual planning is in a way an a priori system of logic, the empirical element enters in people learning about what the other people do. And you can’t claim, as Mises does, that the whole theory of the market is an a priori system, because of the empirical factor which comes in that one person learns about what another person does. That was a gentle attempt to persuade Mises to give up the a priori claim, but I failed in persuading him. [laughter]

LEIJONHUFVUD: And you would not share his reliance on introspection?

HAYEK: Well, up to a point, yes, but in a much less intellectual sense. You see, I am neither a utilitarian nor a rationalist in the sense in which Mises was. And his introspection is, of course, essentially a rationalist introspection.

ROSTEN: … if you look back over your own background, your own reading, which five or ten books would you say most influenced your thinking?

HAYEK: There is no doubt about both [Carl] Menger’s Grundsetze and [Ludwig von] Mises’s On Socialism . Menger I at once absorbed; Mises’s was a book with which I struggled for years and years, because I came to the conclusion that his conclusions were almost invariably right, but I wasn’t always satisfied by his arguments. But he had probably as great an influence on me as any person I know.

HIGH: Your name, of course, is closely associated with [Ludwig von] Mises’s. What do you feel were the most important influences he had on you?

HAYEK: That’s, of course, a big order to answer. Because while I owe him a great deal, it was perhaps most important that even though he was very persuasive, I was never quite
convinced by his arguments. Frequently, I find in my own explanations that he was right in the conclusions without his arguments completely satisfying me. In my interests, I’ve been very much guided by him: both the interest in money and industrial fluctuations and the interest in socialism comes very directly from his influence. If I had come to him as a young student, I would probably have just swallowed his views completely. As it was, I came to him already with a degree. I had finished my elementary course; so I pushed him in a slightly more critical fashion. Being for ten years in close contact with a man with whose conclusions on the whole you agree but whose arguments were not always perfectly convincing to you, was a great stimulus .

As I say, in most instances I found he was simply right; but in some instances, particularly the philosophical background — I think I should put it that way — Mises remained to the end a utilitarian rationalist. I came to the conclusion that both utilitarianism as a philosophy and the idea of it — that we were guided mostly by rational calculations — just would not be true.

That [has] led me to my latest development, on the insight that we largely had learned certain practices which were efficient without really understanding why we did it; so that it was wrong to interpret the economic system on the basis of rational action. It was probably much truer that we had learned certain rules of conduct which were traditional in our society. As for why we did, there was a problem of selective evolution rather than rational construction.

ROSTEN: Let me go back to something you just said, which interested me very much, on Ludwig von Mises, when you said you agreed with his conclusions but not with the reasoning by which he came to them. Now, on what basis would you agree with the conclusions if not by his reasoning?

HAYEK: Well, let me put it in a direct answer, I think I can explain. Mises remained to the end a strict rationalist and utilitarian. He would put his argument in the form that man had deliberately chosen intelligent institutions. I am convinced that man has never been intelligent enough for that, but that these institutions have evolved by a process of selection, rather similar to biological selection, and that it was not our reason which helped us to build up a very effective system, but merely trial and error.

So I never could accept the, I would say, almost eighteenth-century rationalism in his argument, nor his utilitarianism. Because in the original form, if you say [David] Hume and [Adam] Smith were utilitarians, they argued that the useful would be successful, not that people designed things because they knew they were useful. It was only [Jeremy] Bentham who really turned it into a rationalist argument, and Mises was in that sense a
successor of Bentham: he was a Benthamite utilitarian, and that utilitarianism I could never quite swallow. I’m now more or less coming to the same conclusions by recognizing that spontaneous growth, which led to the selection of the successful, leads to formations which look as if they had been intelligently designed, but of course they never have been intelligently designed nor been understood by the people who really practice the things.

at the same time [we were] very much aware of the division between not only Meyer and Mises but already [Friedrich von] Wieser and Mises. You see, we were very much aware that there were two traditions — the [Eugen von] Bohm-Bawerk tradition and the Wieser tradition — and Mises was representing the Bohm-Bawerk tradition, and Meyer was representing the Wieser tradition.

