Friedrich August von Hayek (1899-1992) was an Austrian-Hungarian economist, philosopher and Professor from 1931 to 1950 at the London School of Economics and from 1950 to 1962 at the University of Chicago. He won the Noble Prize in Economic Sciences jointly with Gunnar Myrdal in the year 1974 for their pioneer work regarding theory of money and economic fluctuations, and for their research on the interdependence of economic, social and institutional phenomena.
Hayek was disciple of Joseph Schumpeter, Ludwig von Mises, Gottfried Haberler and Fritz Machlup and became a follower of the ideas of the Austrian school. For many, he has been regarded as the father of modern liberalism. His ideas inspired the School of Chicago’s neoliberal monetarism.
Hayek has been one of the greatest critics of the planned and socialist economy, as he considers it inevitably leads to totalitarianism and to the absence of individual freedom. He reflects this issue in his “The Road to Serfdom”, 1944. He believes the economy has its own way of working and describes the cycles of the economy, in what is seen as his greatest contribution to economics, in his work “Pure Theory of Capital”, 1941.
He perceived the economy as a coordination problem, and all maladjustment in the economy are due to the improper coordination between agents, however this disorders would serve to achieve a correct and efficient coordination between them. Any economic policy that attempts to correct the economy would, nevertheless, create an artificial patch that would in the long term aggravate the situation.