Persuade and Be Free.

• Author: McCloskey, Deirdre
• Position: Economist Friedrich Hayek

A new road to Friedrich Hayek

The libertarian age is at hand," declares Alan Eben-stein at the end of his engaging new biography. So we most fervently pray, though the very sainted Friedrich August von Hayek (1899-1992), one of the people who brought it about, would I think be less than confident. Hayek lived through a startling disintegration of liberal societies. He saw socialism triumphant and freedom limited to a handful of nations. By the early 1940s even his fellow Austrian, Harvard economist Joseph Schumpeter, had abandoned capitalism, as had most other intellectuals.

By 1944, when Hayek wrote his most famous if not his most profound book, The Road to Serfdom, most of his academic colleagues were lining up behind state slavery. George Orwell praised the book in part; it elaborated on the same worries Orwell had about central planning: "It cannot be said too often-at any rate it is not being said nearly often enough-that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitor never dreamed of." When Hayek tried to have The Road to Serfdom published in the United States, it was rejected by three publishers. Orwell's Animal Farm, a rather more vivid approach to the same theme, was in that same heyday of collectivist enthusiasm rejected by eight or nine American publishers, one of whom explained kindly that, "We are not doing animal books this year.

But Hayek gloriously lived to receive the 1974 Nobel Memorial Prize in Economic Science and to witness socialism's collapse. The century's chief political theorist of capitalism became a hero in the former socialist countries. In 1989 the Cato Institute gave Yevgeny Primakov a bronze bust of the author of The Road to Serfdom. The ironies are dizzying.

Hayek had an interesting life, sometimes in the sense of the Chinese curse: May you live in interesting times. He was a child in the Vienna of Freud, a cousin of Wittgenstein, a decorated officer in the horrors of the Italian front in World War I, a witness to hyperinflation and the rise of Nazism, an early proponent of the new quantitative methods in social science, an academic star at the London School of Economics, a media figure briefly in the United States after Reader's Digest published a condensed edition of The Road to Serfdom in its March 1945 issue, and then a pariah in mainstream economics, viewed as merely polemical, no longer an economist.

When he was considered for a job in economics at the University of Chicago in 1946, and then again in 1950 when he was in fact invited to join the university's quirky Committee on Social Thought, the economics department one floor down wouldn't give him an appointment. It was not because he was an anti-socialist-the Chicago School was just forming then, under the agricultural economist Theodore Schultz, and was realizing that it was an anti-socialist outpost-it was because he was thinking beyond economics and econometrics. (Departments of economics haven't changed since 1950.) In the 1950s, he worked on political philosophy at Chicago, then returned to the German-speaking world, and especially his well-named hometown Freiburg, for the final third of his career.

That career can be summed up as a stellar rise to 1944 and a shocking fall, which was followed by a long period of relative and then depressing obscurity, out of which emerged the grand old man of what the Europeans call neoliberalism. Hayek confessed in an interview, "I had a period of twenty years in which I bitterly regretted having once mentioned to my [first] wife after [John Maynard] Keynes' death [in 1946 that] I was probably the best known economist living. But ten days later it was probably no longer true." What happened? Keynes' stock rose after his death, just as the academics were getting cross about the popular success of The Road...