[Ludwig Mises] was always a little doctrinaire. I think he was not so susceptible to take offense as he was later. I think he had a period of — Well, he always had been rather bitter. He had been treated very badly all through his life, really, and that hard period when he arrived in New York and was unable to get an appropriate position made him very much more bitter. On the other hand, there was a counter- effect. He became more human when he married. You see, he was a bachelor as long as I knew him in Vienna, and he was in a way harder and even more intolerant of fools than he was later. [laughter] If you look at his autobiography, the contempt of his for most of the German economists was very justified. But I think twenty years later he would have put it in a more conciliatory form. His opinion hadn’t really changed, but he wouldn’t have spoken up as openly as in that particular very bitter moment when he just arrived in America and didn’t know what his future would be.


J Cortez March 23, 2009 at 2:03 pm

Great post. Very interesting.

Ryan March 23, 2009 at 2:52 pm

Thanks for posting this. Very thought provoking and places Mises’ contributions to theory and overall human knowledge in a different perspective.

Inquisitor March 23, 2009 at 2:56 pm

It is a shame Hayek could not have lived to read Long’s work on Mises and Wittgenstein as it might’ve given Hayek a greater appreciation of Mises’s epistemological project, wherein Mises differed greately from many of the 18th century rationalists.

ProudCapitalist March 23, 2009 at 4:13 pm

Very interesting about how Hayek differed with von Mises!

fundamentalist March 23, 2009 at 4:51 pm

Hayek: “That [has] led me to my latest development, on the insight that we largely had learned certain practices which were efficient without really understanding why we did it; so that it was wrong to interpret the economic system on the basis of rational action. It was probably much truer that we had learned certain rules of conduct which were traditional in our society. As for why we did, there was a problem of selective evolution rather than rational construction.”

I have to agree with Hayek on this one. My own study of the history of capitalism has led me to a similar conclusion. The great Scholastic writing on economics was about the morality of it, especially the just price, not the efficiency or wealth creating effect. When the Dutch Republic implemented scholastic writing, it did so for reasons of morality. It took a century before Adam Smith could identify the institutions, especially the free market, as the cause of the Republic’s wealth. Most Dutch writers attributed their wealth to the abundance of manufacturing or to God’s blessings. The Dutch had stumbled onto the greatest system of wealth creation the world has known.

ProudCapitalist March 23, 2009 at 5:07 pm

Inquisitor, I’ve just started to read Long’s work after seeing your reference to it. It’s an easy text to follow, even without much knowledge in philosophy.

MG March 23, 2009 at 5:16 pm

@ Fundamentalist

You seem to be quite knowlegdeable on the subject of capitalism in and the wealth of the Dutch Republic. Could you give me some good sources and books to read on that subject? Being Dutch it is something I am fascinated with as well.

Ed P March 23, 2009 at 5:36 pm

I’ve always thought the differences between Hayek and Mises were interesting although I think Hayek overstates them.

I was just reading the “indirect exchange” chapter in HA where Mises essentially confirms Menger’s spontaneous theory of money and rejects the rationalist constructivist theory. So in this sense he and Hayek certainly agree.

I think where they differ is that Mises says that money as an institution arose as individuals strove to to achieve ends in an indirect way and that further, in doing so, they individually comprehended the fact that in acquring a more marketable good they were nearer to their goal.

Hayek takes it even a step further and says even this is uneccesary. Individuals don’t even need to comprehend that this route is better. Money will still arise since those individuals who happened to do it in the past will tend be most the successful in the future (even if by chance). So you could even conceive of money arising if humans were like imitational automatons.

I agree with Hayek but I think you could say the process can be hastened if individuals comprehend better modes of action, so Mises is right in a sense too.

anon March 23, 2009 at 6:15 pm

Greatly appreciate the transcript – thanks!

fundamentalist March 23, 2009 at 7:54 pm

MG, The theory about capitalism beginning with the Dutch Republic is just mine, but I’m selling it hard! I began research many years ago on the history of capitalism and found many contradicting histories. It appears that no one knows its origins. So I don’t feel embarrassed adding my own theory.

One of my first clues to capitalism’s origins was Smith’s “Wealth of Nations.” Check out how many times he cites the Dutch as his example. Then I ran across several economic historians who claimed that the Dutch created the first government that truely protected property rights for everyone. Sorry, I can’t remember who it was.

But first I had to cut through all of the Marxist crap about capitalism and come up with a sound definition. That’s where Austrian econ comes in very helpful. Also, North’s work on institutions and Geertz work on culture and economics. When I had a good definition of capitalism I went looking for the country that had the first set of institutions like those necessary for capitalism. I got Jonathan Israel’s “The Dutch Republic” and Jan de Vries’ “The First Modern Economy” which is about the Dutch Republic. Also important was Philip S. Gorski’s “The Disciplinary Revolution: Calvinism and the Rise of the State in Early Modern Europe” which has a chapter on the Dutch Republic.

Finally, I had to figure out where the Dutch got their ideas about free markets. That led to the study of the late Scholastics in “Faith and Liberty: The Economic Thought of the Late Scholastics”
by Alejandro A. Chafuen, “New Light on the Prehistory of the Austrian School” by Rothbard, and works by Raymond de Roover. I was convinced that the Dutch got their economic thought from the late Scholastics at the Spanish university at Salamanca, but I couldn’t prove it until the Acton Institute ran a series on the Dutch priest Leonard Lessius in the Fall 2007 issue of their journal “Markets and Morality.” Lessius brought Scholastic economic thought to the Dutch and he was possibly the most influential intellectual in the Republic until Grotius.

Someday I would like to turn the research into a book. Someday. When I get time.

A lot of people like to start capitalism with Venice, and they have very strong points. I wouldn’t argue too much about it; Venice had a lot of influence on the Dutch. But I didn’t choose Venice for several reasons. 1) Venice’s wealth depended upon a monopoly on trade between Northern Europe and the East, not free markets. 2) There was no mass manufacturing like the Dutch developed, or manufacturing for the masses. Manufacturing was still controlled by guilds, heavily regulated by the state, aimed at the wealthy and custom work for the most part. 3) Trade was heavily regulated by the state. Still, Venice comes in a very close second.

Jeremy March 23, 2009 at 9:27 pm

Fundamentalist –

I haven’t read any of the works you’ve cited, but that seems like a strong case for the Dutch being the first real capitalist country.

Don’t forget Jesus Huerta de Soto’s Money, Bank Credit, and Economic Cycles. He shows that the Bank of Amsterdam provided 100% gold backed deposits for about 200 years, and that it was a place of refuge for money across Europe as wars raged in the rest of the continent.

In Venice on the other hand, he shows some major early business cycles caused by the expansion of the money supply.

selena March 23, 2009 at 10:57 pm


are you aware of any resources which either grounds capitalism on a biblical basis, or provides an economic analysis of the old testament ordinances?

Brian March 24, 2009 at 8:32 am

Honestly I don’t see any difference between the two explanations. Isn’t Hayek’s ‘spontaneous order’ subsumed under the Misean concept of rational action? For Mises, as far as I can tell, the concept of rationality is pretty much just a formal idea. Human action is rational purely in the sense that actors have values which cause them to strive for ends using limited/scarce means. This idea of rationality doesn’t seem to make any claims about whether the actor understands the greater implications of their actions.

So money is an emergent phenomenon arising out of the actions over time of the actors in a society. Am I missing something? Where does Mises claim that the actors must understand the institution of money in order for it to evolve?

raoul March 24, 2009 at 9:42 am

(Law, Legislation and Liberty) FA Hayek Épilogue, note 44 :
Long before Calvin, the Italian and Dutch commercial towns had practised and later the Spanish Schoolmen codified the rules which made the modern market economy possible. See in this connection particularly H. M. Robertson, Aspects of the Rise of Economic Individualism (Cambridge, 1933), a book which, if it had not appeared at a time when it practically remained unknown in Germany, should have disposed once and for all of the Weberian myth of the Protestant source of capitalist ethics. He shows that if any religious influences were at work, it was much more the Jesuits than the Calvinists who assisted the rise of the ‘capitalist spirit’.

Current March 24, 2009 at 11:50 am

Brian, Ed P,

I think you’re right about money. Mises and Hayek are closer than they thought themselves.

On other issues though Hayek is quite different. For example, to Hayek it is not the nature of action that makes socialism impossible, but the dispersed nature of knowledge. On this subject I agree with Hayek.

Menckenite March 24, 2009 at 1:56 pm


Forgive my ignorance but I would think that “the dispersed nature of knowledge” can only be known by action. I fail to see how Mises and Hayek differ on this issue. In my opinion, they just seem to be looking down on the same valley from two different mountains.

Dick Fox March 24, 2009 at 3:42 pm

I got a chuckle as I read Hayek’s comments concerning Mises. Mises arguments actually made more sense to me than Hayek’s comments. Mises arguments seem much tighter than Hayek. Hayek seems to always leave an “on the other hand.”

I guess it comes down to each his own. I love Hayek’s work but it doesn’t measure up to Mises.

MG March 25, 2009 at 3:29 am

@ fundamentalist

Fascinating stuff! If you are going to write that book and you need a researcher ‘on the ground’ then I would be proud to help. This would fit in well with my study of Economic history.

kind regards,


fundamentalist March 25, 2009 at 10:08 am

Selena: “are you aware of any resources which either grounds capitalism on a biblical basis, or provides an economic analysis of the old testament ordinances?”

Gary North wrote quite a bit about it a few years ago. I think he has some links to his material on his web site.Also, the Acton Institute has some good material at acton.org. The Church has always grounded the right to property and the sanctity of property in the Biblical attitude toward property. Much of the OT law was property law. It was summarized in the commandments to not steal and to not covet, or to put those commands positively, to respect the property of others.

Building on the principle of property, the primary goal of the Scholastics was to determine the market conditions that result in a just exchange of goods, or the just price. Eventually, they determined that the just price is the one set in a free market. They allowed for state intervention in extraordinary times, but required that the state try to determine what the free market price should be. Of course, free markets are just the implementation of property rights.

Raoul, Thanks for the info on Hayek’s “Law, Legislation and Liberty.” It looks like a good resource.

Haeyk: “…should have disposed once and for all of the Weberian myth of the Protestant source of capitalist ethics.”

The Dutch Protestants should get some credit for implementing Scholastic economics when Catholic countries refused, but it’s true the thinking came from Catholic scholars. Weber actually credited Calvinism, which is a subset of Protestantism. In the Dutch Republic and in Calvin’s Geneva, Calvinists opposed free markets and demand church control of the economy through the state. Fortunately for the Dutch the political leaders didn’t listen. They were what Israel calls Erasmian Protestants and were much to individualistic to submit to control by the church. It was the Erasmian Protestants who implemented capitalism and the Calvinists who opposed it. In addition, capitalism requires specific institutions for it to work, including the rule of law, honest police and courts, equality before the law, etc. The Dutch made radical changes in these institutions and without the reform of old institutions and creation of new ones free markets would not have worked and would have been taken over by the nobility and cartels.

MG, Thanks for the offer! Right now my plans are pretty vague because of family commitments. Years ago I ran across a work by Etienne Laspeyres in which he catalogued the pamphlets on business and economics written during the golden age of the Dutch Republic. I believe it was written in Dutch and I couldn’t find an English translation. Several people claim he knew more about the Dutch attitude toward economics than anyone. Do you know of any English translation?

MG March 25, 2009 at 10:36 am

I’ve found that work but it is indeed written in German: ‘Geschichte der Volkswirthschaftlichen Anschauungen der Niederl¨ander und ihrer
Litteratur zur Zeit der Republik.’ I haven’t been able to find an English version as of yet. I’d have to check the royal library here or the History department of my University.

I have found a review of it which offers a bit of a context of the article and some complementary Dutch sources whicht might be of help. (the article question can be disregarded) Section 2 is of interest:


fundamentalist March 25, 2009 at 11:44 am

MG, The site requires a username and password. Could you attach the article to an email and send it to rdmckinney@cox.net?

Michael A. Clem March 25, 2009 at 1:52 pm

Economics is where subjective desires and objective reality (scarce resources) meet face to face and hash things out. Rationality in the Misesian sense seems to merely mean that one takes steps to achieve some desired goal or end, but seems to say little about the rationality of the means used to achieve those ends. And yet, a careful analysis of marginal value and capital formation (among others) show that some means are indeed more effective than others at achieving those goals. While it may be true that a certain amount of trial and error is used in discovering more effective means, it still takes a certain amount of conscious rationality to recognize that one means is more effective than another, even if looking at it from hindsight.
Thus, we might say that Hayek was more focused on the practical or pragmatic reality of the economy, while Mises was more focused on the principles behind that reality. Both are necessary, and they necessarily complement each other. The correct principles leads to the most pragmatically correct results. Understanding the most pragmatic results leads to understanding the correct principles.

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